Author: Casino Connection Staff

Louis DeNaples, the Pennsylvania businessman who founded the Mount Airy Casino Resort, has lost his court appeal to return to the state’s gaming industry in an ancillary role.

DeNaples divested his interest in the Mount Airy casino in 2009, in a deal with the local district attorney after being indicted for perjury. That case had alleged that the businessman had lied on his application and in testimony that he had any ties to associates involved in organized crime, citing an ongoing association with Scranton mob boss Russel Bufalino.

Armed with an affidavit from Bufalino himself that appeared to countermand DeNaples’ assertions, then-District Attorney Ed Marsico agreed to drop all charges in exchange for DeNaples’ divesting his interest in Mount Airy and agreeing not to do business with the casino, which is in Pennsylvania’s Pocono Mountains. DeNaples divested his interest to a trust fund controlled by his children.

The businessman had recently appealed to the Pennsylvania Gaming Control Board, alleging that the settlement should not prevent firms in which he has an investment stake from supplying goods and services to the casino. He cited his stock ownership in companies such as Coca-Cola and Apple, saying it would be ludicrous to bar those companies from selling to the casino because of his settlement.

The board rejected his request, and DeNaples appealed the decision to the Pennsylvania Commonwealth Court. Last week, the court upheld the gaming board’s decision. Writing for the three-member panel, Judge Robert Simpson ruled that the restrictions imposed on DeNaples can only be lifted if DeNaples provides proof that the statements he made during the 2006 background investigation were not false, writing that the restrictions are “consistent with the board’s interest in safeguarding the integrity of the Pennsylvania gaming industry by prohibiting DeNaples’ participation at any level.

“Although DeNaples avoided criminal prosecution for perjury, he did so by agreeing to relinquish any ownership or control in Mount Airy.”

After closing its casino and restaurants earlier this month, Las Vegas’ troubled Lucky Dragon gaming resort is facing a for MGM Springfield Puts Out Hiring Callced sale next month to satisfy an unpaid $90 million loan.

The Chinese-themed property, the first ground-up casino hotel built in Las Vegas since the recession, is slated for foreclosure auction on February 6 after being slapped months ago with a default notice on the loan.

The loan was taken out by the resort’s developer, Andrew Fonfa, in the spring of 2016 and, according to news reports, was not mentioned in a press release sent out at the time and which described the boutique casino and hotel as “fully financed”.

Some $60 million of that financing came from investors looking to exploit the federal EB-5 visa program, which promises U.S. residency in exchange for a commitment of $500,000 or more in a U.S. business venture creating at least 10 full-time jobs.

It’s not known if the EB-5 funding is connected to the Fonfa loan, which was provided by an entity called Snow Covered Capital with links to San Francisco real estate investor Enrique Landa.

News reports citing the auction notice said $48.9 million is owed on the Fonfa loan.

The auction doesn’t necessarily spell the demise of Lucky Dragon, however; although the property has struggled to establish a clientele in the year since its opening and has been curtailing operations for months and shedding staff. The casino and the food and beverage operations that survived the earlier cuts were shuttered on January 4. The nine-story hotel is still operating.

Moody’s Investors Service warns that the largest of New York’s three new commercial casinos is not generating enough revenue to cover its debt.

del Lago Resort and Casino, located near Syracuse in the state’s popular Finger Lakes tourist region, saw its bond rating lowered in a new report from the debt rating agency.

The $440 million property, which opened last February, is on track to fall shy by $100 million or more of its first first-year revenue forecast of $263 million.

“Moody’s is of the view that without a substantial improvement in revenue, del Lago will not be able to achieve a level of performance that can support its existing debt capital structure,” said Keith Foley, a senior vice president with the agency.

del Lago’s troubles are not unique. Since the debut of full-scale commercial gaming in New York in December 2016, the three operating properties―including Tioga Downs in Nichols near the Pennsylvania border and Rivers Casino & Resort in Schenectady―are missing initial revenue projections by more than $200 million combined, prompting many observers to suggest the state’s gaming market is overbuilt.

Besides the commercial casinos, New York is home to seven tribally owned casinos and eight racinos and machine gaming venues, and there will be more in the next several weeks with the February 8 opening of an even larger and more elaborate facility―Resorts World Catskills―the closest of the four commercial casinos to New York City―and a third casino by the Oneida Indian Nation, slated to open in del Lago’s Syracuse market on March 1.

The Moody’s report noted, “There are five gambling facilities, including four racinos and one Native American full-scale casino within 100 miles of del Lago’s location.”

The situation has raised concerns in Albany, where state Assemblyman Gary Pretlow, who chairs the chamber’s Racing and Gaming Committee, has called on the administration of Gov. Andrew Cuomo to launch an investigation into the realities of the statewide market.

“It is critically important that we have reliable and realistic long-term revenue projections,” Pretlow said, “so we can prevent the recent gaming expansion from creating an arms race for more and more tax subsidies.”

del Lago, owned by Rochester mall magnate Thomas Wilmot, has defended its performance, saying it takes time to build a customer base and pointing to the jobs and economic development it has created in the region.

“From many aspects, del Lago Resort & Casino has been a wonderful success story,” General Manager Jeff Babinski stated last fall.

The sponsor of a bill in Congress that would exempt Indian casinos and other businesses from U.S. labor laws got substantial donations from Indian gaming interests beginning in 2015, after he sponsored the bill. The House passed the bill last week but its fate in the Senate is unknown.

The bill was previously approved—while dying in the Senate. This time it was included as part of a larger bill that was approved 239-173.

Rep. Todd Rokita of Indiana is the Republican congressman under the microscope after the Associated Press reported that he took more than $163,000 in donations from tribes with casinos—after he sponsored H.R.986, the Tribal Labor Sovereignty Act. That makes him the top recipient of tribal gaming money now serving in the House. He is also a candidate for a higher job, U.S. Senator from Indiana. He also doesn’t have any Indian casinos, or recognized tribes in his district. At the same time, he broke no laws by accepting the donations.

Rokita had gotten donations from Indian gaming interests before 2015, but the donations spiked in that year. According to Federal Election Commission data he received the largest amount from Indian casinos of any member of the House.

Responding to criticism of Rokita, his chief of staff Mark Cruz told the AP: “Native Americans in Indiana and elsewhere, support Todd because they know he fights for them including taking on union bosses hell-bent on exploiting poor Native American workers who historically haven’t had a voice before Congress.” Cruz is a member of the Klamath Tribes.

Labor laws were never applied to Indian businesses until 2004, when the National Labor Relations Board ruled that Indian businesses were subject to the law because they employ non-Indians and have mostly non-Indian patrons. This led to unions forming on many Indian reservation businesses—such as casinos. This is opposed by most tribes because they are sovereign nations under federal law.

Jefferson Keel, lieutenant governor of the Chickasaw Nation, when he testified before a congressional committee declared that the idea of tribes being subordinate to the National Labor Relations Act, “is incompatible with the very nature of sovereignty and self-government.” The Chickasaw Nation has donated $15,600 to Rokita since 2015.

Since the 2004 ruling by the NLRB this has been an issue with tribes, who have tried to get the law changed to exempt them. This has become a Republican vs. Democrat issue because, although Democrats normally back tribes, they also traditionally back unions. So, they mostly oppose the bill, which is opposed by labor.

Rokita is undergoing some criticism from those who say that he paints himself as a Washington outsider who supports President Trump in his goal of “draining the swamp,” in the nation’s capital—while accepting money from the swamp. He also considers himself a foe of lobbyists and special interests.

In a recent Rokita TV campaign ad the narrator says, “Lobbyists, bureaucrats, politicians and the media. They’ve rigged the system. They look out for themselves and look down on us.”

If Rokita is successfully painted with a taint of hypocrisy, it could complicate his primary battle for the Republican nomination to go after incumbent Democratic Senator Joe Donnelly. Rokita is fighting two other formidable contenders for the nomination, another fellow House member and a rich businessman. The primary election is May 8.

James McCann, a political science professor at Purdue University, told the AP that Rokita risks alienating a key constituency. “People who are maybe having to work two jobs, or are lower on the economic totem pole, tend to see everyday politics as more corrupt,” said McCann. “If Todd Rokita is seeking to differentiate himself based on sticking up for the little guy, or draining the swamp, that undercuts his messaging.”

The National Football League Raiders will commence their 2020 season as Las Vegas’ home team with a 30-year moratorium on any direct taxation by the state of Nevada.

Notwithstanding the fact that most of the funding for the team’s new 65,000-seat home is coming from a planned $750 million public bond issue, the Raiders have secured a tentative agreement from the state that permits the team to break its stadium lease and move away if Nevada attempts to impose any “targeted tax” aimed at generating revenue from the team, its $1.9 billion domed stadium, its fans or players and visiting teams and fans.

The agreement would not immunize the team or its fans from new taxes applied statewide on businesses or individuals generally and is separate from a broad stadium development agreement expected to be finalized next month and a master lease that still needs the approval of NFL owners and the Las Vegas Stadium Authority, the public agency that will own the venue.

Pending those approvals the authority plans to go to the public bond markets in April to raise the $750 million. The bonds will be backed by an increase in the Clark County hotel room tax.

Construction is under way on the stadium, located on 62 acres west of Interstate 15 at the southern end of the Las Vegas Strip.

As part of the state legislation authorizing the public financing the Raiders will share the venue with the University of Nevada, Las Vegas. The university’s board of regents was slated to vote last Friday on their joint-use deal with team.

Meeting planners, brands, and prospective visitors can now experience everything Atlantic City’s convention scene has to offer from the comfort of their chairs, thanks to a new virtual reality (VR) experience created through Meet AC’s partnership with YouVisit.
 
The YouVisit experience will ultimately assist the Meet AC sales team to meet their yearly room night goals, while focusing on bookings at the Atlantic City Convention Center, newly opened properties and re-branded products. The YouVisit experience will offer meeting planners a clearer, more immersive view of Atlantic City as they virtually experience the Convention Center and surrounding destinations using this engaging and effective technology.
 
“We are thrilled to partner with YouVisit and make full use of their advanced virtual reality technology. Meeting planners will have the opportunity to not only virtually experience the Atlantic City Convention Center from any device, but will also be able to experience Atlantic City’s iconic sites throughout the experience,” said Jim Wood, president and CEO of Meet AC. “Meeting planners have evolved a new outlook when it comes to site selection, and this platform of virtual interaction will make their decision easier.”
 
YouVisit creates virtual experiences for businesses and institutions around the world that can be viewed from multiple platforms, including leading virtual reality headsets, mobile devices, and web browsers. YouVisit’s virtual experiences are designed to replicate and enhance real-life experiences through rich media, including professional photos, videos, 360-degree panoramas and much more.
 
“With a picturesque seaside location and an award-winning convention center, Atlantic City is one of the premiere meeting and events destinations in the world. It was a true pleasure for our team to bring all the sights and sounds to life in live 360° and VR,” said Gordon Meyer, director of marketing of YouVisit. “Event planners’ choice of Atlantic City will be made even easier now that they can explore it for themselves in 360° without ever having to leave the office.”
 
In addition, another component of Meet AC’s interactive floorplans is an App that can be found in the Apple iTunes Store or Google Play Store titled Meet AC. The viewer will experience a custom virtual reality app of our interactive experience at the Atlantic City Convention Center, Boardwalk Hall and surrounding area.
 
View the “Meet Atlantic City Experience” at: www.youvisit.com/tour/meetac. For more information regarding Meet AC, please visit, www.meetac.com.