Inside Gaming: Futures Market Nailed Election

Gamblers know best. In the end, the Iowa Electronic Markets, a real-money futures market that involves contract payoffs based on current events, nailed the 2004 presidential election. It called the election 51 percent to 48.5 percent for George W. Bush over John Kerry. It also correctly predicted Republicans would notch up their control of the House of Representatives and Senate. Some experts say betting is the best barometer of trends because money is at stake.

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The Atlantic City casino workers strike has been settled, but it'll have repercussions for years. Company sources are saying: "We've got the power," now that the unions (UNITE HERE, Local 54 in Atlantic City and Culinary Local 226) caved. Rank-and-file workers say the companies don't care about customers or workers anymore, only costs. Labor experts say the ill will and distrust on both sides will affect customer service and worker performance for years, and make for painful negotiations three years from now when contracts expire in Las Vegas.

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Sheldon Adelson is poised to go to market with his initial public offering for Las Vegas Sands. The only holdup is approval from the Securities and Exchange Commission. The massive offering will be the public's first chance to invest in Adelson's business model of pumping up midweek revenues with convention business. With Wynn Las Vegas soon to open across the street, analysts say the IPO should set records. Remember, Wynn Resorts' IPO opened at $13 a share two years ago and closed Friday at $63.01 a share, despite having no track record and no cash flow.

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Strip land values remain much in dispute. New Frontier owner Phil Ruffin took strong exception to Wall Street comments that land value estimates have been inflated. Ruffin said he has had a firm, all-cash offer in the past month on his property for $20 million an acre and turned it down. With 1,200 feet of Strip frontage, however, analysts say Ruffin's property is unique. Still, Deutsche Bank joined the fray, estimating that Strip properties are fairly valued at $15 million to $25 million an acre, 50 percent to 25 percent more than Merrill Lynch's earlier benchmark estimate.

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Don't count your chickens. Public opinion polls in the United Kingdom show two-thirds to three-quarters of voters there oppose the development of Las Vegas-style casinos. That could throw a bucket of cold water on Harrah's Entertainment, Caesars Entertainment and MGM Mirage, as well as major slot makers such as International Game Technology, all of which have seen England as a tremendous opportunity for expanded gambling and as a major new feeder market for the Strip.

The Inside Gaming column is compiled by Gaming Wire Editor Rod Smith. You can contact him by phone at (702) 477-3893, fax (702) 387-5243 or e-mail at rsmith@reviewjournal.com.

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