Casino news source: Courier Journal - http://www.courier-journal.com/
Indiana casinos investing in future
Industry prepares for new competition
By Lesley Stedman Weidenbener
lstedman@courier-journal.com
The Courier-Journal
More than a decade after the first casinos opened in Indiana, the state's gambling industry is expanding its markets and preparing for possible competition from other states, including Kentucky.
Four of the five casinos along the Ohio River and two of the five on Lake Michigan have invested or are planning to spend a total of $1.2 billion on upgrades, expansions or new boats.
Two other Northern Indiana boats -- both Majestic Star casinos in Gary -- also are exploring options for expansion.
And that total doesn't include the $385 million spent on the state's newest casino in French Lick, 55 miles northwest of Louisville.
"It's always better to have the newer, fancier product in town," said Robert A. LaFleur, gaming, lodging and leisure industry analyst for Susquehanna International Group, a Pennsylvania-based investment firm. "And there's a ton of capital to invest in casinos. Gaming is a very profitable industry."
Casinos don't generally get tax credits or state incentive packages for their investments, so their role in economic development often goes relatively unnoticed, said Mike Smith, executive director of the Casino Association of Indiana.
But the projects create jobs and likely will mean higher tax revenues for the state, he said.
Every dollar invested in property upgrades, like the new hotel tower at Belterra Casino (on the Ohio River in Switzerland County) equates to additional revenue to the state of Indiana in gaming taxes, Smith said.
Officials in Ohio and Kentucky have long discussed adding slot machines at their racetracks to help the horse industry and capture wagering tax dollars now spent by their residents in Indiana. But Ohio residents in November defeated a referendum that would have allowed slots, and Kentucky continues to wrestle with the issue.
According to the Kentucky Equine Education Project, a coalition of horse racing interests, Kentuckians spend $600 million annually at Indiana casinos.
Ernest Yelton, executive director of the Indiana Gaming Commission, said a predictable regulatory environment and stable tax structure has encouraged casino companies to expand in the state.
That's a key reason that Harrah's Entertainment decided to replace its casino in Hammond with a new $485 million boat and launch a major renovation at Caesars Indiana in Harrison County, said Anthony Sanfilippo, president of the company's central division.
At Caesars, workers are busy giving the 8-year-old vessel a $50 million makeover so Harrah's can re-brand it under its Horseshoe name. Construction started last month on the fourth deck, where the casino is adding high-limit table-game and slot-machine areas. It will then continue the renovation down through other floors, adding a stage bar on the second floor for live shows.
The work is necessary not just for the re-branding but is also about keeping up with the competition, general manager Ed Garruto said.
"When other competitors on the Ohio River invest in new capital, it really becomes more urgent for us to do the same so we have a competitive facility," he said.
Upriver near Cincinnati, the Argosy Casino at Lawrenceburg is building a vessel to replace its 10-year-old riverboat. The $310 million project, which includes a new parking garage, will nearly double the size of the casino, said Eric Schippers, vice president of public affairs for the parent company, Penn National Gaming Inc.
The goal, Schippers said, is to create a casino that feels more like a Las Vegas experience, with more gambling on one floor and better amenities. Also, Argosy was in desperate need of parking.
"You always look ahead, keeping one eye toward the future and another on competition," Schippers said. "Argosy Lawrenceburg is already the most popular riverboat casino in the country … but we think the new vessel will make it one of the premier destinations in the country."
Sonnie Burden of Central City, Ky., has visited most of Southern Indiana's casinos -- including Argosy and Caesars -- as well as those in other states. He said he's not surprised by all the projects.
The casinos "have got to be nice" to attract customers, he said.
But Burden, who sticks to playing slot machines, said he wishes casino companies would spend less on fancy improvements and improve his odds of winning instead.
"Nowadays we're lucky if we can get ahead" on a casino trip, Burden said. Caesars "already has a nice hotel, excellent restaurants. To me, it would be better if they opened up the odds a little bit on the machines than spending millions on improvements."
Some Indiana casino officials say they want to be prepared should competition from Kentucky or Ohio ever come.
Belterra -- which sits on the Ohio River between Caesars and Argosy -- draws most of its customers from Louisville, Cincinnati and Lexington. Like other river casinos, it could be vulnerable to expansions in neighboring states.
That's why the casino is working to grow its customer base and create the kind of experience that could help it survive future competition, general manager Kevin Kauffman said.
This spring the casino will break ground on another expansion of its hotel, adding a tower with 250 premium rooms that will make the hotel the biggest in Indiana. The expansion will target top-end customers with a Las Vegas-style spa, Kauffman said.
"You're always trying to reinvent yourself, to make your property stand out from the crowd," he said.
Expansions continue on Lake Michigan as well. Blue Chip Casino in Michigan City has announced a $130 million hotel expansion after opening a $170 million vessel last year that offers customers gambling on one level.
"We wanted to upgrade the experience, and a big piece of that is putting all our gaming on one deck," said Rob Stillwell, vice president of corporate communications for owner Boyd Gaming Corp. "Customers prefer that because it creates a much more open environment."
Columbia Entertainment, which is buying Casino Aztar in Evansville, is finishing an adjacent $40 million entertainment district and boutique hotel. Company officials told the gaming commission recently they'll consider replacing the boat, the oldest in Indiana. |
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