golden presentation
DESCRIPTION
Kansas Racing & Gaming CommissionCasino Proposalhttp://krgc.ks.gov/TRANSCRIPT
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Lottery Facility Gaming Review Board Presentation
August 14, 2008
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GOLDEN HEARTLAND – OUR SITE
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GOLDEN HEARTLAND – RIGHT LOCATION
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GOLDEN HEARTLAND – RIGHT SIZEOver 240 acres secured.
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GOLDEN HEARTLAND - DESIGNby Friedmutter
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GOLDEN HEARTLAND - DESIGNby Friedmutter
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GOLDEN HEARTLAND - DESIGNby Friedmutter
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by FriedmutterGOLDEN HEARTLAND - DESIGN
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by FriedmutterGOLDEN HEARTLAND - DESIGN
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by FriedmutterGOLDEN HEARTLAND - DESIGN
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GOLDEN HEARTLAND – RIGHT SIZE FACILITY
Phase I
Casino 131,804 sf
Hotel 272,000 sf
Banquet Space 25,000 sf
Restaurants 55,395 sf
Bars 24,852 sf
Support/BOH 117,214 sf
Misc 20,425 sf
Phase I Total: 646,690 sf
Phase II
Residential Lofts 293,689 sf
Bowling 61,468 sf
Other Retail 167,527 sf
Restaurants 52,622 sf
Phase II Total: 734,998 sf
by Friedmutter
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Tom Watson DesignGOLDEN HEARTLAND – CHAMPIONSHIP GOLF COURSE
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Golf Revenue Year 1 Year 2 Year 3 Year 4 Year 5
Greens fees $ 1,732,500 $ 1,784,475 $ 1,838,009 $ 1,893,150 $ 1,949,944
Pro Shop $ 337,500 $ 347,625 $ 358,054 $ 368,795 $ 379,859
Locker Rentals $ 100,000 $ 103,000 $ 106,090 $ 109,273 $ 112,551
Initiation Fee (Members) $ 1,687,500 $ 168,750 $ 168,750 $ 168,750 $ 168,750
Total $ 3,857,500 $ 2,403,850 $ 2,470,903 $ 2,539,968 $ 2,611,104
Average # of spectators at a PGA event 150,000 – 200,000Average # of spectators at a “Champions” PGA event 75,000 - 150,000Average # of rounds of golf / year* 33,750 Average green fees at our facility $ 70
*based on 25 golf days per month for 9 months
Tom Watson DesignGOLDEN HEARTLAND – CHAMPIONSHIP GOLF COURSE
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GOLDEN HEARTLAND - SITE PLANExpansion Opportunities
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GOLDEN HEARTLAND – SITE PLANConvenient and Accessible
GARAGE
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Slot and Video PokerDenom % of Floor # of Games
1 Cent 54.00% 13505 Cent 5.00% 12510 Cent 0.64% 1625 Cent 27.00% 67550 Cent 1.60% 40
$1 10.00% 250$2 0.32% 8$5 1.00% 25$10 0.20% 5$25 0.16% 4$100 0.08% 2
Total 2,500
Table Games # of Games
Blackjack 53
Craps 5
Roulette 4
Baccarat 3
Pai Gow 4
Texas Hold’em 3
Three/Four Card Poker
4
Let it Ride 2
Flop Poker 2
Poker Room Tables 18
Total 98
Proposed Game Mix
GOLDEN HEARTLAND – RIGHT SIZE CASINO
Christiansen Capital Advisors indicated the casino market could optimally support 2,786 gaming machines in Wyandotte County.
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What is the RIGHT SIZE for the Market?GOLDEN HEARTLAND – MARKET OVERVIEW
Casinos Population* # slots # tablesGaming Floor sq ft
Convention Space
Hotel Rooms
KC Missouri Casinos
Ameristar Casino Hotel - KC 2,500,000 3,015 105 140,000 14,520 184
Argosy Riverside Casino 2,500,000 1,924 47 62,000 18,000 258
Harrah's North KC Casino 2,500,000 1,793 72 60,133 10,000 392
Isle of Capri - KC 2,500,000 1,525 32 40,000 - -
Wyandotte Proposed Casinos
Golden Heartland 2,500,000 2,500 98 132,000 25,000 300
Hard Rock / Speedway 2,500,000 3,000 100 171,650 77,000 300
Legends Sun 2,500,000 2,000 85 115,000 35,000 350
Pinnacle 2,500,000 2,300 85 100,000 100,000 500
*Based on total population within 100 miles.
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GOLDEN HEARTLAND – RIGHT TEAMManagement Experience
Blake L. Sartini Chairman / President / Chief Executive Officer
• Over 28 years of experience in the hotel, casino and gaming industry
Rod S. Atamian Executive Vice President / Secretary & Treasurer
• Over 15 years of gaming management experience in hotels and casinos with a focus in finance
Steve A. Arcana Chief Operating Officer
• Over 23 years of experience in hotels and casinos with a focus including 8 years of gaming management
Matthew W. Flandermeyer Vice President / Chief Financial Officer
• Over 17 years of experience in food and beverage industry
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Christopher Abraham Vice President of Marketing
• Over 18 years of experience in the hotel casino industry with 13 years of gaming management experience
Sheila Pankas Director of Compliance & Community Relations
• Over 13 years of gaming experience in the gaming regulatory industry.
Amy Sances Corporate Counsel & Director of Business Development
• Over 11 years of legal experience in litigation, governmental relations, gaming and transactional matters
Management ExperienceGOLDEN HEARTLAND – RIGHT TEAM
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Golden Heartland
MARKETING PLAN
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Regional and Outer Market
Advertising and Promotion
Player DevelopmentRegional Offices / Junkets
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Regional Advertising/Promotion
Target Cities
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Regional Advertising / Promotion
Create awareness in markets pre-disposed to gaming by conducting aggressive pre-opening and continuing regional marketing campaigns
Main Focus PointsTom Watson Signature Golf Course4-Star Resort & SpaDining ExperiencesEntertainment KCK Destination Retail Amenities
Regional PeriodicalsUSA Today, Sports Illustrated, Golf Digest, People
Billboards – Proximity to thoroughfares and airports
Television – Travel and leisure
Website – Comprehensive on-line and e-marketing campaign
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Regional Advertising / Promotion
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Player Development
Strategically position and operate regional offices in major feeder cities for player development fulfillment
Identify players that currently frequent Las Vegas and other regional gaming markets
Increase visits from existing players
The combination of airports, special events, retail, sporting events, entertainment and championship golf creates the exact formula necessary to ensure that our Branch and Independent Junket offices operate successfully
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Player Development
Branch Office Locations
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Golden Heartland
LOCAL MARKET
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Local Market
Direct MarketingLoyalty ProgramsLocal Business AlliancesAdvertisingPromotion
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Local and Direct Marketing
Utilize management experience in KC market to maximize revenue opportunities from loyal Kansas City, MO gamers
Concentrate investment on new and infrequent guests to solidify their loyalty
Provide superior loyalty program (i.e. player’s club) creating an incentive for gamers to choose Kansas and Golden Heartland over competing Missouri casinos
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Local and Direct Marketing
The size of a company’s national database does not dictate success or market dominance
Market dominance is created by the right product, service, marketing and loyalty programs offering the very best guest experience on a consistent basis
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Direct Mail
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Local Market Promotions & Advertising
Partner with local Kansas-based businesses to conduct programs and promotions creating a “sense of community” among locals in KCK
Neighborhood PartnersPoints for Services
GasRetail ShoppingAutoDepartment Stores
Create large-scale retail promotions to generate buzz, excitement and public relations opportunities that drive additional trips and entertainment spending from Missouri gamers
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Projected volumes of tourism
1.6 million local visitors + 2.2 million visitors outside Wyandotte County = 3.9 million visitors in 2011.
Over 400,000 visitors from over 100 miles away in the first year and increasing to over 485,000 by 2014.
4.6 million visitors in 2014 with the introduction of Phase II.
GOLDEN HEARTLAND - VISITORS
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GOLDEN HEARTLAND – TOURIST SPENDING
2011
Visitation Driver100+ Mile Visitors
Average Spend per Visitor per
Day
Average # of
Days
Total 100+Mile Visitor
Spending
Total Average
Spend Per Visitor
Casino 328,790 $ 110 1.50 $54,250,283 $ 165
Hotel 67,485 $ 115 2.25 $17,461,680 $ 259
Golf 5,648 $ 310 1.50 $ 2,626,088 $ 465
TOTAL 401,922 $ 114 - $74,338,051 $ 185
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GOLDEN HEARTLAND – PROJECTED REVENUE
Year 1 Year 2 Year 3
Slot Revenue $ 186,150,000 $ 209,875,000 $ 225,387,500
Table Game Revenue $ 46,720,000 $ 49,640,000 $ 52,560,000
Poker Revenue $ 6,405,750 $ 6,570,000 $ 6,734,250
Total Gaming Revenue $ 239,275,750 $ 266,085,000 $ 284,681,750
Other Revenue $ 49,552,124 $ 52,892,143 $ 55,005,502
Total Facility Revenue $ 288,827,874 $ 318,977,143 $ 339,687,252
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GOLDEN HEARTLAND – SUMMARY OF TAX STRUCTURE
Revenue ThresholdsPercentage to
the State
$0 - 250 million 22%
over $250 - 300 million 23%
over $300 - 350 million 24%
over $350 - 400 million 25%
over $400 - 450 million 26%
over $450 - 500 million 27%
over $500 million 28%
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GOLDEN HEARTLAND – STATE REVENUE Based on lottery contract tax structure for each proposed facility
$50
$70
$90
$110
$130
$150
$170
1 2 3 4 5
LegendsPNKSpeedwayGolden
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Total value of the lottery contractsGOLDEN HEARTLAND
$59.50
$69.50
$79.50
$89.50
$99.50
$109.50
$119.50
$129.50
$139.50
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Fees
(Millio
ns o
f Dol
lars
)
Golden
PNK
Legends
Speedway
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1152
1327
1511
1178
1378
1581
1000
1100
1200
1300
1400
1500
1600
1700
Projected + 15% +30%Christiansen Capital Projections
Tax
Dol
lars
(in
Mill
ions
)
AverageCompetitorGolden
GOLDEN HEARTLAND – STATE REVENUE Incremental Tax Dollars to State over 15 yr Contract under Golden Structure
$26 MM
$51 MM
$70 MM
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GOLDEN HEARTLAND – LOCAL IMPACT
Golden Heartland will employ 1,850 team members (FTE’s).
In aggregate, over 11,000 jobs will be created during the construction phase and over 8,000 during the operational phase.
Total economic output from construction is $1.4 billion and $578 million from the operational phase.
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GOLDEN HEARTLAND – LOCAL IMPACT
Benefit ItemState of Kansas Edwardsville
Bonner Springs
Unified Government Total
Casino Revenue Sharing $66,484,020 $ 2,077,626 $ 193,219 $ 6,039,658 $ 74,794,523
Property Taxes $ 207,173 $ 6,985,219 $11,532,371 $19,278,023 $ 38,002,786
Sales and Use Taxes $ 4,691,904 $ 337,258 $ 959,013 $ 1,991,846 $ 7,980,021
Other Taxes $25,000,000 $ 191,033 $ 77,660 $ 1,313,477 $ 26,582,170
TOTAL $96,383,097 $ 9,591,136 $12,762,263 $28,623,004 $147,359,500
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Use Resort & Casino Golf Course Total
Build-out $ 445,545,064 $ 17,717,233 $ 463,262,297
FFE 25,298,136 - $ 25,298,136
Land 13,500,000 10,000,000 $ 23,500,000
Equipment 87,838,170 - $ 87,838,170
Preopening Cost 7,000,000 - $ 7,000,000
Financial/Taxes/Legal 2,000,000 1,000,000 $ 3,000,000
Contingency 26,608,456 1,122,987 $ 27,731,443
Capitalized Interest 22,000,000 2,000,000 $ 24,000,000
TOTAL $ 629,789,826 $ 31,840,220 $ 661,630,046
GOLDEN HEARTLAND – PROPOSED INVESTMENT
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GOLDEN HEARTLAND – CONSTRUCTION TIMELINE
2008 Sep - Selection of Lottery Gaming Facility Manager
2009 Feb - Golf Course final design
Mar - Hotel foundation begins
Jun - Casino foundation complete
Nov - Clubhouse construction complete
2010 Jan - Roadway construction complete
Mar - Casino façade complete
Jun - Garage complete
Oct - Hotel interior complete
Dec - Hotel complete; Golf Course complete
2011 Jan - Casino interiors complete; Landscape complete
Feb - Golden Casino Grand Opening
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EQUITY
1. Imbedded project equity – excess land value
2. Equity from affiliates – Golden Gaming, Inc. and Golden Mardi Gras, Inc.
3. Private equity partner in the project
4. Retail / residential development partner
5. Equity from Stockholder
GOLDEN HEARTLAND – SOURCES OF FUNDING
DEBT
1. Project specific bank/bond financings
2. Bank/bond financing through affiliates
3. Loans from Stockholders
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Other Considerations
None of the project infrastructure will be derived from or financed by state or local retailers’ sales tax revenues or tax increment financings.
None of the land secured for any component of the project will be acquired through eminent domain.
GOLDEN HEARTLAND – FINANCING
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GOLDEN HEARTLAND - COMPLIANCEA Responsible Manager
Operating in the gaming industry is a privilege, not a right!
Compliance Plan
Plan contains policies to address the companies commitment to adherence to all laws, not just gaming laws
Plan incorporates training of all employees on regulatory requirements specific to their position
Compliance Committee
Committee members include independent gaming professionals, corporate executives and facility team members
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School Districts
Police/Fire
Local Hospital
GOLDEN HEARTLAND – LOCAL COMMITMENT
Golden Heartland is committed to the community!
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GOLDEN HEARTLAND – THE RIGHT CHOICE•• RIGHT LOCATIONRIGHT LOCATION
- Unmatched site (over 240 acres)- Opportunity for future expansion
•• RIGHT SIZERIGHT SIZE- World-class facility- Top quality amenities
•• RIGHT TEAMRIGHT TEAM- Experienced operator delivering realistic promises- Tom Watson designed championship golf course- Friedmutter designed resort
•• MOST REVENUEMOST REVENUE- Most tax revenue to state of Kansas and municipalities
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5555