leg sun lottery review board rebutal-final final
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Kansas Racing & Gaming CommissionCasino Proposalhttp://krgc.ks.gov/TRANSCRIPT
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A Kansas Legend In The Making
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What is Best for Kansas
Best Plan
x Ability to Execute =
Greatest Success for the State of Kansas and Wyandotte County
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Criteria for Determining the Best Plan
Exciting Destination Program
Superior Location
Attainable Operating Projections
Realistic Capital Structure
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Criteria for Determining The Applicant’s Ability to Execute
Proven Destination-Gaming Track Record as a Licensed Owner and Operator
History of Relationships in Kansas
Current Capacity
Current Operations
Human Capital Bench-Strength
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Legends Sun Is The Answer.
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Consultants Reports
Prof. William Eadington’s presentation hits the points we believe are essential
Others based projections primarily on number of slots, and did not take into account the ability to execute, and therefore could not offer guidance
Applicants have each presented different information they have “vetted”
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Gaming Market Advisors Update
Company principals have been known to gaming industry for over 20 years
Completed over 200 casino feasibility studies
Completed 5 separate studies in Greater Kansas City markets
Updated assumptions for feasibility study
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Anything less is underachieving;
anything substantially more is unrealistic.
Gaming Revenues are Achievable Given Optimum Conditions:
Gaming Consultant’s Independent Highest First Full Year Projections for a Wyandotte County Casino
CCA
$271.2 million
Cummings
$271.6 million
GMA
$272.4 millionWells
$299.0 million
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Only the Best Facility and Best Operator Can Deliver on Those Projections:
“…anyone can build you a bigger mouse trap…who will build you the best mouse trap? Cummings Associates
“…the ability to drive tourism will require incorporating a ‘WOW!’ factor into the property” Probe Strategic Solutions
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Our Newest “WOW”
Destination Addition
Casino of the Wind
at Mohegan Sun Opened August 29th
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Legends Sun Management Has the Most Experience Delivering “WOW”
Compared to the other applicants
Compared to the competition where we currently operate
Our track-record for delivering what is promised
These factors weigh heavily in Prof. Eadington’s “probability for success.”
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Gaming Experience of ApplicantsBelow is a breakdown comparison of the Northeast Zone applicants’
largest properties in which they are the licensed owner-operator (as of August 2008):
Please note that the Las Vegas Hard Rock Hotel and Casino is excluded from Golden Gaming’s portfolio for purposes of this analysis because the management agreement was terminated on February 29th, 2008. Source: Morgans
Hotel Group 10-Q (August 8th, 2008). All statistics from public sources.
Mohegan Sun - Connecticut
Pinnacle - Lumiere
PlacePinnacle - L'Auberge
Cordish - Indiana Live
Golden Gaming -
Mardi Gras# of Slots 6,800 2,000 1,645 1,887 725 # of Tables 346 49 62 0 9Hotel Rooms 1,172 295 1,000 0 0
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$-$200,000,000$400,000,000$600,000,000$800,000,000
$1,000,000,000$1,200,000,000$1,400,000,000
Mohegan Sun -Connecticut
Pinnacle -Lumiere Place
Pinnacle -L'Auberge
Cordish -Indiana Live
Golden Gaming- Mardi Gras
Annual Gaming Revenue as of August 2008Best Performing Property as Licensed Owner/Operator
$324m
$41m$166m$160m
$1.3 Billion
Lumiere
Place’s annual gaming revenue is based on the first 6 full months of operation (Jan-Jun 2008.)
Indiana Live’s
annual gaming revenue is based on July 2008’s revenue.
Golden Gaming Mardi Gras’
annual gaming revenue is based on the Colorado Black Hawk region’s WPU for FY ended June 2008.
Gaming Experience Compared to Applicants
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How We Compare to Our Competition in Connecticut and Pennsylvania
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The Best Slot Efficiency on the East CoastOperator: Handle: Win: Units:
Fair Share:
Actual Win Share:
Slot Win Efficiency: Rank:
Mohegan Sun 12,161,159,703$ 1,045,768,835$ 7,366 6.94% 10.79% 155.53% 1 Philadelphia Park 4,320,701,669$ 370,333,906$ 2,621 2.47% 3.82% 154.76% 2 Borgata 5,763,780,342$ 432,312,208$ 3,985 3.75% 4.46% 118.85% 3 Harrah's 20,875,660,189$ 1,897,734,215$ 18,279 17.22% 19.59% 113.72% 4 Foxwoods 9,087,275,723$ 757,740,900$ 7,322 6.90% 7.82% 113.36% 5 Magna 3,285,209,290$ 273,552,870$ 2,650 2.50% 2.82% 113.07% 6 Trump 6,082,171,544$ 504,590,001$ 5,528 5.21% 5.21% 100.00% 7 Twin River 1,928,534,061$ 408,846,027$ 4,628 4.36% 4.22% 96.78% 8 Trump Marina 2,003,134,442$ 171,012,599$ 1,957 1.84% 1.77% 95.73% 9 Yonkers/Empire City 5,770,901,422$ 470,176,372$ 5,396 5.08% 4.85% 95.45% 10 Isle 1,618,979,595$ 126,573,939$ 1,500 1.41% 1.31% 92.45% 11 Delaware Park 3,587,364,300$ 265,223,600$ 3,146 2.96% 2.74% 92.34% 12 Dover Downs 2,872,530,000$ 218,683,800$ 2,703 2.55% 2.26% 88.61% 13 Penn National 6,393,541,255$ 605,991,539$ 7,528 7.09% 6.25% 88.18% 14 Resorts 4,584,116,246$ 390,102,194$ 4,923 4.64% 4.03% 86.80% 15 Tropicana 3,030,572,230$ 268,657,495$ 3,535 3.33% 2.77% 83.26% 16 MTR Gaming 4,370,271,010$ 394,127,600$ 5,188 4.89% 4.07% 83.21% 17 Delaware North 5,033,065,818$ 440,564,519$ 6,015 5.67% 4.55% 80.23% 18 Harrington Raceway 1,493,781,300$ 124,099,600$ 1,698 1.60% 1.28% 80.06% 19 Newport Grand 252,699,696$ 70,599,171$ 1,099 1.04% 0.73% 70.40% 20
*Harrah’s includes 5 properties in Atlantic City and Pennsylvania
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Mohegan Sun Foxwoods
Connecticut Slot Market ComparisonLast Twelve Months Ended June 30, 2008
45.7%
54.3%
30%
35%
40%
45%
50%
55%
60%Slot Units
6,083 Units
7,240 Units
53.8%
46.2%
30%
35%
40%
45%
50%
55%
60%Slot Win
$ 884 M
$ 760 M
85.1%
117.8%
30%
40%
50%
60%
70%
80%
90%
100%
110%
120%
130%Slot Efficiency
Compared to Competition in Connecticut
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MSPD Mt Airy
Northeastern PA Slot Market ComparisonLast Eight Months Ended June 30, 2008
32.3%
67.7%
30%
40%
50%
60%
70%
80%
90%
100%
Slot Units
2,523 Units
49.8% 50.2%
30%
35%
40%
45%
50%
55%
60%
Slot Win
$ 105 m $ 106 m
74.2%
154.2%
30%
50%
70%
90%
110%
130%
150%
170%
Slot Efficiency
1,203 Units
Compared to Competition in Pennsylvania
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The Right Operator Makes All the Difference!
Mohegan is able to dominate through:Commitment to the development of our employees in the pursuit of Outstanding Customer ServiceThe Best Gaming and Non-Gaming ProductStrong use of Technology and Customer Relationship Management (CRM) SystemsSuperior Player Reward ProgramsCreative, Energizing Casino Marketing, Promotions and Advertising Campaigns
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How Other Northeast Zone Applicants Compete in Their Markets
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Other Applicants in Their MarketsBelow is a slot efficiency ranking for all gaming properties in the State of Indiana
for the month of July 2008 –
which was the first full month of operation for Indiana Live.
# of Slot Machines: Slot Win: Slot WPU:
Fair Share Slot Win %:
Actual Slot Win Share %:
Slot Win Efficiency %:
Slot Win Efficiency %
Rank:Ameristar 1,797 24,240,050 435 7.85% 11.89% 151.35% 1Horseshoe SI 1,878 23,728,979 408 8.21% 11.64% 141.77% 2Argosy 2,529 31,720,708 405 11.05% 15.55% 140.73% 3Casino Aztar 1,068 9,195,289 278 4.67% 4.51% 96.60% 4Hoosier Park 1,979 16,974,911 277 8.65% 8.32% 96.24% 5Blue Chip 1,934 14,593,710 243 8.45% 7.16% 84.67% 6Belterra (Pinnacle) 1,692 12,518,678 239 7.39% 6.14% 83.02% 7Indiana Live (Cordish) 1,887 13,813,058 236 8.25% 6.77% 82.13% 8French Lick 1,049 7,657,581 235 4.58% 3.75% 81.91% 9Horseshoe HD 3,176 22,896,934 233 13.88% 11.23% 80.89% 10Grand Victoria 1,393 9,848,842 228 6.09% 4.83% 79.33% 11Majestic Star 1,209 8,292,548 221 5.28% 4.07% 76.96% 12Majestic Star II 1,291 8,452,488 211 5.64% 4.14% 73.46% 13Total 22,882 203,933,776 287 100.00% 100.00% 100.00%
Source: Indiana Gaming Commission
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Other Applicants in Their markets (cont.)Below is a slot efficiency ranking for the State of
Missouri in the month of May 2008.
Source: Missouri Gaming Commission
May was used due to the flooding of two properties in June/July.
# of Slot Machines: Slot Win: Slot WPU:
Fair Share Slot Win %:
Actual Slot Win Share %:
Slot Win Efficiency %:
Slot Win Efficiency %
Rank:Harrahs N. Kansas City 1,768 15,213,754 278 9.10% 11.06% 121.56% 1Harrahs Maryland HGTS 2,825 23,819,901 272 14.54% 17.32% 119.11% 2St. Charles 2,998 24,835,817 267 15.43% 18.06% 117.02% 3Argosy Riverside 1,980 15,220,066 248 10.19% 11.07% 108.59% 4Isle of Capri - Boonville 949 6,790,299 231 4.88% 4.94% 101.08% 5Ameristar KC 3,018 21,037,642 225 15.53% 15.29% 98.47% 6Lumiere Place (Pinnacle) 2,000 13,058,958 211 10.29% 9.49% 92.24% 7St. Jo Frontier 556 3,093,109 179 2.86% 2.25% 78.59% 8Isle of Capri - KC 1,328 6,468,577 157 6.83% 4.70% 68.81% 9Mark Twain 665 2,888,110 140 3.42% 2.10% 61.35% 10Isle of Capri - Lady Luck 614 2,448,514 129 3.16% 1.78% 56.33% 11President (Pinnacle) 729 2,672,303 118 3.75% 1.94% 51.78% 12Total 19,430 137,547,049 228 100.00% 100.00% 100.00%
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History of Relationships in Kansas
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A History of Relationships in Kansas
Local Partner…Local Commitment
Involved in several local charities such as the Children’s Therapeutic Learning Center Duck Derby, the American Cancer Society, and Boys & Girls Clubs
Legends Sun will continue this relationship, exemplified by RED’sTitle sponsorship of The Legends Reno Tahoe Open, which has given over $1.7 million to local charities
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Clarification of Additional Issues from Consulting Reports
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Sources of Project FinancingCasino Resort &
GolfRetail &
ResidentialConstruction Phase - 1(A)
Construction
Phase - 1(B)* Total Project
Cash Infusion by Mohegan Resorts-Kansas, LLC 168,227$ 30,107$ 198,333$ Cash Infusion by RED Leg Sun, LLC 84,113 15,053 99,167 Proceeds From $200 Million Bank Credit Facility - Revolver 91,073 78,548 169,622 Proceeds From $100 Million Bank Credit Facility - Term Loan 100,000 - 100,000 Proceeds From $200 Million Senior Subordinated Notes 200,000 - 200,000 Total 643,413$ 123,708$ 767,122$
* Includes Structured Parking
Sources (000's)
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Clarification of Additional Issues from Consulting Reports
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Legends Sun Is The Answer.
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A Great Plan
Great Location Destination Program – Legends Sun has the best mix of amenities to gamingAttainable Operating Projections – Legends Sun’s revenue and operating projections meet analysts’estimatesRealistic Capital Structure – Legends Sun has provided evidence of their project financing sources (with market required 40% equity contribution)
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Legends Sun Will Deliver
RED has established history of development and outstanding relationships in Wyandotte County and delivers what it promised
Of the Northeast Zone applicants, Mohegan Sun is clearly the most proven destination gaming operator
The Legends Sun team has the capacity and experience to absorb the project given the strength of their current operations and existing team
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What We Bring to Kansas
Passion
World Class Destination
Respect for Employees
Financial Ability
Community Involvement
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