Special Message From Jennifer Goodwin

This last blogger entry of this year will seem strange and out of character for those of you who read my ramblings every week. That's because this coming Sunday December 27 is a very, very special day for me, and I want to share my happiness with all of you who visit my site.  No talk about slots or other forms of gambling this week, no reminders about taxes and how to stay out of trouble with the IRS, no YouTube videos to watch.

This week Jennifer confesses that she may be just a bit older than most of you think, and that she is celebrating her 50th Golden Wedding Anniversary with her husband and family in Las Vegas this coming holiday weekend. We'll renew our vows, feast with family and friends, and finish with The Beatles LOVE by Cirque du Soleil. No comped rooms at Caesar's Resorts this visit! Our kids have reserved a suite at the Cosmopolitan. But, with luck, we may manage to work a little gaming time into our itinerary.

The photo is from our wedding ceremony 50 years ago. We may have changed just a bit in that time. I'm not posting our current pictures, because I want to pretend we still look like we did back then half a century ago. I wish you all could share in our remembrance celebration, and I hope you all will find someone to love and share your hopes and dreams with as long as I have. There are few joys in life to match being married to your best friend for 50 golden years.

Pala and Pechanga Expanding -- Again

I guess it’s a sign I’m getting older…or maybe just a sign I’m getting old. But when my husband and I make our weekly visit to our local Native American casinos, which are almost all now housed in large, elaborate resorts, I find myself missing the good old days when we first moved to Southern California.   The days of small, friendly casinos housed in tents, with non-wagerling games and give-aways to lure us in, and hot seat give-aways every day to keep us there. And every few months, something really big like a car or cash that you felt like you actually had a chance to win. 

Bigger is not always better. But the people who manage our local casinos don’t seem to understand that. Our Los Angeles and San Diego newspapers reported this week that Pechanga and Pala are expanding again. Why do they need to do this — and who is going to pay for this I wonder.

Even if you don’t live in Southern California, you’ve probably heard of Pechanga. Pechanga is the casino that was ranked number one in casino/resorts by US Today this year. Pechanga, is the casino whose lands 500 Nations claims are larger than the properties of any of the Las Vegas behemoths, Pechanga is the casino whose reservation lands are not located far away on some lonely deserted mountain road but are at the edge of Temecula/ Murrieta, towns of over 200,000 residents who can even take a RTA bus to the door. Pechanga is the casino that is already part of a popular tourist destination, Temecula, a city of that attracts visitors to Old Town and Wine Country each year.  Why does Pechanga need to expand? 

Tribal Chairman Mark Macarro says they want to meet the needs of people who want recreation, not just gambling. He says the demand for hotel rooms at the resort has been surging and they recently celebrated 365 straight days of 100 percent occupancy. The expansion project, which is expected to be completed near the end of 2017, will include a 568-room hotel wing, a two story spa and salon, a fitness center, two restaurants, and 67,000 square feet of indoor and outdoor event space. And what will this cost us? An estimated $285 million. 

When one resort expands, the others have to follow suit to remain competitive. So another popular casino on State Rd 76, just off Highway 15, handy for gamblers from Riverside and Northern San Diego counties and cities along the corridor from Escondido to Oceanside, Pala, has an expansion plan of its own for this winter.

The casino recently announced that construction is underway on a new 10-acre recreational vehicle resort. They expect the project to be completed in May 2016. The $5.6 million project will even have 24 hour shuttle service to the casino floor and its restaurants for campers’ convenience. Configured with 100 full-service (electric, water, and sewer hookups) site, plans are to accommodate RVs with trailers ranging from 55 to 70 feet. Six luxury spots and 17 premium pull-through spots will be included.

Amenities will include the resort clubhouse, complete with heated swimming pool and two spas, a laundromat, and flat screen televisions. Free wi-fi and and cable TV will be available. A separate building will house the showers and restrooms. A fenced dog park is included.

Pala’s CEO Bill Bembenek was quoted as saying the RV market is growing. The average age of an RV owner is 49 and he has above average household income. One in twelve households that owns a vehicle owns an RV. More importantly, though he doesn’t address this, their chief competitor Pechanga already has 168 spaces in its RV facility. It seems the real purpose of the RV facility is to expand its customer base and compete with the neighboring casinos. Currently Pauma, Harrah’s Resort Southern Califormia, and Valley View do not have RV facilities. How much do you want to bet that they will be following suit in the next few years.

Bottom line: The casinos will derive some income from renting these RV sites and hotel rooms - but how many years do you think it will take to recoup Pala’s $5.6 million and Pechanga’s $285 million expansion expense? Tribal income from gaming is down. Gamblers already feel the machines have been tightened and are not paying like they used to. These new visitors staying at the new hotel and new RV site will contribute to restaurant revenues and hotel and RV fees, and they will play some money through the machines. Will it be enough cover almost $300 million in expenses?  What do you think? 

Marketing Slots to Millennials

It's time to talk again about skill-based slots and gambling and what the manufacturers and programmers hope will resonate with the younger players who find luck-oriented games boring. 

I picked up a magazine called Gambling Insider at G2E this fall that reported that Las Vegas welcomed 41 million visitors in 2014, although just 12% came to gamble. In fact, only 4% of first-time visitors came to gamble. The younger crowd comes to Vegas for the pool parties, restaurants, and nightclubs, not for the slots and table games. The big question at G2E this fall was, how can the casinos attract these younger players with games that appeal to the Candy Crush Crowd.

Eric Meyerhofer of Gamblit Gaming of Glendale, CA, is trying to do just that. You may have heard him speak at G2E. If not, Random $$ Slots has a channel of films from the Gaming Expo you can watch on YouTube. Eric Meyerhofer’s goal is twofold. He wants to bring real money wagering to mobile gaming. He also wants to put the company’s touch-controlled surface tables into casino bars and nightclubs offering social gambling games for gamers and their friends. “Gambling should be about entertainment,” he says, and the idea is to bring a product to players that they already know and understand as entertainment rather than expect them to shift their taste to a more passive experience. Skill gaming and Social gaming — that’s where we’re headed. 

One Gamblit game that attracted a lot of attention at G2E was the company’s Grab Poker game. HERE is a video of an interview with a representative of the company explaining the game which basically involves swiping a table-top screen to grab the best set of cards first.  The company expects the game to be a road-ready reality next year after final regulations are passed by the state and the games are tested.

For the big brands like Scientific Games, skill-based gaming mostly meant adding bonus rounds to their traditional slots, such as actually playing SPACE INVADERS.

For the SIMPSONS, it meant  physically scratching a lottery ticket or catching donut sprinkles during a virtual trip to the Kwik-E-Mart.

I’m sure all of you who attended G2E made a trip to Konami’s booth to see the historic favorite FROGGER.

IGT’s CENTIPEDE has been in the casinos for a while now. There’s a video you can see in the February 19  blog entry: Slots for a New Generation. I haven’t been able to find a slot for Guitar Hero yet, but G2 Game Design plans to come out with the game as a skill-based slot according to AP articles.

Nevada’s governor Brian Sandoval has signed Senate Bill 9 that paves the way for slot machines in Nevada to incorporate skill-based, arcade-like aspects into games. There may be variable payback to these slots. “The payback on a slot machine is currently around the 88% mark, but this could rise to 98% for a skill-based slot if a player is especially proficient at a game, ensuring the house still turns a profit. If a game is a pure skill game, only the most skillful will win and that’s not a mass-market product” says Meyerhofer. “Hybrid games have a blend of skill and chance in the way that poker does. You won’t win every single night, but you can win often enough to take a chance.” Maybe so, but 98% payback seems very high to me. Even if few players will have the skill to win these games.

Dyed in the wool casino players probably will not like the prospect of casinos eventually resembling an amusement arcade. They will need to achieve a balance between traditional and new.  Meyerhofer foresees chance and skill based games spread across the casino floor and into the bars and other areas designed for lounge style gaming. Some casinos may have e-sport zones where you can speculate and wager on various sports or players.  My question is, will there still be banks of slots for those of us depending on luck, not skill, to play?

Skill-based slots are expected to begin appearing in Nevada casinos sometime in 2016. That’s when we’ll get to see whether these machines do captivate the Playstation and mobile gaming generation. And whether the blue-haired ladies and the silver foxes can still find enough double/triple diamond games to entice them to play in their grandsons’ gaming houses.  I hope so. But you probably won’t see me there!

Don't Gamble With Your Taxes

Okay, so here's your commercial. I apologize in advance.

Taxes aren't the most popular topic for bedtime reading, I suppose, but hopefully (hopefully? more like definitely) you won some money this year. If so, you're going to need to know about this in order to stay out of trouble with the IRS at tax time.

My new book should make filing your slot wins in April a little less stressful. If you want to read some of what I've written before on this subject (and read it FOR FREE), you can read my earlier blog posts here:

Gambling and Taxes Part 1

Gambling and Taxes Part 2

Gambling and Taxes Part 3

In “Don't Gamble With Your Taxes,” I discuss everything that Recreational (Casual) and Professional Gamblers need to know when filing their tax returns.

Topics covered include: How to report wins, deduct losses, and create a tax journal with records that comply with IRS requirements. Also featured are key future developments and upcoming changes in the law that every gambler needs to know about.

Buy your copy today!Available at Amazon on Kindle and in Paperback.

AZ New Class 2 Casino

Usually when I write something on my blog, it is related in some way to gambling in California. Today our travels are taking us to Arizona instead. 

If you are a slot fanatic, you might have seen a thread on one their forums about a new Class 2 Native American casino opening this December in Arizona. If you haven’t heard about AZ’s West Valley Casino, check it out HERE. For another view, take a quick look HERE. You’ll find some bias in the presentation of the issue depending on which article you read. You might even need to visit a couple sites to see what all the fuss is about. It’s more than whether the games are Class 2 or Class 3.

The Tohono O’odham Nation has been trying to open a Class 3 Vegas style casino just west of Phoenix, near the borders of Glendale and Peoria for the past 6 years. They have offered, without success, to pay the State and Glendale to license Class 3 machines even though the Tribe could operate Class 2 machines much more cheaply. The State has rejected these offers. So now the tribe plans to bypass State licensing and open its West Valley Casino without State approval. That means it must operate all Class 2 gaming machines. 

We’ve talked a lot about Class 2 slots over the past year. I have four posts earlier in this blog about the difference between Class 2 and Class 3 games. Random $$ Slots has a YouTube channel where you can watch and learn about 25 of these Class 2 games if you are interested in seeing them played. You might know Class 2 and Class 3 games are not the same, but many people can’t tell the difference. 

The biggest difference to the tribe and to the state is a financial one. State compacts require large payments from the tribes to license Class 3 slots, but not Class 2 ones. The principal difference to the player is in how the machines play. Class 2 games are like electronic bingo games with a central server where there are at least two players competing for a jackpot. Class 3 Vegas style games have set odds and results determined by a random number generator with the players competing against the casinos. 

When completed, the new Arizona Class 2 casino will have 1,089 gaming machines, but no blackjack or other table games. Currently there are only 40 Class 2 machines in use in the entire state of Arizona, according to Andy Asselin, CEO of the tribe’s Desert Diamond Casinos and Entertainment. Ground was broken on West Valley on August 28, 2014. Construction is expected to be completed in early 2016. West Valley will be a 1.2 million square-foot casino located on 78-acres near the sports and entertainment district of western Maricopa County and will include a spa, hotel, events center, bars and restaurants, retail space and a convention center. It has the potential to generate a lot of income for the tribe and for the state. You would think they’d be anxious to come to an agreement.

The casino’s problems all stem from Indian Gaming Regulations, and how they are applied to Trust Lands. The property owned by West Valley was not part of the original reservation. It is replacement land held in trust for the Indians by the US government. 

Under the Indian Regulatory Act of 1934, tribes are allowed to obtain additional land and convert it into trust status. This is land held by the federal government for the benefit of tribal members. It must be contiguous to the existing reservation land or it must be from federal surplus lands. When approved by both the Department of the Interior and by Congress, this land legally becomes part of the tribe’s reservation and can become gaming-eligible under state and federal law.

IGRA prohibits gaming on lands acquired for Indians in trust after its enactment date October 27, 1988. There are exceptions, however. The exceptions include (1) land contiguous to the reservation, (2) land acquired in the best interest of the tribe and not detrimental to the local community which meets the governor’s approval, (3) land acquired for tribes that had no reservation when IGRA was enacted, (4) land acquired as part of a reservation for a newly recognized tribe or the restoration of lands for a restored tribe. Section 20(b)(1)(A) of IGRA allows gaming establishments of such land held in trust if a gaming establishment would be in the best interest of the tribe and not detrimental to the surrounding community, and the governor concurs. This is known as “Two Part Determination.” Once done, any land subject to the determination is essentially excised “out of state” and off the tax rolls without legislative consultation. Excising land off the state tax rolls is not something states want to do.

Here’s what happened to the Tohono O’odham Nation: 

During the 3 year period from 1957-1960, the United States Army Corp of Engineers constructed the Painted Rock Dam to help control seasonal floods on the lower reaches of the Gila River. Things did not go as planned, and water impounded by the Painted Rock Dam caused the flooding of about 10,000 acres of the Gila Bend Reservation. The flooding destroyed a 750-acre tribal farm and several communities. Residents were relocated to a 40-acre parcel called San Lucy Village, Arizona. 

In 1986, the federal government and the nation approved a settlement in which the nation agreed to give up its legal claims in exchange for $30,000,000 and the right to add up to 10,000 acres of newly purchased land to its reservation. This was authorized by the Gila Bend Indian Reservation Lands Replacement Act, Public Law 99-503. In 2003 the nation purchased 135 acres of unincorporated land near Glendale, AZ, for replacement land for the purposes of economic and community development. Some claim the tribe did not make its intentions clear when it acquired this replacement land.

The nation asked the Secretary of the Interior to take the land into trust allowing them to build a casino per IGRA. Lawsuits have challenged the qualifications of these 135 acres as replacement land. They have also accused the tribe of deceptive behavior and misrepresentations as to the nature of the planned casino.

The tribe has also sued state officials alleging the department of gaming has exceeded its authority interfering with its efforts to open the casino. AZ and rival gaming tribes claim the 2002 compacts prohibit additional casinos in metro Phoenix. Courts have ruled this is not true, and that ruling is now under appeal.

So, will Arizona have a new Class 2 casino for the new year? Maybe. Maybe not. The tribal chairman Edward Manuel says the tribe will operate as a Class 2 casino until its issues with the state are resolved and then will convert to Class 3 gaming. So, if you are planning a trip to Arizona for the Fiesta Bowl on New Year’s Day you may or may not be able to get in some gambling time at West Valley before or after the game. Or, as my son jokes, you can always visit the Grand Canyon and throw your money down that hole instead. Stay tuned.