Potential Impact of New Casinos On Existing Sparks, Nevada Casinos September 28, 2005 Presentation to: AD HOC Committee on Non-restricted Gaming The City of Sparks, Nevada Prepared By: Wells Gaming Research 495 Apple Street, Suite 205 Reno, NV 89502
Jan 03, 2016
Potential Impact of New Casinos
On Existing Sparks, Nevada Casinos
Potential Impact of New Casinos
On Existing Sparks, Nevada Casinos
September 28, 2005 Presentation to:AD HOC Committee on Non-restricted
Gaming
The City of Sparks, Nevada
Prepared By:
Wells Gaming Research495 Apple Street, Suite 205
Reno, NV 89502
September 28, 2005 Presentation to:AD HOC Committee on Non-restricted
Gaming
The City of Sparks, Nevada
Prepared By:
Wells Gaming Research495 Apple Street, Suite 205
Reno, NV 89502
August 2005 Wells Gaming Research Slide 2
Potential Impact of New Casinos on Existing Sparks Casinos
Scope of Work Current Status & Trends - Tribal Gaming Impact Demographic Projection 1,440 square miles to 2010 Gravity Model - Local Gaming Market
Player Counts Existing Casinos - Meeting With Management Local Market Attraction Factors
Survey of Sparks Gamblers Potential New Casino Locations 7 in Sparks, 2 in Reno Estimate Impact on Existing Sparks Casinos
August 2005 Wells Gaming Research Slide 3
Figure 1-1 Five Year Compound Growth Rate in Gaming Revenues
Washoe County - All Non-Restricted Locations 1980 - 2004
-0.02
-0.01
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Washoe Co.
IGRA1988
67 Tribal Casinos Open in CA(38), WA(21), & OR(8)
CA Prop 5March 2000
Economic SlowdownJan 2001
Silver Legacy OpenedJuly 1995
Source: Wells Gaming Research
Thunder Valley
Opened Jun 2003
911
54 CACasinos
12/04
89 Tribal CasinosCA,WA,OR
First Wave of Tribal Casinos
Second Wave
Potential Impact of New Casinos on Existing Sparks Casinos
August 2005 Wells Gaming Research Slide 4
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 2-10Washoe County Gaming vs. RetailAnnual Revenue -Fiscal Years in $Millions
$3,500$3,750$4,000$4,250$4,500$4,750$5,000$5,250$5,500$5,750$6,000$6,250$6,500
1996 1997 1998 1999 2000 2001 2002 2003 2004
$900$925$950$975$1,000$1,025$1,050$1,075$1,100$1,125$1,150$1,175$1,200
Retail Gaming
Retail Sales Gaming Win
August 2005 Wells Gaming Research Slide 5
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 1-2Summary of Casino Statistics for Washoe County
for 1995, 2000, & 12 Months Ended June 30, 2005
Before Proposition 1-A After Proposition 1-A
Gaming Statistics 1995 2000% Chg
1995 -200012-Months
Ended 6-2005
% Chg 2000 -12 months
Ended 6-2005
% Chg 1995 -12 months
Ended 6-2005
Player Counts 10,913 10,123 -7% 6,798 -33% -38%
Number of Locations 48 40 -17% 37 -8% -23%
Gaming Capacity
Slot Machines 29,324 28,698 -2% 23,729 -17% -19%
Table Games 989 836 -15% 662 -21% -33%
Win per Unit
Slot Machines $64 $80 25% $90 13% 41%
Table Games $623 $790 27% $779 -1% 25%
Gaming Revenues
Slot Machines $687,784,000 $839,516,000 22% $777,902,000 -7% 13%
Table Games $224,740,000 $241,635,000 8% $188,208,000 -22% -16%
Total $972,599,000 $1,128,851,000 16% $1,006,056,000 -11% 3%
Data Sources: Nevada GCB Monthly Revenue Reports & WGR, July 2005.
August 2005 Wells Gaming Research Slide 6
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 2-1 Casinos in US 2003 - 2004
Type of Casino# of
States# of
CasinosRevenue in
Billions of $'s
Commercial Casinos 11 443 $27.0
Racetrack Casinos 8 15 $2.2
Tribal Casinos 28 330 $16.7
Total 35 788 $45.9
Data Sources: American Gaming Association, National Indian Gaming Association, & Wells Gaming Research.
August 2005 Wells Gaming Research Slide 7
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 2-2Annual Gaming Revenue for Tribal Casinos Located in Region II 1
(Dollars in Thousands)
Description# of
Casinos Gaming Revenues Change % Change
1999 - WGR 39 $1,200,000
FY 2001 - NIGC 48 $2,891,522 $1,691,522 141%
FY 2002 - NIGC 51 $3,678,095 $786,573 27%
FY 2003 - NIGC 54 $4,699,889 $1,021,794 28%
FY 2004 - NIGC 52 $5,788,332 $1,088,443 23%
Footnote 1 : The National Indian Commission includes California & northern Nevada in Region II even through there are no Tribal casino located in northern Nevada.
Data Sources: National Indian Gaming Commission & Wells Gaming Research, August 2005.
August 2005 Wells Gaming Research Slide 8
Potential Impact of New Casinos on Existing Sparks Casinos
Figure F2-11Airline Passengers Deplaned at Reno-Tahoe International
Airport
Final Destination - Reno-Tahoe Jan 96 through Jul 05
125,000
150,000
175,000
200,000
225,000
250,000
275,000
300,000
325,000
350,000
375,000
Jan-96Mar-96May-96Jul-96Sep-96Nov-96Jan-97Mar-97May-97
Jul-97Sep-97Nov-97Jan-98Mar-98May-98Jul-98Sep-98Nov-98Jan-99Mar-99May-99
Jul-99Sep-99Nov-99Jan-00Mar-00May-00Jul-00Sep-00Nov-00Jan-01Mar-01May-01
Jul-01Sep-01Nov-01Jan-02Mar-02May-02Jul-02Sep-02Nov-02Jan-03Mar-03May-03
Jul-03Sep-03Nov-03Jan-04Mar-04May-04Jul-04Sep-04Nov-04Jan-05Mar-05May-05
Jul-05
Airline Passengers Deplaned at Reno-Tahoe International Airport
Deplaned
Sept-ll-2001Data Source: Airport Authority of Washoe Co., Chart by WGR
American buys Reno Air1998 - Aug 1999
Trend: Down 75 k per month or 27%, but turning up
August 2005 Wells Gaming Research Slide 9
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 2-3Closest California Tribal Casinos
Existing & Future Casinos
Casino Name# of Slots
# of Tables
# of Rooms
Player
Counts1
Utilization Percent
Est Gaming
Rev/Yr2
Existing Casinos$'s in
Millions Jackson Rancheria 1,854 41 146 792 37% $141
Thunder Valley 2,929 94 0 1,417 40% $375
Cache Creek 2,486 129 200 1,206 36% $332
Total Existing 7,269 264 546 3,415 38% $848
Future Casinos San Pablo 2,500 100 0 $400
Foothill Oaks 2,000 80 250 $194
Total Future 4,500 180 250 $594
Grand Total 11,769 444 796 $1,442
Reno / Sparks Total 20,236 592 15,175 6,071 24% $894
(1) Player counts conducted Nov-Dec 2004.
(2) All revenue estimates by WGR except Foothill (by developers).
Data Source: Wells Gaming Research, January 2005.
August 2005 Wells Gaming Research Slide 10
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 2-4Potential Impact of Two New Northern California Casions
to the Reno/Sparks Gaming Market
Casino# of
Gamblers# of
Annual TripsEstimated Gross Gaming Revenue
San Pablo -33,135 -99,404 -$14,910,660
Shingle Springs -9,071 -27,212 -$3,401,539
Total -42,206 -126,617 -$18,312,199
Source: Wells Gaming Research.
August 2005 Wells Gaming Research Slide 11
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 1-5 Summary of Population & Median Household Income Projections
Population Subregions 2000 2004 2005 2006 2007 2008 2009 2010
Avg Annual Growth
Rate 2000-2005
Avg Annual Growth
Rate 2005-2010
Total Population 338,954 390,709 399,531 411,310 422,547 433,876 443,557 451,586 3.3% 2.5%
Adult Population 240,405 276,690 282,731 290,726 298,322 306,084 312,784 318,377 3.3% 2.4%
Median Household Incomes:
Subregions $49,301 $56,987 $59,089 $61,268 $63,528 $65,871 $68,300 $70,819 3.7% 3.7%
State of Nevada $44,581 $51,547 $53,452 $55,428 $57,477 $59,601 $61,805 $64,089 3.7% 3.7%
US $41,994 $48,005 $49,638 $51,326 $53,072 $54,877 $56,744 $58,674 3.4% 3.4%
Data Sources: Bureau of Business & Economics, UNR & Wells Gaming Research, August 2005.
August 2005 Wells Gaming Research Slide 12
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 1 - 3 Sparks Casino Gaming Revenues for 2005
Comparison of Total Revenues with Local Market Revenues
(In Thousands of Dollars)
Gaming Revenues Dollar Amount
Total Gaming Revenues for 11 Non-restricted Locations in Sparks for the 12 Months Ended June 30, 2005 $161,876
Estimated 2005 Gaming Revenues from Local Residents at 10 Existing Casinos $109,088
Percent of Sparks Gaming Revenues that are Generated by Local Residents 67%
Data Source: Wells Gaming Research, August 2005.
August 2005 Wells Gaming Research Slide 13
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 1 - 4Estimated Impact of Potential New Casinos in 2010On the Gaming Revenues of Ten Existing Sparks Casinos
In Millions of Dollars
Single Casino ScenariosLow
ImpactHigh
ImpactLow % Impact
High % Impact
Scenario 1 Tierra Del Sol -$13.4 -$21.1 -10% -16%
Scenario 2 Sparks Galleria -$5.6 -$14.2 -4% -11%
Scenario 3 Copper Canyon -$2.2 -$6.2 -2% -5%
Scenario 4 Wingfield Springs -$8.6 -$15.9 -7% -12%
Scenario 5 Downtown Sparks -$1.2 -$2.9 -1% -2%
Scenario 6 Steamboat Station -$3.1 -$4.1 -2% -3%
Scenario 7 Convention Station -$3.8 -$7.1 -3% -5%
Multiple Casino ScenariosLow
ImpactHigh
ImpactLow % Impact
High % Impact
Scenario 8 = Casinos 1 & 2 -$16.8 -$28.2 -13% -22%
Scenario 9 = Casinos 1, 2, & 3 -$18.3 -$31.5 -14% -24%
Scenario 10 = Casinos 1 & 6 -$16.5 -$25.1 -13% -19%
Scenario 11 = Casinos 1, 3, 6, & 7 -$21.1 -$34.1 -16% -26%
Scenario 12 = Casinos 1, 2, 3, 6, & 7 -$24.3 -$40.2 -19% -31%
Scenario 13 = All Seven Casinos -$27.5 -$44.2 -21% -34%
Source: Wells Gaming Research, August 2005.
$24.6 &19%
$37.0 &29%
Expanded Scope of Tierra Del Sol
Announced Sept 23, 2005
August 2005 Wells Gaming Research Slide 14
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-1Scenario 1 - One New Casino - Tierra Del Sol
Estimated Impact on Gaming RevenuesFor 10 Existing Sparks Casinos
Base Case - If No New Casinos are BuiltYear 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - One New Casino - Tierra Del Sol is BuiltYear 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $106,307,000 $109,671,000 $112,718,000 $115,512,000
Impact on 10 Existing Sparks Casinos $0 $0 -$11,173,000 -$11,933,000 -$12,705,000 -$13,400,000
% Impact -10% -10% -10% -10%
High Case - One New Casino - Tierra Del Sol is BuiltYear 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $99,749,000 $102,716,000 $105,392,000 $107,854,000
Impact on 10 Existing Sparks Casinos $0 $0 -$17,731,000 -$18,888,000 -$20,031,000 -$21,058,000
% Impact -15% -16% -16% -16%
Data Source: Wells Gaming Research, September 2005.
August 2005 Wells Gaming Research Slide 15
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-1aRevised Scenario 1 - One New Casino - Tierra Del Sol
Estimated Impact on Gaming RevenuesFor 10 Existing Sparks Casinos
With increased attraction factors for Peppermill and Tierra Del Sol
Base Case - If No New Casinos are BuiltYear 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - One New Casino - Tierra Del Sol is BuiltYear 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $101,174,000 $104,257,000 $107,042,000 $109,600,000
Impact on 10 Existing Sparks Casinos $0 $0 -$16,306,000 -$17,347,000 -$18,381,000 -$19,312,000
% Impact -14% -14% -15% -15%
High Case - One New Casino - Tierra Del Sol is BuiltYear 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $96,590,000 $99,422,000 $101,974,000 $104,325,000
Impact on 10 Existing Sparks Casinos $0 $0 -$20,890,000 -$22,182,000 -$23,449,000 -$24,587,000
% Impact -18% -18% -19% -19%
Data Source: Wells Gaming Research, Revised September 27, 2005.
August 2005 Wells Gaming Research Slide 16
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-2Scenario 2 - One New Casino - Sparks Galleria
Estimated Impact on Gaming RevenuesFor 10 Existing Sparks Casinos
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - One New Casino - Sparks Galleria is Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $112,600,000 $116,481,000 $120,066,000 $123,343,000
Impact on 10 Existing Sparks Casinos $0 $0 -$4,880,000 -$5,123,000 -$5,357,000 -$5,569,000
% Impact -4% -4% -4% -4%
High Case - One New Casino - Sparks Galleria is Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $105,014,000 $108,532,000 $111,773,000 $114,733,000
Impact on 10 Existing Sparks Casinos $0 $0 -$12,466,000 -$13,072,000 -$13,650,000 -$14,179,000
% Impact -11% -11% -11% -11%
Data Source: Wells Gaming Research, September 2005.
August 2005 Wells Gaming Research Slide 17
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-3Scenario 3 - One New Casino - Copper Canyon
Estimated Impact on Gaming RevenuesFor 10 Existing Sparks Casinos
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - One New Casino - Copper Canyon is Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $119,541,000 $123,269,000 $126,673,000
Impact on 10 Existing Sparks Casinos $0 $0 $0 -$2,063,000 -$2,154,000 -$2,239,000
% Impact -2% -2% -2%
High Case - One New Casino - Copper Canyon is Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $115,902,000 $119,472,000 $122,733,000
Impact on 10 Existing Sparks Casinos $0 $0 $0 -$5,702,000 -$5,951,000 -$6,179,000
% Impact -5% -5% -5%
Data Source: Wells Gaming Research, September 2005.
August 2005 Wells Gaming Research Slide 18
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-4Scenario 4 - One New Casino - Wingfield Springs
Estimated Impact on Gaming RevenuesFor 10 Existing Sparks Casinos
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - One New Casino - Wingfield Springs is Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $113,993,000 $117,291,000 $120,322,000
Impact on 10 Existing Sparks Casinos $0 $0 $0 -$7,611,000 -$8,132,000 -$8,590,000
% Impact -6% -6% -7%
High Case - One New Casino - Wingfield Springs is Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $107,368,000 $110,273,000 $112,941,000
Impact on 10 Existing Sparks Casinos $0 $0 $0 -$14,236,000 -$15,150,000 -$15,971,000
% Impact -12% -12% -12%
Data Source: Wells Gaming Research, September 2005
August 2005 Wells Gaming Research Slide 19
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-5Scenario 5 - One New Casino - Downtown Sparks
Estimated Impact on Gaming RevenuesFor 10 Existing Sparks Casinos
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - One New Casino - Downtown Sparks is Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $116,422,000 $120,514,000 $124,295,000 $127,757,000
Impact on 10 Existing Sparks Casinos $0 $0 -$1,058,000 -$1,090,000 -$1,128,000 -$1,155,000
% Impact -1% -1% -1% -1%
High Case - One New Casino - Downtown Sparks is Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $114,884,000 $118,916,000 $122,653,000 $126,065,000
Impact on 10 Existing Sparks Casinos $0 $0 -$2,596,000 -$2,688,000 -$2,770,000 -$2,847,000
% Impact -2% -2% -2% -2%
Data Source: Wells Gaming Research, September 2005.
August 2005 Wells Gaming Research Slide 20
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-6Scenario 6 - One New Casino - Steamboat Station
Estimated Impact on Gaming RevenuesFor 10 Existing Sparks Casinos
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - One New Casino - Steamboat Station is Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $118,836,000 $122,479,000 $125,823,000
Impact on 10 Existing Sparks Casinos $0 $0 $0 -$2,768,000 -$2,944,000 -$3,089,000
% Impact -2% -2% -2%
High Case - One New Casino - Steamboat Station is Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $117,897,000 $121,488,000 $124,790,000
Impact on 10 Existing Sparks Casinos $0 $0 $0 -$3,707,000 -$3,935,000 -$4,122,000
% Impact -3% -3% -3%
Data Source: Wells Gaming Research, September 2005.
August 2005 Wells Gaming Research Slide 21
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-7Scenario 7 - One New Casino - Convention Station
Estimated Impact on Gaming RevenuesFor 10 Existing Sparks Casinos
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - One New Casino - Convention Station is Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $121,728,000 $125,130,000
Impact on 10 Existing Sparks Casinos $0 $0 $0 $0 -$3,695,000 -$3,782,000
% Impact -3% -3%
High Case - One New Casino - Convention Station is Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $118,524,000 $121,848,000
Impact on 10 Existing Sparks Casinos $0 $0 $0 $0 -$6,899,000 -$7,064,000
% Impact -6% -5%
Data Source: Wells Gaming Research, September 2005.
August 2005 Wells Gaming Research Slide 22
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-8Scenario 8 - Two New Casinos - Tierra Del Sol & Sparks Galleria
Estimated Impact on Gaming RevenuesFor 10 Existing Sparks Casinos
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - Two New Casinos - Tierra Del Sol & Sparks Galleria
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $103,237,000 $106,485,000 $109,426,000 $112,125,000
Impact on 10 Existing Sparks Casinos $0 $0 -$14,243,000 -$15,119,000 -$15,997,000 -$16,787,000
% Impact -12% -12% -13% -13%
High Case - Two New Casinos - Tierra Del Sol & Sparks Galleria
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $93,219,000 $95,980,000 $98,472,000 $100,762,000
Impact on 10 Existing Sparks Casinos $0 $0 -$24,261,000 -$25,624,000 -$26,951,000 -$28,150,000
% Impact -21% -21% -21% -22%
Data Source: Wells Gaming Research, September 2005
August 2005 Wells Gaming Research Slide 23
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-9Scenario 9 - Three New Casinos - Tierra Del Sol, Sparks Galleria, & Copper Canyon
Estimated Impact on Gaming RevenuesFor 10 Existing Sparks Casinos
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - Three New Casinos - Tierra Del Sol, Sparks Galleria, & Copper Canyon
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $103,237,000 $105,032,000 $107,921,000 $110,572,000
Impact on 10 Existing Sparks Casinos $0 $0 -$14,243,000 -$16,572,000 -$17,502,000 -$18,340,000
% Impact -12% -14% -14% -14%
High Case - Three New Casinos - Tierra Del Sol, Sparks Galleria, & Copper Canyon
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $93,219,000 $92,834,000 $95,225,000 $97,415,000
Impact on 10 Existing Sparks Casinos $0 $0 -$24,261,000 -$28,770,000 -$30,198,000 -$31,497,000
% Impact -21% -24% -24% -24%
Data Source: Wells Gaming Research, September 2005.
August 2005 Wells Gaming Research Slide 24
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-10Scenario 10 - Two New Casinos - Tierra Del Sol & Steamboat Station
Estimated Impact on Gaming RevenuesFor 10 Existing Sparks Casinos
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - Two New Casinos - Tierra Del Sol & Steamboat Station
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $106,307,000 $106,922,000 $109,791,000 $112,442,000
Impact on 10 Existing Sparks Casinos $0 $0 -$11,173,000 -$14,682,000 -$15,632,000 -$16,470,000
% Impact -10% -12% -12% -13%
High Case - Two New Casinos - Tierra Del Sol & Steamboat Station
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $99,749,000 $99,061,000 $101,514,000 $103,789,000
Impact on 10 Existing Sparks Casinos $0 $0 -$17,731,000 -$22,543,000 -$23,909,000 -$25,123,000
% Impact -15% -19% -19% -19%
Data Source: Wells Gaming Research, September 2005.
August 2005 Wells Gaming Research Slide 25
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-11Scenario 11 - Four New Casinos - 2 in Sparks & 2 in Reno
Tierra Del Sol, Copper Canyon, Steamboat Station & Convention StationEstimated Impact on Gaming Revenues
For 10 Existing Sparks Casinos
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - Four New Casinos - Tierra Del Sol, Copper Canyon, Steamboat, & Convention Ctr.
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $106,307,000 $105,381,000 $105,227,000 $107,769,000
Impact on 10 Existing Sparks Casinos $0 $0 -$11,173,000 -$16,223,000 -$20,196,000 -$21,143,000
% Impact -10% -13% -16% -16%
High Case - Four New Casinos - Tierra Del Sol, Copper Canyon, Steamboat, & Convention Ctr.
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $99,749,000 $95,398,000 $92,735,000 $94,813,000
Impact on 10 Existing Sparks Casinos $0 $0 -$17,731,000 -$26,206,000 -$32,688,000 -$34,099,000
% Impact -15% -22% -26% -26%
Data Source: Wells Gaming Research, September 2005.
August 2005 Wells Gaming Research Slide 26
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-11aRevised Scenario 11 - Four New Casinos - 2 in Sparks & 2 in Reno
Tierra Del Sol, Copper Canyon, Steamboat Station & Convention StationEstimated Impact on Gaming Revenues
For 10 Existing Sparks Casinos
With increased attraction factors for Peppermill and Tierra Del Sol
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - Four New Casinos - Tierra Del Sol, Copper Canyon, Steamboat, & Convention Ctr.
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $101,174,000 $100,202,000 $99,970,000 $102,289,000
Impact on 10 Existing Sparks Casinos $0 $0 -$16,306,000 -$21,402,000 -$25,453,000 -$26,623,000
% Impact -14% -18% -20% -21%
High Case - Four New Casinos - Tierra Del Sol, Copper Canyon, Steamboat, & Convention Ctr.
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $96,590,000 $92,434,000 $89,895,000 $91,878,000
Impact on 10 Existing Sparks Casinos $0 $0 -$20,890,000 -$29,170,000 -$35,528,000 -$37,034,000
% Impact -18% -24% -28% -29%
Data Source: Wells Gaming Research, September 27, 2005.
August 2005 Wells Gaming Research Slide 27
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-12Scenario 12 - Five New Casinos - 3 in Sparks & 2 in Reno
Tierra Del Sol, Sparks Galleria, Copper Canyon, Steamboat Station, & Convention StationEstimated Impact on Gaming Revenues
For 10 Existing Sparks Casinos
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - Five New Casinos - Tierra Del Sol, Galleria, Copper Canyon, Steamboat, & Convention
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $103,237,000 $102,329,000 $102,154,000 $104,604,000
Impact on 10 Existing Sparks Casinos $0 $0 -$14,243,000 -$19,275,000 -$23,269,000 -$24,308,000
% Impact -12% -16% -19% -19%
High Case - Five New Casinos - Tierra Del Sol, Galleria, Copper Canyon, Steamboat, & Convention
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $93,219,000 $89,356,000 $86,798,000 $88,729,000
Impact on 10 Existing Sparks Casinos $0 $0 -$24,261,000 -$32,248,000 -$38,625,000 -$40,183,000
% Impact -21% -27% -31% -31%
Data Source: Wells Gaming Research, September 2005.
August 2005 Wells Gaming Research Slide 28
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 3-13Scenario 13 - Seven New Casinos - 5 in Sparks & 2 in Reno
Tierra Del Sol, Sparks Galleria, Copper Canyon, Wingfield Springs, Downtown Sparks, Steamboat Station, & Convention Station
Estimated Impact on Gaming RevenuesFor 10 Existing Sparks Casinos
Base Case - If No New Casinos are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $117,480,000 $121,604,000 $125,423,000 $128,912,000
Low Case - Seven New Casinos - 5 in Sparks & 2 in Reno are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $102,417,000 $99,340,000 $99,082,000 $101,398,000
Impact on 10 Existing Sparks Casinos $0 $0 -$15,063,000 -$22,264,000 -$26,341,000 -$27,514,000
% Impact -13% -18% -21% -21%
High Case - Seven New Casinos - 5 in Sparks & 2 in Reno are Built
Year 2005 2006 2007 2008 2009 2010
10 Existing Sparks Casinos $109,088,000 $113,412,000 $91,551,000 $85,389,000 $82,866,000 $84,668,000
Impact on 10 Existing Sparks Casinos $0 $0 -$25,929,000 -$36,215,000 -$42,557,000 -$44,244,000
% Impact -22% -30% -34% -34%
Data Source: Wells Gaming Research, September 2005.
August 2005 Wells Gaming Research Slide 29
Potential Impact of New Casinos on Existing Sparks Casinos
Survey Highlights - 300 Sparks Gamblers Restricted Gaming - Sparky’s Type Facility:
• 63% visit• 56% dine• 20% show• 16% gamble
Non-restricted Gaming - Casinos with 16 or more slots: • 79% visit • 74% dine • 33% show • 32% gamble
August 2005 Wells Gaming Research Slide 30
Potential Impact of New Casinos on Existing Sparks Casinos
Survey Highlights - 300 Sparks Gamblers 2000 WGR survey - 53.3% of Sparks adults
gamble at casinos
Gambling frequency: • 4.7 times/month
• 55.9 times/year
Casinos where gambled most: • Sparks 63%
• Reno 37%
August 2005 Wells Gaming Research Slide 31
Potential Impact of New Casinos on Existing Sparks Casinos
Survey Highlights - 300 Sparks Gamblers Casinos where also gambled:
• Sparks 40%• Reno 60%
Reasons for selection of casino where gambled most:• Near where I live 24% • Went there to eat 22% • More comfortable 10% • Friendlier staff 10%
August 2005 Wells Gaming Research Slide 32
Potential Impact of New Casinos on Existing Sparks Casinos
Survey Highlights - 300 Sparks Gamblers Casino games played most often:
• Video poker 33%
• Video slots 29%
• Reel slots 22%
• Total slots 84%
• Table games 12%
• Other games 4%
August 2005 Wells Gaming Research Slide 33
Potential Impact of New Casinos on Existing Sparks Casinos
Survey Highlights - 300 Sparks Gamblers Theoretical casino win per visit $33.19 Gambling time per visit about 2 hours Gambling budget per visit $102 mean $40 median Sparks gambler’s views about new neighborhood
casinos:• For 59%• Against 39%
August 2005 Wells Gaming Research Slide 34
Potential Impact of New Casinos on Existing Sparks Casinos
Survey Highlights - 300 Sparks Gamblers Demographics:
• Average length of residence in Sparks 14 years
• Single family residence 72% Apt 17%
• Own home 75% rent 25%
• Gender female 65% male 35%
• Average age 52.5 years
• Average income $59,498
• Employed full time 47% part time 10%
August 2005 Wells Gaming Research Slide 35
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 2-5Reno/Sparks Player Counts
for 1995, 2000, & the 12 Months Ended June 2005
Before Proposition 1-A After Proposition 1-A
Player Counts 1995 2000
% Chg 1995 - 2000
12-Months Ended 6-2005
% Chg 2000 -12 months
Ended 6-2005
% Chg 1995 -12 months
Ended 6-2005
Reno / Downtown 6,714 5,704 -15% 2,992 -48% -55%
Reno / Other 2,214 2,510 13% 2,246 -11% 1%
Sparks 1,985 1,909 -4% 1,560 -18% -21%
Total 10,913 10,123 -7% 6,798 -33% -38%
Data Sources: Nevada GCB Monthly Revenue Reports & WGR, July 2005.
August 2005 Wells Gaming Research Slide 36
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 2-6 Number of Casino Locations
for 1995, 2000, & the 12 Months Ended June 30, 2005
Before Proposition 1-A After Proposition 1-A
Number of Locations 1995 2000% Chg
1995-200012-Months
Ended 6-2005
% Chg 2000 -12 months Ended 6-2005
% Chg 1995 -12 months
Ended 6-2005
Sparks 10 8 -20% 8 0% -20%
Reno 28 22 -21% 17 -23% -39%
Washoe County 48 40 -17% 37 -8% -23%
Data Sources: Nevada GCB Monthly Revenue Reports & WGR, July 2005.
August 2005 Wells Gaming Research Slide 37
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 2-7Gaming Capacity
for 1995, 2000, & the 12 Months Ended June 30, 2005
Before Proposition 1-A After Proposition 1-A
Gaming Capacity 1995 2000% Chg
1995-200012-Months
Ended 6-2005
% Chg 2000 -12 months Ended 6-2005
% Chg 1995 -12 months
Ended 6-2005
Slot Machines
Sparks 5,056 5,044 0% 4,588 -9% -9%
Reno 20,938 20,283 -3% 15,519 -23% -26%
Washoe County 29,324 28,698 -2% 23,729 -17% -19%
Table Games
Sparks 113 96 -15% 79 -18% -30%
Reno 772 644 -17% 507 -21% -34%
Washoe County 989 836 -15% 662 -21% -33%
Data Sources: Nevada GCB Monthly Revenue Reports & WGR, July 2005.
August 2005 Wells Gaming Research Slide 38
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 2-8 Win per Unit for Sparks, Reno, & Washoe County
for 1995, 2000, & the 12 Months Ended June 30, 2005
Before Proposition 1-A After Proposition 1-A
Win per Unit 1995 2000% Chg
1995-200012-Months
Ended 6-2005
% Chg 2000 -12 months Ended 6-2005
% Chg 1995 -12 months
Ended 6-2005
Slot Machines
Sparks $61 $77 26% $82 7% 35%
Reno $66 $82 24% $95 16% 45%
Washoe County $64 $80 25% $90 12% 40%
Table Games
Sparks $466 $506 9% $595 18% 28%
Reno $671 $875 30% $840 -4% 25%
Washoe County $623 $790 27% $779 -1% 25%
Data Sources: Nevada GCB Monthly Revenue Reports & WGR, July 2005.
August 2005 Wells Gaming Research Slide 39
Potential Impact of New Casinos on Existing Sparks Casinos
Figure 2-9Gaming Revenues for Sparks, Reno, & Washoe County
for 1995, 2000, & the 12 Months Ended June 30, 2005
Before Proposition 1-A After Proposition 1-A
Revenue 1995 2000% Chg
1995-200012-Months
Ended 6-2005
% Chg 2000 -12 months Ended 6-2005
% Chg 1995 -12 months
Ended 6-2005
Slot Machines
Sparks $113,116,000 $142,341,000 26% $137,939,000 -3% 22%
Reno $507,155,000 $610,218,000 20% $540,341,000 -11% 7%
Washoe County $687,784,000 $839,516,000 22% $777,902,000 -7% 13%
Table Games
Sparks $19,207,000 $17,764,000 -8% $17,168,000 -3% -11%
Reno $189,141,000 $206,271,000 9% $155,368,000 -25% -18%
Washoe County $224,740,000 $241,635,000 8% $188,208,000 -22% -16%
Totals
Sparks $139,010,000 $165,349,000 19% $158,904,000 -4% 14%
Reno $743,968,000 $854,587,000 15% $728,652,000 -15% -2%
Washoe County $972,599,000 $1,128,851,000 16% $1,006,056,000 -11% 3%
Data Sources: Nevada GCB Monthly Revenue Reports & WGR, July 2005.