Nov 12, 2014
2
Overview
• BestTeam
• BestProject• BestBrands• BestFinancialReturnforKansas
3
OwnershipStructure
KansasEntertainment,LLC
Gaming/HotelOpera?ons:
DennisGomes
Development,Retail&EntertainmentOpera?ons:
JoeWeinberg
Event/RaceOpera?ons:
JeffBoerger
CordishCompanyEnDty:
KansasEntertainmentInvestors,LLC
JoeWeinberg,President
ISCEnDty:
KansasSpeedwayDevelopmentCorp.
JeffBoerger,President
50% 50%
4
BestPartnerforState&LocalGovernment
LonghistoryofworkingproducDvelywithboththeUnifiedGovernment&theState
5
BestPartnerforState&LocalGovernment
PartnershipwiththeKansasLoReryhasshownoutstandingreturnsforKansas 6
ISCHasNa?onalReach
7
PowerofISCVideo
8
TheCordishCompany
PrivatelyHeldforFourGeneraDons9
LongTermVision 10
TheCordishCompany
DiversePor\olio&Developments 11
TheCordishCompany
TheCordishCompany
ExtensiveDevelopmentReach&Assets12
Cordish+ISC+HardRock
TremendousCombinedStrength 13
Cordish+ISC+HardRock
14
TheCordishCompany
DesDnaDonGamingDevelopment15TheimageaboveandthoseusedonsubsequentpagesareofHardRockHotelandCasinos
thatweredevelopedbyaCordishCompanyaffiliatefortheSeminoleTribeofFlorida
UpscaleHotels 16
TheCordishCompany
StateoftheArtCasinos17
TheCordishCompany
DesDnaDonResortAmeniDes 18
TheCordishCompany
PowerfulEntertainmentDistrict19
TheCordishCompany
FullIntegraDonDrivesVisitaDon20
TheCordishCompany
Non‐gamingdesDnaDonentertainmentsignificantlyincreasesgamingrevenues 21
TheCordishCompany
ShortestPaybackofAnyMajorCasinos22
TheCordishCompany
0
2
4
6
8
10
12
FloridaHardRockHotel&Casinos
Mirage MoheganSun
Borgota Paris Bellagio TajMahal BeauRivage
Mandalay
(yearsto
payba
ck)
Source:SeminoleTribeofFlorida
SuperiorFinancialResults1Source:SeminoleTribeofFlorida2Source:ThomasWeiselPartnersLLCResearchReport3Source:GoldmanSachsGlobalInvestmentResearch
(4)Source:MoheganTribalGamingAuthority,SECFiling,10‐KFiling,NOTE:OperaDngIncomeshownforFY2007endedSept.30,200723
TheCordishCompany
$0
$100
$200
$300
$400
$500
$600
$700
$800
FloridaHardRocks(1)
PennNatl(3) Wynn(2) Boyd(2) LasVegasSands(2)
Ameristar(2) MoheganGaming(4)
PinnacleEnter.(2)
2007Opera?ngIncome
CordishHardRockFloridaVideo
24
25
TheCordishCompany
26
TheCordishCompany
TheWalk–AtlanDcCity,NJ
27
TheCordishCompany
CordishProjectsChangeCommuniDes28
TheCordishCompany
CommunityInvolvement29
TheCordishCompany
WorldClassDesignTeam
REPRESENTATIVEPROJECTS
Developer: TheCordishCompany SeminoleHardRockHotel&CasinoHollywood&Tampa;IndianaLive!
LeadArchitect: KlaiJubaArchitects MandalayBay;“W”LasVegas;HardRockLasVegas;FourSeasonLasVegas
InteriorDesigners: CleoDesign MGMCasinoLasVegas;MGMCasinoDetroit;BeauRivageBiloxi;HiltonLasVegas
LaurenceLeeAssociates
BorgataAtlanDcCity;HardRockHollywood&Tampa;KapaluaBayHawaii
Engineer: Burns&McDonnell SprintCenterKansasCity;TrumanSportsComplexKansasCity
30
TheCordishCompany
Management
• DennisGomes– 34YearsGamingExperience– LicensedinNevada&NewJersey– BackgroundIncludes:
• President&CEO,ResortOperaDons‐TropicanaHotels&Casinos,LasVegas,NV&AtlanGcCity,NJ(AztarCorp.)
• President&COO–TrumpTajMajal
• President&COO–GoldenNuggetHotel&Casino• Sr.VicePresident,CasinoOperaDons–HiltonHotels&Casinos,LasVegas,NV
31
Management
DennisGomes
CEO
Gaming/HotelOpera?ons
RobertZiRo
EVP
Food&Beverage
SherryAmos
EVP
Marke?ng
AaronGomes
VP
Marke?ng
RobertAmbrose
EVP
SlotOpera?ons
PeterIng
VP
SlotOpera?ons
DonKneisel
EVP
I.T.
DavidGenDle
EVP
Administra?on
JeanPrice
Director
Administra?on
LatoruaChinn
Manager
DiversityCompliance
FredBurford
EVP
Finance
ShawnMcCloud
VP
Finance
32
Management
YEARSOFGAMINGEXPERIENCE
SherryAmos ExecuDveV.P.‐MarkeDng 24
RobertAmbrose V.P.‐SlotOperaDons 20
FredBurford ExecuDveV.P.‐Finance 25
DavidA.GenDle V.P.‐AdministraDon 24yearswithFBI
PeterIng V.P.–SlotOperaDons 12
DonaldW.Kneisel,II V.P.‐Info.Technology 24
AaronGomes V.P.‐OperaDons 3
ShawnK.McCloud V.P.‐StrategicPlanning 15
JeanPricePreikszaiDs DirectorofCorp.Admin. 28
RobertZiRo ExecuDveV.P.‐Food&Bev. 28
33
GamingComplianceExper?se
OperaDonsteamhasdecadesofexperiencerunningvenuesinthemostdemandinggamingmarkets
34
35
GamingComplianceExper?se
• MulDplemembersoftheteamhavehadsignificantexperienceingamingregulaDonandlawenforcement• NevadaGamingControlBoard
• NewJerseyDivisionofGamingEnforcement
• FBI
Security&Surveillance,InternalControls&InformaDonTechnologyPlansarefullydeveloped
andhavebeensubmiRed 36
GamingComplianceExper?se
CommitmenttoDiversity
KansasSpeedwayandCordishmeetorexceedMBE/WBE/LBEGoals
0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%
4thStreetLive!
CapitalCenter‐PhaseI
CapitalCenter‐PhaseII
Pier4OfficeBuilding
KansasCityLive!ProfessionalServices
KansasCityLive!Construc?onServices
PowerPlant
KansasSpeedway‐ProfessionalServices
KansasSpeedway‐Construc?onServices
KansasSpeedway‐Materials/Supplies
Goal Performance
37
CommunityVideo
38
Overview
• BestTeam
• BestProject• BestBrands• BestFinancialReturnforKansas
39
40
BestLoca?on
OnlylocaDonwitheasyaccessandvisibilitytobothI‐70andI‐435 41
BestLoca?on
OnlySiteWithInfrastructureInPlace42
IntegratedDesign
• IntelligentMasterplanning • IntegraDonwithKansasSpeedway
43• UnmatchedAbilitytoExpand
LuxuryDes?na?onResort
300RoomLuxuryHotelwith50Suites
44
HighEnergyCasino
3,000Slots&140TablesatOpeningWithRoomforExpansion45
IntegratedDesign
• 275,000SquareFeetDesDnaDonRetail,Dining&Entertainment• LiveMusicVenue
46
• 1.5millionsquarefeet • Undergroundstructuredparking47
IntegratedDesign
• Cross‐CurrentofPedestrianTraffic
IntegratedDesign
DesDnaDonpool,fitnesscenter&spaoverlookingspeedway
48
HighEnergyCasino
49
HighEnergyCasino
50
ModernLuxuryDesign
51
IntegratedDesign
Live!DistrictDrivesTourism&GamingRevenue
52
IntegratedDesign
ExtensiveMeeDng&ConvenDonFaciliDes
53
CommunityShugleSystem
54
TemporaryCasino
55
• OpenInEightMonths
• $209MillionAnnualRevenue
• 2000slots
• 75tablegames
56
TemporaryCasino
ExpansionCapabili?es
Hotel/Casino
Expansion
CasinoExpansion
57
World‐ClassDes?na?on
58
Overview
• BestTeam
• BestProject• BestBrands• BestFinancialReturnforKansas
59
GlobalBrandPresence
60
UnparalleledBrandRecogni?on
85%
NaDonalfamiliaritywithHardRockBrand
61Source:ZogbyInternaGonalResearch
HardRockDrivesTourism
76%
NaDonalVisitorstoHardRockProperDesFromOutofState
62Source:ZogbyInternaGonalResearch
FamiliarityWithHardRockBrand
0
10
20
30
40
50
Hard Rock Mohegan Sun Pinnacle Golden
51
22
0 3
36
4 4 3
33
6 3 3
(percent)
National Kansas Statewide KC DMA
Hard Rock Is Exponentially Stronger Than Other Options:
• 2.5 – 50 Times Better Nationally
• 8 – 12 Times Better Statewide
• 5.5 – 11 Times Better in KC
63Source:ZogbyInternaGonalResearch
RegionalTargetMarkets
64
BrandStrength=Visits
65Source:ZogbyInternaGonalResearch
0
5
10
15
20
25
30
35
40
45
50
HardRock LegendsSun Pinnacle Golden
42
21
3 3
47
27
20 22
KansasStatewide KCDMA
Statewideinterestinvisi?ngaHardRockisatleastdoublethatofanyotherpossiblecasino.
HardRockPreferenceIsClear
0
10
20
30
40
50
60
70
80
HardRock LegendsSun Pinnacle Golden
35
11 8
8
71
40 43
46
(percent)
Kansas Statewide KC DMA
Amongthosewhosaytheyare“VeryInterested”invisi?ngacasinointhefuture,moresaytheyareveryinterestedinvisi?ngHardRockoverotherpossiblecasinobrands.
66Source:ZogbyInternaGonalResearch
AffluentCustomersLoveHardRock
0
10
20
30
40
50
60
Hard Rock Legends Sun Pinnacle Golden
58
9 10
8
54
30 28 29
(per
cent
)
Kansas Statewide KC DMA
Those making more than $75,000 a year say they are more likely to visit the Hard Rock than any other brands. Hard Rock scores much better as a regional destination than other brands.
67Source:ZogbyInternaGonalResearch
UnparalleledRela?onshipsWithCorporateLeaders
68
CorporateDecisionsMakersVisitKansasSpeedway
• Therewereover550companiesinvolvedassponsorsinNASCARlastyear
• OurteamisuniquelyposiDonedtoleverageeventsattheSpeedwaytobringconvenDonbusinesstoKCK
• Decision‐makingexecuDvesspendtheirenDredayonSpeedwayproperty
69
RacingFansLikeCasinos
• 57.5%ofKansasSpeedwayfansvisitedacasinointhepast12months
• Ourfansare27%morelikelythantheaveragepersoninKansasCitytovisitacasino
• FansoftheIndyRacingLeagueare85%morelikelytovisitacasino
70Source: Scarborough Research 2007
GeneralMarke?ngStrategy
• Cross‐marketwithSpeedway&tenants
• CreateuniqueVIPexperiencesforbestcustomers
• UseRewardsProgramandCRMtomaximizecustomervalue
• LeverageHardRockbrandstrengthandracingeventsinmarkeDngthattargetstourists
71
Overview
• BestTeam
• BestProject• BestBrands• BestFinancialReturnforKansas
72
BestOverallReturn
GrossGamingRevenues(millions)
0 100 200 300 400 500 600
27% 29% 31%
73
AddiDonal1%VoluntaryFee
toUnifiedGovernment
FeePercentagetoPublicSector
BestTotalFinancialPackage
$75,000,000
$80,000,000
$85,000,000
$90,000,000
$95,000,000
$100,000,000
$105,000,000
$110,000,000
$115,000,000
HardRock Golden Pinnacle LegendsSun
FeestoKansas FeestoProblemGaming FeestoLocalGovernment
$113M $111M
$108M $108M
(Assumes$400milliongrossgamingrevenue) 74
(Assumes$500milliongrossgamingrevenue)
$105,000,000
$110,000,000
$115,000,000
$120,000,000
$125,000,000
$130,000,000
$135,000,000
$140,000,000
$145,000,000
$150,000,000
HardRock Golden Pinnacle LegendsSun
FeestoKansas FeestoProblemGaming FeestoLocalGovernment
$135M$135M
$142.5M
$147M
75
BestTotalFinancialPackage
GamingRevenueForecast
$300
$310
$320
$330
$340
$350
$360
$370
$380
$390
Year1 Year2 Year3 Year4 Year5
(Millions)
Slotmachines PitRevenue Poker&cardgames
$349.3M
$376.2M
$358M$367M
$385.6M
76(Assumes3,000slotmachinesand140tablegames)
Non‐GamingRevenueForecast
77
$0
$10
$20
$30
$40
$50
$60
$70
$80
Year1 Year2 Year3 Year4 Year5
(millions)
Hotel Food Beverage Conven?on Entertainmnent Retail Other
$67.7M $69.9M $74.2M$72M
$65.4M
ResidentVisita?on
78
‐
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Year1 Year2 Year3 Year4 Year5
TotalGamingVisitsPerYear TotalNon‐GamingVisitsPerYear
ResidentEconomicImpact
79
$275
$285
$295
$305
$315
$325
$335
$345
$355
$365
Year1 Year2 Year3 Year4 Year5
(millions)
GamingSpendPerYear Non‐GamingSpendPerYr.
TouristVisita?on
80
‐
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Year1 Year2 Year3 Year4 Year5
TotalGamingVisitsPerYear TotalNon‐GamingVisitsPerYr.
TouristEconomicImpact
81
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
Year1 Year2 Year3 Year4 Year5
(millions)
GamingSpendPerYear Non‐GamingSpendPerYr.
ForecastSummary
82
$250
$300
$350
$400
$450
$500
Year1 Year2 Year3 Year4 Year5
(millions)
GamingTotal Non‐GamingTotal
PublicSectorSummary
83
$0
$20
$40
$60
$80
$100
$120
$140
Year1 Year2 Year3 Year4 Year5
(millions)
StateRevenue PropertyTaxes Sales&UseTax
KeynotesofFinancingPlan
• OwnersofKansasEntertainmenthavesignificantliquidityandfinancingcapabiliDesin‐house
• Ownershaveimpeccabletrackrecordswithfinancingcommunityoverseveraldecades
• MulDplethird‐partysourcesindicatedhighconfidenceindebtfinancingforourproject
84
FinancingPlan:Sources
85
$90
$333
$141
$141
DelayedDrawTermLoan TermLoan(s) CordishEquity/Cash ISCEquity/Cash
(millions)
FinancingPlan:Uses
86
$415
$105
$32
$25
$9 $25
$15$80
HardCosts SopCosts Con?ngencyFinancingCosts&Fees Pre‐OpeningOpera?ons LicensingFeeCageCash&WorkingCapital Pre‐FundedInterestReserve
(millions)
Schedule
87
FinalVideo
88
AppendixASummary
89
• FeePercentageProposaltoState:– 27%totaltaxonfirst$350mmofAnnualGrossGamingRevenue
– 29%totaltaxonGGRbetween$350mmand$400mm
– 31%totaltaxonGGRabove$400mm
• HighestCharitableContribuDons:
– AddiDonal1%ofGGRtoUnifiedGovernmentbeyondstatutoryminimum
AppendixBProposedFeesComparison
90
AppendixCGamingRevenueProjecDon
91
All figures in $000’s
• Gaming revenue forecasts based on detailed market assessment by Innovation Group, the market leader in gaming market analyses.
• Based on 3,000 slot machines and 140 table games. • Kansas Entertainment, LLC believes 3,000 machines is correct
and realistic initial number. This is also consistent with finding of Christiansen Capital Advisors, advisors to State.
• Slot machine capacity would be increased if validated by market demand.
AppendixDNon‐GamingRevenueProjecDon
92
All figures in $000’s
AppendixEEconomicImpact–ResidentsVisitaDon
93
AppendixFEconomicImpact–TouristVisitaDon
94
AppendixGSummaryFinancialProjecDons
95
AppendixHReturnstoPublicSector
96
AppendixIFinancingPlan:Sources&Uses
97