Global gaming ks -01december2010

Kansas Lottery Gaming Facility Review Board
Presented by: Global Gaming KS, LLC
In Topeka, Kansas, December 01, 2010.

Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
Presentation Outline
1. Mistakes in Estimates and Analysis
2. Flaws in Market Analysis
3. Global Gaming’s Conservative Development Plans
4. Primary Considerations
5. Close
2
Introduction

Introduction
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5. Close
4
Introduction

Apples and oranges have been compared
in Gaming Revenue Projections!
5
2012 Year 1 Year 2 Year 3 Year 4 Year 5 (FBO)
GGS As-Submitted 126,290,000 128,662,500 140,707,500 140,707,500 156,585,000 170,000,000
GGS with State Proposed
Inflation Factor 133,981,061 140,589,514 158,366,291 163,122,205 186,978,149 202,997,000
Cummings Projection 62,100,000 (*) - 141,200,000 - 155,800,000 160,500,000
Note: Considered Year-2012 as a partial year.
Gaming Revenue Projections

Apples and oranges have been compared
in Gaming Revenue Projections!
• Time to achieve full build-out
6

Global Gaming’s Permanent v. Peninsula Gaming’s
Interim Facility Considerations
• The Consultants appeared to
assume no material Revenue
differential or impact would exist
between:
• Global Gaming’s permanent
facilities with complete amenities
on Day-One
v.
• Peninsula Gaming’s smaller
interim facility without full
amenities with on-going
construction impact on customers.
7
Global Gaming
at Day-One
Peninsula Gaming
at Day-One
Facility Square
Footage 260,000 100,000
Casino Square
Footage 73,000 44,000
Entertainment and
Convention Center
Square Footage
33,000 for permanent 1,400-seat
premium indoor center
Equestrian Center used as
temporary casino
Number of
Restaurants and
Bars
1. The Brewhouse
2. Liberty Deli
3. Las Vegas-Style Buffet
4. Bellini's Steak Seafood & Pasta
5. The Bank Lounge Bar
6. Roulettes Center Bar 50-seat snack bar & kiosks
Number of Slots 1,300 1,310
Number of Tables 60 32
RV Park
availability YES NO
Golf Course
availability YES NO
Hotel YES NO

Global Gaming’s Travel Plaza Revenue Impact
8
2014
Incremental
Gaming
Revenue Visitors
Travel Plaza Cummings Estimate of GGS'
Travel Plaza 2.9m 20,000
Wells Gaming Research's
Estimate of GGS' Travel
Plaza 5.0m 100,000
Equestrian Center
Wells Gaming Research's
Estimate of the Peninsula
Gaming Equestrian Center 2.45m 33,000

Global Gaming’s Travel Plaza Revenue Impact
• It is important to understand the Travel Plaza strategy!
• It is important to understand all of the amenities of the Travel Plaza.
• It is important to understand the Travel Plaza will not be opened until it has
direct I-35 access.
• It is important to understand the Travel Plaza will cater to the gaming needs of
its customers via dedicated gaming space, complying with the law.
• Finally, our practical experience demonstrates up to 10% incremental gaming
Revenue or up to $20m.
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5. Close
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Inherent Flawed Assumptions in the Gravity Model Analysis –
The Cummings Gravity Model projects a 22% difference in Revenues
between proposed facilities at Exit 19 and at Exit 33.
The disparity can be attributed to two broad assumptions in the
Model:
• Distance Assumptions
• Attractiveness Assumptions
11

Additional Distance to a Facility Matters to Wichita Residents
• Cummings assumes Revenue declines 38% as the distance from a
primary market doubles.
• Detailed of our analysis begins of p. 7 of our full report. The
description of adjustments we proposed begins on p. 16.
12

• The analysis incorrectly assumes the Oklahoma border casinos have the
attraction of a destination such as a grouping of casinos in Atlantic City, where
in reality these border casinos do not constitute a destination because of their
lack of amenities, competitive game offerings, fewer number of games per
facility and lack of geographic proximity.
• Even if one accepted the Oklahoma border casinos as a destination, the
analysis would still not recognize the quality disparity between the Global
Gaming property in Sumner County and these other facilities. For example, in
Atlantic City, Borgata outperforms most other casinos as does L’Auberge in
Louisiana and Wynn compared to Circus Circus in Las Vegas.
Attractiveness Assumption
13

• Distance assumptions between Exit 19 and Exit 33 reduces the
difference by a total of 10% (from 22% to 12%).
• The cumulative attractiveness changes by an additional 8% (from the
remaining 12% to 4%).
• The remaining 4% may be attributed to other factors and partially to
distance, which we do not believe is material.
Net Result of Our Adjustments to Gaming Revenues
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5. Close
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• Global Gaming will open a 260,000 square foot permanent destination facility with hotel,
with complete amenities, on Day-One, irrespective of any market changes.
• Global Gaming’s future development (20% of investment) is being phased over a
number of years. However, we have clearly indicated that this can be accelerated as the
market dictates.
• Our management contract provides for a “time out” to review the effect of any
Wyandotte development on destination plans. This is prudent for the State as it allows
us to judge the right competitive response to the Wyandotte’s proposed development.
• We have proven development experience in responding to competitive changes that has
led us to the Number 1 position in gaming in the State of Oklahoma.
3. Global Gaming’s Conservative Development
Schedule – Management Contract Provisions
16

• Our facility proposes 1,300 slots and 60 table games on Day-One, in a
permanent facility.
• We proposed incrementally adding to the slots capacity to a total of
2,000 in three tranches every 24 months. We have clearly stated, and
state again, that this schedule will be accelerated as the market
dictates.
3. Global Gaming’s Conservative Development
Schedule – Deployment of Additional Slot Games
17

5. Close
18

We respectfully submit to the Review Board the following four
considerations in your deliberations:
I. We have financial capability and commitment that is not market
dependant: financial capability is not a simple “pass/ fail” test.
II. We have significant management, operational, and
development capability and experience: As Management
Matters.
III. We are strongly committed to the Exit 19 location: As the Site
matters.
IV. We have a clear plan to support the Sumner County community:
As strong community involvement matters.
19

Financial Capability
We have financial capability and commitment that is not market dependant:
Financial capability is not a simple “pass/ fail” test.
• We have a firm commitment from Jefferies for funding, not subject to market availability. This will be
executed subject to obtaining the license and regulatory approvals and minor outstanding due
diligence items.
• We have shown to the Financial Consultant our equity capability.
• We have no market debt and have shown to the Financial Consultant a highly liquid balance sheet
with liquid assets of many hundreds of $millions. This reflects our substantial business operations
(some 50 plus) and our conservative approach to business.
• The strength of your balance sheet matters, in weathering future market changes such as downturn in
the credit market or a Wyandotte development.
• Finally, financial capability matters in ensuring the ability to carry out future development plans and
commitments.
20

Management, Operational and Development Capability
We have significant management, operational, and development capability and
experience: As Management Matters.
• We currently operate 13,000 slots (or 27% of the Oklahoma market) and hold the Number 1 gaming
position in Oklahoma, a densely populated and competitive gaming market (there are an estimated
total of 47,000 slots in Oklahoma).
• We are the Number 1 private employer in Oklahoma.
• We have developed 16 gaming properties including Riverwind Casino and the adjacent gaming
properties of Goldsby Gaming Center and Newcastle Gaming that collectively have $250m p.a. in
gaming revenue.
• We have developed four hotels including a $70m, 395 suites and rooms, four-star hotel.
• We have amassed 2.3 million customers along the I-35 corridor.
• We have other substantial businesses including healthcare, energy, banking and manufacturing.
• We have developed a number of large scale greenfield developments of a non-gaming nature such as
a new hospital in Ada, OK for over $150m.
• Stan Fulton, an industry recognized leader, is a financial partner who also brings additional advisory
capacity and also substantial financial capability.
21

Commitment to Exit 19
We are strongly committed to the Exit 19 location: As the Site matters.
• We had the choice of a site at Exit 33 and three separate sites at Exit 19,
• We deliberately chose our current one clear site as:
 Refuting suggestion of significant differential in revenue between Exit 19 and 33
 Having readily available infrastructure with a 10 to 1 infrastructure and land cost
advantage over Exit 33 sites (allowing substantially more of the investment to be
directed to destination quality)
 Having overwhelming community support
 Supporting the belief that the location affords the greatest potential for economic
development impact on Sumner County
 Having no legal issues
22

Strong Community Involvement Matters
We have a clear plan to support the Sumner County community:
As strong community involvement matters.
• We have a strong track record in community development and have previously
spoken of this.
• A recent article in The Wichita Eagle evidenced this track record.
• Global Gaming amended our Sumner County development agreement to contribute a
minimum of $1.5m p.a. to education, health, and economic community development
activities in Sumner County.
• If selected, Sumner County will form a 501(3)(c) Sumner County Foundation to
distribute the funds. This will be composed of the mayors of each of the 11 cities in
Sumner County with the Chair of the Sumner County Commissioners. Some initial
formulas for the distribution of funds have been established.
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5. Close
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5. Close
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