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Old 03-07-2010, 05:50 PM   #76
Bored5000
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Re: AC need not worry about Philly/PA casinos

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Originally Posted by JJS6866 View Post
I live in central PA and it will be 2 hours to the nearest card room which is still to far imo.
You don't think there will be poker at Hollywood Casino in Grantville?
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Old 03-08-2010, 11:44 PM   #77
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Re: AC need not worry about Philly/PA casinos

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Originally Posted by Hoos Crazy View Post
Based on the article linked above, AC is in worse shape than I knew. At this point, there isn't going to be any new construction of bigger newer nicer casinos in AC for the foreseeable future. So AC is going to slowly decay while Philly will have newer nicer casinos.

AC isn't going to die - but it is going to shrink. The problem that AC is facing is that even a fairly small loss of revenue will be enough to put the most vulnerable casinos under. Truth is that there may be enough to keep 8 or 9 casinos healthy, but not 11.
This is an interesting thread. Having lived and worked in the AC market, I feel I have a solid understanding of the issues.

The future of Atlantic City is already written -- it is called Reno, NV. Obviously AC is not going to fold up overnight but it will continue to suffer from increased competition with significant geographic advantages. The "core" AC market used to be southern New York all the way to DC. As more casinos open up and offer more gambling options (slots, tables, poker), it will divert trips to AC. Yes, people will still go to AC sometimes, but they will split their trips with the local casinos. Already, much of the day-trip business has dried up. PA, Del and Yonkers have put a big hurt on AC's bus business... and soon Aqueduct and Maryland will open up too. All with newer, closer facilities.

AC will survive but it will be a gloomy place. A few casinos will close (probably 3 in the next 5 years) and overall gambling revenue will decline. That doesn't mean the surviving casinos won't be profitable, but those profits will continue to shrink and returning to the glory days of the mid-2000's will be a pipe dream. Unfortunately, business is predicated on growth, and therefore declining revenues & profits means a _major_ decline in the value of the casino assets (see Tropicana, which originally had offers above $700 million in 2007, was eventually sold for about $200 million).

This isn't all a bad thing. AC has pretty much been run by the same players for a long time. It took new blood (Borgata) to shake things up in 2003. (Mirage was a similar boost to a tired Las Vegas in 1989.) As the asset values drop, it provides opportunity for some new investors to perhaps buy a failing casino on the cheap and inject some new ideas into the market.

Without a doubt, it will be interesting to see where the chips fall.
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Old 03-09-2010, 12:25 AM   #78
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Re: AC need not worry about Philly/PA casinos

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ATLANTIC CITY, SUDDENLY SURROUNDED

Go back 30 years, and there were, of course, really only two gaming markets: Las Vegas and Atlantic City, notes Alex Calderone, who provides turnaround and crisis management services to the gaming sector at Conway MacKenzie. Between 1980 and 1990 only a few more jurisdictions legalized gaming, like Iowa and South Dakota. From 1990 to the present, however, 30 additional states have legalized gaming or implemented tribal gaming.

I still wonder why AC never really took-off. I was naive enough to think the city-by-the-sea could actually compete with Vegas. (This was back in the 80s.)
I guess there are/were many factors, local and state politics, greed, etc.
It’s really a shame.
Saying AC "never took off" isn't exactly right. Gaming revenue in 2005-2006 was nearly the same in Las Vegas and Atlantic City. However AC had about 90% less non-gaming revenue.

The reasons are pretty easy to discern: no real airport, very minor convention business, crappy weather most of the year, far stricter regulations to obtain a casino license, late to the party with upscale shopping/dining/entertainment/clubs, driving out visionaries such as Wynn, old facilities (some rooms at Bally's, Resorts and Caesars are _still_ the original, pre-casino hotel rooms), ultra-corrupt and misguided government, very little cheap land.

AC had no new casinos built from 1990 to 2003. Meanwhile, Las Vegas opened MGM, Bellagio, Hard Rock, Mandalay, Paris, NYNY, Venetian, and many more. Investors spoke with their wallets. The city was growing, lively, exciting, while AC just stayed the same. Las Vegas was also the fastest-growing city in the US nearly every year in the 1990's, allowing smaller non-Strip players to thrive (as well as many non-gaming businesses). AC has no "locals" and you aren't allowed to build a locals-style casino anyway (west of Pacific Ave, less than 500 rooms).

Don't forget that the 1980's were pretty grim in Las Vegas. AC did initially take a huge amount of business away. I read that in 1985 airlines cancelled the last direct flights from NY to Las Vegas. But most of the US population had not been exposed to casino gambling and thus the growth potential was still enormous. AC gave East Coast people a taste, then once the Mirage was built, the floodgates opened. Las Vegas took off and never slowed down until the current recession, save for a speed bump after 9/11. Can AC pull off a similar turnaround?
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Old 03-09-2010, 12:53 AM   #79
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Re: AC need not worry about Philly/PA casinos

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OK, then let's try this.
You have a $100 bill to put in a slot machine.
Your choice is PA or NJ.
The casino owners in PA have to pay 55% of their profits in taxes.
The casino owners in NJ have to pay 9% of their profits in taxes.
Where do you put your $100?
Dude, a little research would go a long way and prevent you from looking like a fool. Everything you are assuming is publicly available info.

The official gov't reports show that PA casinos "held" 8.8% on slots in Feb ($2.059 billion paid back from $2.258 b in wagers). NJ doesn't total all slots up but individual casinos ranged from 7.8% at the Hilton to 9.8% at Showboat (for Jan. Feb NJ numbers will be released on Wed). So the PA casinos are clearly competitive in terms of the core gambling product. The additional tax they pay is a cost of doing business -- it means less money for super-nice buildings and amenities (why people complain PA casinos are like warehouses), probably fewer comps, and likely a lower ROI to investors -- but it does not mean they absolutely have to compromise the core product.

The relevant government-issued statistics are available
here for PA: http://www.pgcb.state.pa.us/files/re...y_20100228.pdf
and here for NJ: http://www.state.nj.us/casinos/finan...001revenue.pdf

Do you think when PA table games start, your dealer will start to pay off your $50 blackjack wager and then say, "we have higher taxes than NJ, so you only win $45" ?

Bottom line is that for a lot of people, they can gamble the entire $100 in PA. Going to AC means $7 in tolls, $15+ in gas, minimum $5 to park. So really they only have $75 or less to gamble with. Even if PA slots were in fact tighter, most would choose to play the entire $100 than just $70-75 at better odds.
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Old 03-09-2010, 01:07 AM   #80
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Re: AC need not worry about Philly/PA casinos

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Don't forget that the 1980's were pretty grim in Las Vegas. AC did initially take a huge amount of business away. I read that in 1985 airlines cancelled the last direct flights from NY to Las Vegas. But most of the US population had not been exposed to casino gambling and thus the growth potential was still enormous. AC gave East Coast people a taste, then once the Mirage was built, the floodgates opened. Las Vegas took off and never slowed down until the current recession, save for a speed bump after 9/11. Can AC pull off a similar turnaround?
This was about to happen right before the economy tanked. There were so many big, new Borgata-type properties about to be built before the credit markets dried up and gaming companies' profits started to slide. Now only Revel will (may) make it. AC might have missed its window of opportunity. I think if Revel, Pinnacle, and MGM Grand all were built (as well as a couple other planned casinos), AC would have been on track to be close to Vegas East. It's probably too late now because the competition from the neighboring states will scare away new investors.
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Old 03-09-2010, 11:25 AM   #81
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Re: AC need not worry about Philly/PA casinos

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This was about to happen right before the economy tanked. There were so many big, new Borgata-type properties about to be built before the credit markets dried up and gaming companies' profits started to slide. Now only Revel will (may) make it. AC might have missed its window of opportunity. I think if Revel, Pinnacle, and MGM Grand all were built (as well as a couple other planned casinos), AC would have been on track to be close to Vegas East. It's probably too late now because the competition from the neighboring states will scare away new investors.
I'm not sure even that would help. IMO, the core problem is that AC is an utter slum everywhere except where casinos are. As a result, the place practically dies at night, in my experience. Creating a few more billion dollar enclaves wouldn't solve the problem, for that you need an active effort from the local government. Good luck with that.
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Old 03-09-2010, 12:32 PM   #82
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Re: AC need not worry about Philly/PA casinos

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Originally Posted by ExactaBox View Post
Dude, a little research would go a long way and prevent you from looking like a fool. Everything you are assuming is publicly available info.

The official gov't reports show that PA casinos "held" 8.8% on slots in Feb ($2.059 billion paid back from $2.258 b in wagers). NJ doesn't total all slots up but individual casinos ranged from 7.8% at the Hilton to 9.8% at Showboat (for Jan. Feb NJ numbers will be released on Wed). So the PA casinos are clearly competitive in terms of the core gambling product. The additional tax they pay is a cost of doing business -- it means less money for super-nice buildings and amenities (why people complain PA casinos are like warehouses), probably fewer comps, and likely a lower ROI to investors -- but it does not mean they absolutely have to compromise the core product.

The relevant government-issued statistics are available
here for PA: http://www.pgcb.state.pa.us/files/re...y_20100228.pdf
and here for NJ: http://www.state.nj.us/casinos/finan...001revenue.pdf

Do you think when PA table games start, your dealer will start to pay off your $50 blackjack wager and then say, "we have higher taxes than NJ, so you only win $45" ?

Bottom line is that for a lot of people, they can gamble the entire $100 in PA. Going to AC means $7 in tolls, $15+ in gas, minimum $5 to park. So really they only have $75 or less to gamble with. Even if PA slots were in fact tighter, most would choose to play the entire $100 than just $70-75 at better odds.
Well said.

ExactaBox did have some great points about AC's overall atmosphere.
The money hasn't spread across the city.
A stand-up comic once said, "AC looks good if you come in by boat."

I still think AC blew her chance of being a national resort. She had a "lock" on east coast gaming for a long time.

I'll still go. I like the poker, boardwalk, ocean, and of course, Borgata.
Looking forward to the opening of Revel. Yes, I think it will open.

Last edited by bobaby007; 03-09-2010 at 12:42 PM.
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Old 03-09-2010, 12:41 PM   #83
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Re: AC need not worry about Philly/PA casinos

http://www.pressofatlanticcity.com/n...cc4c002e0.html

Largest casino union sues Atlantic City to force referendum on Revel casino tax breaks

ATLANTIC CITY - Officials with the resort's largest casino union have filed a lawsuit against the city with hopes of forcing a referendum on a $300 million tax incentive plan to aid Revel Entertainment Group's casino project.

Local 54 of Unite Here, representing casino service workers, announced its lawsuit Tuesday, which challenges the city's decision to reject its petition of the tax plan. The union is also suing the city to turn over documents related to the casino's application for the tax breaks.

Under the proposal, Revel would receive between $268 million and $300 million in sales tax abatements over 20 years after the $2.6 billion casino project is opened.

Local 54 President Bob McDevitt opposed the plan from the moment it became public, arguing that the state cannot afford "a bailout" and accusing the state of working to put at least two existing casinos out of business through their support of the Revel project.

McDevitt organized a petition drive to bring the proposal to a citywide vote. However, city attorneys rejected the petition in January, contending that city measures under the Local Redevelopment and Housing Law are not subject to referendum.

"Six weeks ago, Governor Christie challenged AC voters to take back our city government. By filing a referendum petition signed by almost 1,800 voters, we are trying to change the way our city works. Unfortunately, politicians, both democrats and republicans, have lined up to stop us. If this bailout is such a good deal for the city and the state, why are they afraid to air it in public? What are they hiding?" McDevitt wrote in a news release Tuesday.
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Old 03-09-2010, 08:56 PM   #84
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Re: AC need not worry about Philly/PA casinos

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I'm not sure even that would help. IMO, the core problem is that AC is an utter slum everywhere except where casinos are. As a result, the place practically dies at night, in my experience. Creating a few more billion dollar enclaves wouldn't solve the problem, for that you need an active effort from the local government. Good luck with that.
I totally agree. That's the biggest problem with AC by far. But there has been talk about some of the blight being bought out and torn down (I believe either directly by or as a result of Revel), and more billion dollar investments might drive more of this. I wish I saved a link to the article on this. Can't remember if this is/was totally a private effort or was an eminent domain thing in the name of widening roads and such.
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Old 03-10-2010, 12:51 AM   #85
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Re: AC need not worry about Philly/PA casinos

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I've seen Parx and other popular PA casinos listed in this thread, however a sleeper may be the soon-to-open resort-casino at the Valley Forge Convention Center. Can't ask for a better highway location where the Schulkyll Expressway, Route 202 and the PA Turnpike all meet, almost adjacent to the King of Prussia Mall.
Any thoughts on this site?
I'm excited about that casino too (mostly because it'll be 10 mins from my house) but has anyone heard anything as far as a time-line for that place? They are saying that it's going to be a resort-casino but they don't even have slots there yet like the other places do they? I know they have a hotel already(the old convention center etc) but I have a bad feeling this one may be a couple of years out. Anyone have info??
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Old 03-10-2010, 04:28 PM   #86
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Re: AC need not worry about Philly/PA casinos

So when will one of these casino(w poker room) open? this year or next?
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Old 03-10-2010, 08:19 PM   #87
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Re: AC need not worry about Philly/PA casinos

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So when will one of these casino(w poker room) open? this year or next?
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I live about 10 minutes from Parx. We took my mother-in-law there last weekend to let her throw away some coins in the slots. While there, I spoke to several "suits" about poker. They all said it was a done deal. The bad news is, initially, the room will be in the racetrack building - not the nice new facility. They think "eventually" it will be relocated (in the next expansion), but that will NOT be for a few years.

The racetrack is a ****hole.

In any case, they expect cards in the air by the 4th of July holiday.
July 4th can't come soon enough...even though I'll be in AC this weekend.
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Old 03-11-2010, 07:08 PM   #88
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Re: AC need not worry about Philly/PA casinos

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Originally Posted by ExactaBox View Post
The official gov't reports show that PA casinos "held" 8.8% on slots in Feb ($2.059 billion paid back from $2.258 b in wagers). NJ doesn't total all slots up but individual casinos ranged from 7.8% at the Hilton to 9.8% at Showboat (for Jan. Feb NJ numbers will be released on Wed). So the PA casinos are clearly competitive in terms of the core gambling product. The additional tax they pay is a cost of doing business -- it means less money for super-nice buildings and amenities (why people complain PA casinos are like warehouses), probably fewer comps, and likely a lower ROI to investors -- but it does not mean they absolutely have to compromise the core product.
As long as you have faith in the sanctity of the "core product", then God bless you, son. I don't share your views.
Whether you're a carpenter, a butcher or a casino owner, any time you must pay more than 6 times the amount of taxes from your profits as a competitor 60 miles, I'd have to find a way to skim.
And I would trust a PA casino owner not to skim about as much as I have confidence that I can throw a grand piano across the Delaware River.
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Old 03-11-2010, 09:48 PM   #89
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Re: AC need not worry about Philly/PA casinos

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As long as you have faith in the sanctity of the "core product", then God bless you, son. I don't share your views.
Whether you're a carpenter, a butcher or a casino owner, any time you must pay more than 6 times the amount of taxes from your profits as a competitor 60 miles, I'd have to find a way to skim.
And I would trust a PA casino owner not to skim about as much as I have confidence that I can throw a grand piano across the Delaware River.
Hey pal, I think you've seen Casino one too many times. This isn't the 60's anymore. I just provided you with gov't sanctioned proof, and the best response you can come up with is that every operator in the state of PA is skimming? In PA, every slot machine is hooked up to a central, state-monitored server. The state knows exactly how much was played on every single machine before the casino even counts the money.

http://www.dgsweb.state.pa.us/CMSUpl...ortaxes_16.wmv

Just to follow your logic, there are lots of places where there are tax discrepancies. In Virginia a pack of smokes carries a 30 cent tax. In Maryland it's $2.00 per pack. About 6x, just like your example. Is every 7-11 in Maryland skimming? How about gasoline excise tax -- in NJ it is 14.5 cents per gallon, in NY it is 42.5 cents. Is every NY gas station close to NJ skimming? What about online sales tax (zero) vs a real store? States with no income tax vs states with an income tax?

http://www.taxfoundation.org/taxdata/show/245.html

And finally, you bolded and underlined "from your profits" to somehow emphasize your point, except that isn't even correct. Casino revenue taxes in both NJ and PA (and every other state) are calculated from REVENUE not profit.
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Old 03-19-2010, 01:34 PM   #90
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Re: AC need not worry about Philly/PA casinos

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I totally agree. That's the biggest problem with AC by far. But there has been talk about some of the blight being bought out and torn down (I believe either directly by or as a result of Revel), and more billion dollar investments might drive more of this. I wish I saved a link to the article on this. Can't remember if this is/was totally a private effort or was an eminent domain thing in the name of widening roads and such.
Here's a new article that's indicating this removal of run-down homes is actually happening and looks like these 22 vacant homes may just be the start of it.
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Old 03-19-2010, 02:04 PM   #91
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Re: AC need not worry about Philly/PA casinos

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Hey pal, I think you've seen Casino one too many times. This isn't the 60's anymore. I just provided you with gov't sanctioned proof, and the best response you can come up with is that every operator in the state of PA is skimming? In PA, every slot machine is hooked up to a central, state-monitored server. The state knows exactly how much was played on every single machine before the casino even counts the money.

And finally, you bolded and underlined "from your profits" to somehow emphasize your point, except that isn't even correct. Casino revenue taxes in both NJ and PA (and every other state) are calculated from REVENUE not profit.
REVENUE means all money taken in before expenses are deducted.
PROFIT (NET INCOME) refers to revenue after expenses (slot payouts, salaries, utilities, overhead, etc.) have been deducted and before taxes are paid.
Are you suggesting the casinos pay taxes solely based on the amount of money going into slot machines before expenses are deducted?
That's absurd.

And since you have such unflagging faith in the honesty of casino operators, I would call your attention to the tens of millions of dollars stolen from players at Absolute Poker (true, not a brick and mortar casino) where the cheaters could see the cards of the other players.
As I recall that wasn't back in the Sixties, was it?
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Old 03-19-2010, 05:03 PM   #92
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Re: AC need not worry about Philly/PA casinos

In New Jersey, taxes on are gambling revenues, not profits.

http://www.ncsl.org/default.aspx?tabid=12805

I'd like to see a site or any proof that any U.S. casinos are skimming or stealing from players.
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Old 03-19-2010, 05:28 PM   #93
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Re: AC need not worry about Philly/PA casinos

Casino revenue is one of the most monitored things in the universe. You can't just skim substantial sums of money like it's 1972.
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Old 03-20-2010, 12:56 AM   #94
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Re: AC need not worry about Philly/PA casinos

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Are you suggesting the casinos pay taxes solely based on the amount of money going into slot machines before expenses are deducted?
That's absurd.
I believe he is saying just that.
I believe he is correct.

It is not absurd.


Please look up definitions of excise tax and absurd.
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Old 03-20-2010, 11:27 AM   #95
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Re: AC need not worry about Philly/PA casinos

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Originally Posted by Jim215 View Post
REVENUE means all money taken in before expenses are deducted.
PROFIT (NET INCOME) refers to revenue after expenses (slot payouts, salaries, utilities, overhead, etc.) have been deducted and before taxes are paid.
Are you suggesting the casinos pay taxes solely based on the amount of money going into slot machines before expenses are deducted?
That's absurd.

And since you have such unflagging faith in the honesty of casino operators, I would call your attention to the tens of millions of dollars stolen from players at Absolute Poker (true, not a brick and mortar casino) where the cheaters could see the cards of the other players.
As I recall that wasn't back in the Sixties, was it?
RENI Revenue-Expenses=Net Income (Accounting Term)
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Old 03-20-2010, 01:21 PM   #96
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Re: AC need not worry about Philly/PA casinos

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Originally Posted by Jim215 View Post
REVENUE means all money taken in before expenses are deducted.
PROFIT (NET INCOME) refers to revenue after expenses (slot payouts, salaries, utilities, overhead, etc.) have been deducted and before taxes are paid.
Are you suggesting the casinos pay taxes solely based on the amount of money going into slot machines before expenses are deducted?
That's absurd.

And since you have such unflagging faith in the honesty of casino operators, I would call your attention to the tens of millions of dollars stolen from players at Absolute Poker (true, not a brick and mortar casino) where the cheaters could see the cards of the other players.
As I recall that wasn't back in the Sixties, was it?
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RENI Revenue-Expenses=Net Income (Accounting Term)
Exactly what I said!
Thank you, bobaby.
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Old 03-20-2010, 02:47 PM   #97
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Re: AC need not worry about Philly/PA casinos

So you just skip all the stuff that shows you are wrong?
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Old 03-20-2010, 07:18 PM   #98
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Re: AC need not worry about Philly/PA casinos

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So you just skip all the stuff that shows you are wrong?
I read your link, Slacker.
It looks like the term "revenue" means different things to different organizations.
In public transportation, for example, "revenue" is the amount of money going into the farebox (all the money coming into an enterprise from customers) before paying bus drivers salaries, fuel for the vehicles, etc.
In casino lingo (your link), "revenue" appears to be net income (profit) or the amount of money remaining AFTER expenses have been deducted (the "win" for the casino).
I stand by my statement that no company could possibly pay taxes on money coming in without allowing for expenses.
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Old 03-20-2010, 08:25 PM   #99
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Re: AC need not worry about Philly/PA casinos

On this particular point, and this particular point only, I'm going to side with Jim215. There is no way that NJ casinos pay 8% tax on revenues if you definite revenue as any time casino wins a bet.

Just think about it for a moment. Let's take blackjack as an example. Assume that in a 100 hands, casino wins 51 of them, and the player wins 49. Each hand is worth $10 (let's ignore BJ payouts for simplicity). When the casino wins their 51 hands, they get $510, and will pay $41 in taxes. When they lose their 49 hands, they pay out $490. Therefore, they net -$21 before they even pay the dealers or other expenses.

Does that make sense to you?
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Old 03-20-2010, 08:31 PM   #100
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Re: AC need not worry about Philly/PA casinos

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On this particular point, and this particular point only, I'm going to side with Jim215. There is no way that NJ casinos pay 8% tax on revenues if you definite revenue as any time casino wins a bet.

Just think about it for a moment. Let's take blackjack as an example. Assume that in a 100 hands, casino wins 51 of them, and the player wins 49. Each hand is worth $10 (let's ignore BJ payouts for simplicity). When the casino wins their 51 hands, they get $510, and will pay $41 in taxes. When they lose their 49 hands, they pay out $490. Therefore, they net -$21 before they even pay the dealers or other expenses.

Does that make sense to you?
Do you want to argue about it or do you want the truth. I know for sure what the answer is.

Stan
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