1. Gaming Revenue
Projections for the
South-Central Gaming Zone
of Kansas
Presentation to Lottery Gaming Facility Review Board
by Will Cummings / Cummings Associates
July 24, 2008
1

2. Will E. Cummings
Cummings Associates
2

3. Questions, Please!
( at any time )
3

4. Overview
Process (even more briefly)
Cummings Projections
Differences from the Applicants
Key Difference: Spending vs. Distance
Some Differences in Market Shares
My Conclusion . . .
4

5. Gravity Model(s) Updated
Separate Slot / Table Models
Precise Locations
Precise Sizes
Everything Else . . .
“Power Ratings”
5

6. South-Central Zone
6

7. Summary of Projections (2013$)
Proponent Cummings
Harrah’s $272 $202
Marvel $230 $151
Penn $214 $143
( all in $ million )
7

8. 8

9. Penn Sumner LLC
9

10. 1,500 slots 2,000 slots
“High” $141.7 x
Baseline $123.5 $132.9
“Low” $97.8 x
(all in 2007 $ million for Penn National’s Hollywood Casino)
10
Cummings Projections (2007$)

11. 1,500 slots 2,000 slots
“High” $164.3 x
Baseline $143.2 $154.1
“Low” $113.4 x
(all in 2013 $ million for Penn National’s Hollywood Casino)
11
Cummings Projections (2013$)

12. 12
Exhibit 4: Penn's Wellington Projections vs. Cummings's (2.5% escalation)
$0
$50
$100
$150
$200
$250
$300
$350
2010 2011 2012 2013 2014 2015 2016
Note: Cummings projections through 2013 are for 1,500-slot facility --
for 2015, they are for a 2,000-slot facility (for 2014, intermediate)
Slot+TableWin(notinc.poker)($mn)
Penn W
C Low
C Base
C High

13. 13
Exhibit 5: Penn's Wellington Projections vs. Cummings's (5% escalation)
$0
$50
$100
$150
$200
$250
$300
$350
2010 2011 2012 2013 2014 2015 2016
Note: Cummings projections through 2013 are for 1,500-slot facility --
for 2015, they are for a 2,000-slot facility (for 2014, intermediate)
Slot+TableWin(notinc.poker)($mn)
Penn W
C Low
C Base
C High

14. Sources of Difference (2013$)
Cummings Morowitz Diff.
0-100 miles $124.8 $174.2 $49.4
100+ miles $11.6 $10.2 ($1.4)
Drive-Bys $6.8 $5.4 ($1.4)
Hotel etc. $0.0 $27.8 $27.8
Total $143.2 $217.6 $74.4
(all $ million)
14

15. [ differences in market shares
do not appear material ]
15

16. 16
Penn Wellington: Differences in Spending per Adult (Kansas only)
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
0 20 40 60 80 100 120 140
Distance from Penn Wellington (miles)
ProjectedAnnualSpending/AdultatPennWellington
Cummings
Morowitz

17. 17
Penn Wellington: Differences in Projected Spending per Adult (Kansas only)
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
0 200
( data sorted not by distance but by Cummings projection )
ProjectedAnnualSpending/AdultatPennWellington
Cummings
Morowitz

18. 18
Penn Wellington: Differences in Projected Spending per Adult (Oklahoma)
$0
$20
$40
$60
$80
$100
0 25
( data sorted not by distance but by Cummings projection )
ProjectedAnnualSpending/AdultatPennWellington
Cummings
Morowitz

19. Marvel / Trailhead
19

20. Cummings Projections (2007$)
2,000 slots
“High” $149.7
Baseline $130.2
“Low” $103.7
(all in 2007 $ million for Marvel’s Trailhead Casino)
20

21. Cummings Projections (2013$)
2,000 slots
“High” $173.6
Baseline $150.9
“Low” $120.3
(all in 2013 $ million for Marvel’s Trailhead Casino)
21

22. 22
Exhibit 4: Marvel's Wellington Projections vs. Cummings's (2.5% escalation)
$0
$50
$100
$150
$200
$250
$300
$350
2010 2011 2012 2013 2014 2015 2016
Note: Cummings projections are for "stabilized operations." Marvel's are for FY ending Sept. 30.
Slot+TableWin(notinc.poker)($mn)
Marvel
C Low
C Base
C High

23. 23
Exhibit 5: Marvel's Wellington Projections vs. Cummings's (5% escalation)
$0
$50
$100
$150
$200
$250
$300
$350
2010 2011 2012 2013 2014 2015 2016
Note: Cummings projections are for "stabilized operations." Marvel's are for FY ending Sept. 30.
Slot+TableWin(notinc.poker)($mn)
Marvel
C Low
C Base
C High

24. Sources of Difference (2013$)
Cummings Marvel Diff.
0-100 miles $128.7 $225.0 $96.3
100+ miles $15.5 $26.9 $11.4
Drive-Bys $6.8 $1.2 ($5.4)
VIP Guests $0.0 $5.1 $5.1
Total $150.9 $258.2 $107.3
(all $ million)
24

25. 25
Marvel: Modest Difference in Projections for Market Share -- in Kansas
0%
20%
40%
60%
80%
100%
0 20 40 60 80 100 120 140
Distance from Marvel Wellington (miles)
MarvelWellingtonMarketShare
Cummings
Marvel

26. 26
Marvel: Substantial Differences in Market Share in Oklahoma
0%
20%
40%
60%
80%
100%
20 40 60 80 100 120 140 160
Distance from Marvel Wellington (miles)
MarvelWellingtonMarketShare
Cummings
Marvel

27. 27

28. 28
Marvel: More Significant Differences in Projected Spending Per Adult (Kansas)
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
0 20 40 60 80 100 120 140
Distance from Marvel Wellington (miles)
ProjectedAnnualSpending/AdultatMarvelWellington
Cummings
Marvel

29. 29
Marvel: Very Large Difference in Projected Spending from Oklahoma
$0
$50
$100
$150
$200
$250
$300
$350
$400
20 40 60 80 100 120 140 160
Distance from Marvel Wellington (miles)
ProjectedAnnualSpending/AdultatMarvelWellington
Cummings
Marvel

30. Harrah’s Sumner Resorts
30

31. Cummings Projections (2007$)
2,000 slots
“High” $194.0
Baseline $174.2
“Low” $148.4
(all in 2007 $ million for Harrah’s Sumner Resorts)
31

32. Cummings Projections (2013$)
2,000 slots
“High” $225.0
Baseline $202.0
“Low” $172.0
(all in 2013 $ million for Harrah’s Sumner Resorts)
32

33. 33
Exhibit 4: Harrah's Mulvane Projections vs. Cummings's (2.5% escalation)
$0
$50
$100
$150
$200
$250
$300
$350
2010 2011 2012 2013 2014 2015 2016
Note: Cummings projections are for "stabilized operations"
Slot+TableWin(notinc.poker)($mn)
Harrahs
C Low
C Base
C High

34. 34
Exhibit 5: Harrah's Mulvane Projections vs. Cummings's (3% escalation)
$0
$50
$100
$150
$200
$250
$300
$350
2010 2011 2012 2013 2014 2015 2016
Note: Cummings projections are for "stabilized operations"
Slot+TableWin(notinc.poker)($mn)
Harrahs
C Low
C Base
C High

35. Sources of Difference (2013$)
Cummings Harrah’s Diff.
0-40 min. $172 $160 ($12)
41-100 min. $16 $52 $36
101-140 min. $5 $13 $8
Beyond $9 $49 $40
Total $202 $274 $72
(all $ million)
35

36. 36
Harrah's Projected Gaming Revenue by Time/Distance Zone ($ million)
$65
$95
$27
$15
$10 $9
$4
$14
$35
$0
$20
$40
$60
$80
$100
$120
0 to 20
minutes
21 to 40
minutes
41 to 60
minutes
61 to 80
minutes
81 to 100
minutes
101 to 140
minutes
(impeded)
101 to 140
minutes
Out of market Overnight
TotalGamingRevenue(Year3)

37. 37
Cummings Projections for Harrah's by Time/Distance Zone ($ million)
$82
$90
$8 $6
$2
$5
$9
$0
$20
$40
$60
$80
$100
$120
0 to 20
minutes
21 to 40
minutes
41 to 60
minutes
61 to 80
minutes
81 to 100
minutes
101 to 140
minutes
(impeded)
101 to 140
minutes
Out of market Overnight
TotalGamingRevenue(Year3)

38. 38
Harrah's Projected Gaming Revenue by Time/Distance Zone ($ million)
$65
$95
$27
$15
$10 $9
$4
$14
$35
$0
$20
$40
$60
$80
$100
$120
0 to 20
minutes
21 to 40
minutes
41 to 60
minutes
61 to 80
minutes
81 to 100
minutes
101 to 140
minutes
(impeded)
101 to 140
minutes
Out of market Overnight
TotalGamingRevenue(Year3)

39. Location I:
The Closer, the Better
=“Friction”
39

40. Casino Y: players’ club data
$0
$100
$200
$300
$400
$500
0 20 40 60 80 100 120
Distance from Casino Y (miles)
AverageAnnualSpending/Adul

41. Hoosier Park &
Indiana Downs
41

42. 42

43. Win/Slot/Day:
Cummings June 2008
Projection* Actual
Hoosier Park $376 $267
Indiana Downs $357 $245
* From “Projections for . . . ,” September 8, 2007.
43

44. Conclusion:
44

45. Casino Y: players’ club data
$0
$100
$200
$300
$400
$500
0 20 40 60 80 100 120
Distance from Casino Y (miles)
AverageAnnualSpending/Adul

46. Summary of Projections (2013$)
Proponent Cummings
Harrah’s $272 $202
Marvel $230 $151
Penn $214 $143
( all in $ million )
46

47. Will E. Cummings
Cummings Associates
135 Jason Street
Arlington, MA 02476
(781) 641-1215
cummingsw@aol.com
47

48. Gaming Revenue
Projections for the
South-Central Gaming Zone
of Kansas
Presentation to Lottery Gaming Facility Review Board
by Will Cummings / Cummings Associates
July 24, 2008
48