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Entries in Casino (8)

Tuesday
Mar122013

PokerStars' Bid to Buy Casino Could Signal Gambling Gold Rush

iStockphoto/Thinkstock(NEW YORK) -- A move by the online gaming giant PokerStars to buy an Atlantic City, N.J., casino could signal a gold rush for the gambling industry, according to industry watchers.

Online companies are expected to be scrambling for land and casinos in states like Nevada, New Jersey and Delaware, which recently passed laws allowing online gambling if it is affiliated with in-state casinos.  Similar bills have also been introduced in Pennsylvania and Illinois.

PokerStars, part of the online gambling corporation Rational Group, based in the U.K., struck a deal earlier this year to buy the Atlantic Club, an 800-room hotel and casino on the Atlantic City boardwalk, according to paperwork filed with the state's division of gaming enforcement.

The move came after New Jersey Gov. Chris Christie signed a law on Feb. 26 allowing online gambling for residents as long as the games were hosted by in-state casinos located in Atlantic City.

The company, which was previously indicted by the Department of Justice for offering online gambling to U.S. residents, wants to legally operate its website and the casino, according to its owners.  They reportedly paid about $30 million for the casino.

"In a nutshell, the future of gaming will require a mix of online and offline expertise," Eric Hollreiser, spokesman for PokerStars, told ABC News in an email.  "We are the world's largest online poker company and one of the largest producers of live poker tournaments in the world, which we produce in many of the world's best known casinos."

Hollreiser said that the proposed business model would help drive online gamers into casinos for live tournaments, and remind casino-goers to log on and game at home until their next visit.

"We drive traffic from our online tournaments to our major casino partners around the world.  This drives a poker tourism business in cities such as London, Monte Carlo, Barcelona, (and) Rio," he said.  "The traffic runs both ways as we introduce new audiences to poker in these live tournaments."

PokerStars is awaiting approval from the Division of Gaming Enforcement and the state's Casino Control Commission.  If it goes through, it could represent the first time a gaming website has transformed into owning and operating a hotel and casino.

Copyright 2013 ABC News Radio

Tuesday
Aug212012

Casino Suing Gamblers Who Won $1.5 Million, Blames Unshuffled Decks of Cards

Digital Vision/Thinkstock(ATLANTIC CITY, N.J.) -- A New Jersey casino has sued a group of gamblers who won $1.5 million after they allegedly realized the eight decks of cards used in a game of mini baccarat were not pre-shuffled.

The Golden Nugget in Atlantic City, N.J., filed suit against the gamblers and playing card company Gemaco after 14 players collectively won $1,536,700 in 41 winning hands.

As the same sequence of cards kept appearing April 30, the players increased their bets from $10 to $5,000, the casino alleged.

"The gamblers unlawfully took advantage of the Golden Nugget when they caught onto the pattern and ... by passing money to fellow gamblers in order to place bets in excess of posted betting limits," the casino said in a statement.

In a lawsuit filed in New Jersey Superior Court, the casino cited gambling regulations that state gaming odds must be fair for both sides.

The Golden Nugget is seeking a return of the $558,900 it paid out to several of the players and the nearly $1 million worth of chips.

Benjamin Dash, attorney for the gamblers, said his clients, who did not know each other, were "playing the game lawfully."

After paying out a portion of the winnings, the casino managers became suspicious. Convinced they were watching a "sophisticated swindling and cheating scheme," they refused to cash in the remaining $1 million in chips.

No evidence of a scheme was found. On May 1, the Golden Nugget said it learned by "direct admission" from Gemaco's CEO that the decks used in the baccarat game were not shuffled, despite being touted as pre-shuffled, certified decks.

ABC News was unable to reach Gemaco for comment.

Three of the gamblers filed a countersuit against the casino, alleging they were discriminated against because of their Chinese heritage.

"All of the players were Asian [and] none of their chips were honored," Dash said. "In New Jersey, a chip is evidence of a debt."

After the win, Dash said, one of his clients was assaulted when he answered the door of his hotel room.

The man was pinned against a wall and his belongings were searched, Dash said. He was then held in a room without access to food, water or an interpreter, according to allegations in the countersuit, which identifies no particular assailant.

The Golden Nugget called the claims "completely false."

"[We] would never discriminate against anyone, including the Asian community," the casino said in a statement. "In fact, the Golden Nugget designed and built an Asian gaming area and restaurant to specifically attract Asian guests to the casino."

The case will be heard Aug. 31.

Copyright 2012 ABC News Radio

Tuesday
Mar272012

2011 Was Worst Year for Suspected Financial Crimes on Record

iStockphoto/Thinkstock(WASHINGTON) -- A tidal wave of fraud reports fed by an ingenious array of scams borne out of the mortgage crisis have swamped federal offices, which are investigating and prosecuting only a small percentage of the allegations.

In 2011, suspected instances of money laundering, consumer loan fraud, debit card fraud, mortgage loan fraud, casino fraud and other scams hit all-time highs, according to suspicious activity reports known as SARs submitted to the Treasury Department's Financial Crime Enforcement Network (FinCEN).

The SAR numbers have been fluctuating between 1.2 million and 1.3 million totals since 2007, but in 2011 they jumped up to more than 1.5 million.

"The financial meltdown that took place from 2007 to 2009 uncovered all the skeletons, what was taking place in the marketplace, from mortgage financing to Ponzi schemes," said Curt Novy, a mortgage and real estate analyst based in San Diego, Calif.

While providing a fertile ground for criminals, the financial crisis also lured those who might not have ever thought to commit a crime, according to Harry Cendrowski, a fraud and forensics consultant based in Chicago.  He said having a respected person with a financial portfolio suddenly faced with financial ruin creates a "perfect storm."

Between 2007 and 2011 there was a 74 percent increase in fraud cases where people working within a financial institution exploited internal controls for their own gain, according to a study by KPMG.

"I don't hesitate to tie this into the economy," said Tim Gallagher, chief of the financial crimes section of the FBI.  "There has been a lag time from the meltdown to now."

Gallagher attributed the steep increase in money laundering and mortgage loan fraud specifically to hucksters who scammed distressed homeowners.  Mortgage loan fraud has had the most dramatic surge over the past decade, going from 9,539 in 2001 to 93,564 in 2011, according to FinCEN figures.

As the fraud peaked in 2011, however, the FBI scaled back its fraud investigations, with just 2,691 cases -- or three percent -- of the more than 90,000 suspected mortgage loan fraud cases "under investigation," according to the FBI.

"About 70 percent of our cases are more than a million dollars.  We are going after big fish as far as putting cases together, and we're going after people on the inside because of fiduciary responsibility and the element of trust that they're violating and doing the most damage," Gallagher said.

The small number of federal investigations is somewhat bolstered by state and local authorities, who can also investigate and prosecute the crimes.

Copyright 2012 ABC News Radio

Thursday
Jun022011

New Chicago Mayor Bets on State-Owned Casinos

Scott Olson/Getty Images(CHICAGO) -- Visitors to Chicago may soon do a double-take upon landing at either of the city's major airports when they see gamblers working one-armed bandits. They may also see a glittering new casino nestled among the city's iconic skyscrapers when they arrive downtown if new Mayor Rahm Emanuel has his way.

Emanuel and state legislators -- faced with crippling budget deficits -- want Chicago to become the first big city in America to own a casino and control thousands of slot and video poker machines. The Illinois legislature has already approved such a plan, allowing five casinos in Chicago, its suburbs, and downstate cities, but Gov. Pat Quinn is holding the veto card and he's worried about turning Chicago into Las Vegas of the Midwest.

Illinois voters, Quinn says, do not favor "excessive gambling," but he has not publicly said whether he will veto the plan.

Chicago's new mayor, like his predecessor, sees a city-owned casino generating hundreds of millions of dollars in revenue each year -- money that could be used to help fill a nearly billion-dollar deficit. Potential developers are already eying possible sites downtown, including the once grand Congress Hotel on Michigan Avenue, the gleaming new Trump tower in the River North neighborhood, and Northerly Island -- a spit of land off Chicago's lakefront that once served as a small airport.

"A Chicago casino will spur local economic growth and provide jobs to Chicagoans," Emanuel says.

But opponents fear a casino will divert revenue away from local venues and the city's strong convention business. Doug Dobmeyer, long active in Chicago civic affairs, wonders, "If you lose your money at a casino, are you going to go to a restaurant, are you going to go to the opera, are you going to see the Cubs or the Bulls? The answer is no."

Many Chicago-area politicians are betting that Gov. Quinn will approve at least part of the deal. After all, Illinois is broke -- it's struggling with a nearly $13 billion-dollar deficit and is unable to pay many of its bills. That reality alone may be enough to drive the politics that could make Chicago the biggest gambling mecca between Las Vegas and Atlantic City.

Copyright 2011 ABC News Radio

Tuesday
Mar222011

Deadbeat Gamblers Stiff Casinos

BananaStock/Thinkstock(NEW YORK) -- Two years ago, gambler Jerome Powers lost $1.2 million playing blackjack at Mohegan Sun, a Connecticut casino owned by the Pequot Indians. The money he lost was in the form of a marker -- a credit extended by the casino, according to court papers.

Though Powers wrote a series of checks that same night to cover the amount, none were honored by his bank. He later stopped payment on them, the documents state. The Pequots, understandably, were peeved. Though they have used Connecticut's courts to try to get their money back, Powers has resisted their efforts, advancing a variety of arguments in legal papers as to why he shouldn't have to repay.

First, he said he'd welshed on principal, claiming in court papers that the marker given him amounted to an illegal contract, since the State of Connecticut forbids both the extension of credit for gambling and gambling itself. He further argued that the State of Connecticut had no legal authority in the case, since the Pequots' reservation, like other Indian reservations, enjoys the status of a sovereign nation. A judge in New London rejected these views and in January ruled that the Pequots could attach Powers' assets to the tune of $1.2 million. Powers has appealed the ruling.

At no time has he asserted that he can't pay. In fact, he seems, by every outward appearance, to be swimming in dough.

According to a November story in the Miami Herald, Powers in late 2007 sold a magazine he had founded. Purchase price: $33 million. Earlier that same year he told the New York Post he had entered into a multi-year $20 million magazine deal with Donald Trump.

Whatever the reason for Powers' refusal to pay the Pequots, he is only one of a growing number of gamblers resorting to inventive legal means to repudiate their debts.

A gambler at an Indiana casino owing $125,000 asserted that though the casino knew she had a gambling problem, it seduced her back to the tables by offering her free food, free lodging and free limo rides. When the casino sued to collect, she countersued. The case has yet to be resolved.

No one knows for sure how big a problem welshing has become for the gaming industry nationwide. The American Gaming Association doesn't keep statistics on it. Nor does the biggest state gaming control board in the country, Nevada's. "I don't think there's been a material change," says Frank Streshley, chief of the board's tax license division. "The casinos obviously have very strict credit policies. They've tightened up their standards as the economy has weakened."

That's not the view shared by Professor I. Nelson Rose, a leading expert on gambling law, author, consultant and frequent expert witness and for governments and industry. Look at Atlantic City's casinos, says Rose. These, unlike their Nevada cousins, publicly report revenue and bad debt per casino. While almost all reported a decrease in revenue for 2009 and 2010, bad debts at many were up.

Copyright 2011 ABC News Radio 

Tuesday
Jan182011

Deutsche Bank Gambles on Vegas' Newest Hotel and Casino

Photo Courtesy - Getty Images(LAS VEGAS) -- The hottest party in Las Vegas this New Year's Eve was not at any of the monster casinos people know so well. In fact, it had nothing to do with magicians or show girls.

Instead, Jay-Z and Coldplay headlined a concert that included performances by Beyonce, John Mayer, and Kanye West at a hotel start-up on Vegas' Strip. The property had no history and no customer base, and many thought it had no chance of ever opening. But against all odds, The Cosmopolitan is the talk of Sin City these days, for reasons that go far beyond its curious ad campaign, which includes a bellboy with no pants.

"My mom called me and she said, 'I saw that commercial and I don't know what it meant, but I kind of liked it,'" said John Unwin, the CEO of The Cosmopolitan. "We've had good response...it's got a pants-less bellboy and it's got puppies."

Unwin is the leading man in a story that symbolizes America's boom-and-bust era like few others.

Six years ago a developer named Ian Bruce Eichner had plans for a $3.9 billion monstrosity with 28-foot-robots playing guitars and a tower of expensive condos. But when he defaulted on his loans, Deutsche Bank became the sudden owners of the unfinished hotel-casino, and the first bank to own a hotel on the Vegas Strip.

After finding no buyers, the German bank bought out The Cosmopolitan itself for $4 billion. It lured Unwin away from Caesar's Palace, where he was working as the general manager, and finished the place with an entirely new concept.

Vegas is still limping back from a horrible slump, with too many rooms and not enough guests. If The Cosmopolitan somehow manages to draw more gamblers than its bigger neighbor, the Bellagio, it would take 15 years for Deutsche Bank to break even.

Architect David Rockwell had to take a relatively small nine-acre space and build upwards to design the lavish Cosmopolitan. His best known work includes the home of the Academy Awards, the ultra-hip Nobu restaurants and even experimental playgrounds. But he had never designed a casino until now. Now the hotel is one of the most posh places in Vegas, with a lobby that seems to be more like a post-modern art gallery than just a place to check in. 

Copyright 2011 ABC News Radio

Monday
Dec062010

Legal Internet Poker Could Give US Casinos Share of $25 Billion Pie

Photo Courtesy - Getty Images(WASHINGTON) -- More than 2,000 websites currently offer users the chance to wager real cash in games of skill and chance, including poker, according to the American Gaming Association. But most of them are run by offshore companies, industry experts say. Now some lawmakers want to allow U.S.-based casino companies to get into the game -- and a cut of the $25 billion-a-year pie -- by quietly pushing for a change in the law before the end of this year.

A draft bill, first reported by the Wall Street Journal and obtained by ABC News, would legalize online poker playing in the U.S., and establish licensing and reporting requirements for companies, as well as safeguards for consumers. It would also generate tax revenue from wagers, for state and federal governments. Forms of online gambling other than poker would remain prohibited under the bill.

Legalization of online poker forums has long been sought by the U.S. casino industry which says federal gaming regulations have unfairly handicapped their business in a flourishing online marketplace and left American consumers vulnerable.

The Unlawful Internet Gambling Enforcement Act of 2006 indirectly outlawed online gambling in the U.S. by making it illegal to use a credit card or checking account to place electronic bets. But the industry has repeatedly lobbied Congress to clarify the rules and loosen restrictions on some forms of online gaming, including poker.

Copyright 2010 ABC News Radio

Saturday
Nov202010

Vegas Billionaire Pummeled by Recession Claws His Way Back

Photo Courtesy - Getty Images(LAS VEGAS) -- Las Vegas is a place where many bet high but few come out on top ... and then there's Sheldon Adelson, who proves that old Vegas saying, "The house always wins." The self-made billionaire behind the Las Vegas Sands Corporation likes things big, including his checkbook.

Before the economy fell apart two years ago, Adelson's company was making an estimated $20 million per day from his hotels and casinos in Las Vegas and Macau. By 2007, he was worth an estimated $40 billion and was No. 3 on the Forbes list of richest Americans.

But when the market crashed in 2008, his company's market value plummeted more than 90 percent, at one point losing as much as $1,000 per second. To prevent the company from going under, Adelson and his family invested $1 billion into the Las Vegas Sands Corporation. That $1 billion bailed out the cash-strapped company, but much of the senior management was fired.

Even in the depth of the financial crisis, Adelson never backed off from a planned multi-billion-dollar project in Singapore. The Marina Bay Sands Hotel is now open and in its first full quarter of operations, it generated $242 million in profits. His Las Vegas properties, unlike many on the strip, are thriving as well. For the third quarter of this year, they booked record profits of $645 million.

Adelson isn't quite back to his 2007 heyday, but he's working on it: He dropped to No. 26 on the Forbes list in 2009 and now stands at No. 13.

Copyright 2010 ABC News Radio







ABC News Radio