Inside Asian Gaming

September 2008 | INSIDE ASIAN GAMING 45 Briefs but none in Las Vegas. The condominium project with LVS will be the company’s first residential project that is not mixed-use; hotel rooms are not part of the project. LVS Chairman Sheldon Adelson said in a statement that he didn’t believe the company will have any trouble selling the condominium units. He said having the St. Regis brand with access to The Venetian and Palazzo makes a compelling sales opportunity. “Those fortunate enough to purchase at The St. Regis Residences will have the rare opportunity to own a residence that is part of two world-class resorts in the heart of one of the most famous streets in the world,” Adelson said. Atlantic City Casinos Reach Deal with Tracks According to the Press of Atlantic City , even though recently opened slot parlors in Pennsylvania, New York and Delaware have been chipping away at the business of Atlantic City’s casinos, they now no longer have to worry about losing their customers to New Jersey racetracks as well. After more than a year of negotiations, the casinos have finally wrapped up an agreement with the horseracing industry to block slot machine-like video lottery terminals at the tracks. The agreement, signed August 13 without fanfare and with no public announcement, requires the casinos to pay the tracks US$90 million over the next three years in exchange for a moratorium on video lottery terminals (VLTs). Casinos vigorously opposed VLTs as debate raged in the state Legislature on whether to place thousands of the machines at the Meadowlands track in northern New Jersey. The issue died down when Gov. Jon S. Corzine signed legislation in April to keep VLTs out of New Jersey for the next three years, while requiring the casinos to bail out the financially ailing tracks. Even though Corzine signed the no-VLT legislation into law months ago, the final details for the subsidy agreement had to be worked out between the Governor’s Office, the Casino Association and the New Jersey Sports and Exposition Authority, the state agency representing the horseracing industry. The new agreement calls for the governor to form a committee to study the long-term financial viability of the tracks, a sign that the casinos want to see some other funding source in place of their subsidies after 2011. Cosmo Project to Proceed After months of speculation, the pieces are starting to fall into place for the financially troubled Cosmopolitan project on the Las Vegas Strip Strip. According to the Las Vegas Gaming Wire , New York-based Related Cos. has been hired by Wall Street investment house Deutsche Bank to finish development of the 2,998 unit hotel- condominium project. The project’s original developer, New York-based Bruce Eichner, ran into financial trouble this year, and was unable to proceed as increased construction costs drove the Cosmopolitan’s construction budget from its original $2 billion price in early 2006 to its current $3.9 billion price. Banks in January insisted Eichner put more equity into the project before they would provide new funding. John Knott, executive vice president of the Global Gaming Group for CB Richard Ellis, said Deutsche Bank’s decision to bring in a new company with major development experience to complete the project was a good sign. “The good news from a market perspective is that the project goes forward as opposed to sitting there idle and leaving a big question mark on the Strip,” he said.“So it’s got some direction.” Deutsche Bank did not say if the project’s opening will be pushed back from its current late 2009 date. The bank has taken over full ownership of the project under an affiliate, Nevada Property I,and will continue to coordinate design and construction of the project. Gustav Has Limited Impact on Gulf Coast Casinos Unlike hurricanes Katrina and Rita, Hurricane Gustav caused more disruption than destruction to the Gulf Coast casino industry, according to the Las Vegas Gaming Wire . The storm made landfall on Labor Day and brought about minimal damage to casinos in New Orleans, Lake Charles, La., and the Mississippi gaming communities of Bay St. Louis, Gulfport and Biloxi. Most casino operators only had to close their doors for a few days. Mississippi Gaming Commission executive director Larry Gregory told the Associated Press that many of the Gulf Coast casinos took in water on their ground floors but there was no structural damage. The damage done by Gustav was vastly different from 2005, when hurricanes Katrina and Rita roared across the Gulf Coast about a month apart and inflicted billions of dollars in damages. More than a dozen casinos were closed after the storms, with some of the gambling halls knocked out of commission for more than a year. Gaming companies lost revenues and spent millions to rebuild their hotels and casinos. The states lost tax revenues associated with the casinos. Beau Rivage, Mississippi’s largest casino, was closed for a year following Katrina. Others, such as Pinnacle’s Casino Magic in Biloxi, never reopened. The casino site was eventually sold to Harrah’s Entertainment. The Beau Rivage