A Press for the Planet: Journalism in the face of the Environmental Crisis
2015 LGFRB Kansas crossing Casino Proposal
1.
2. This group of experienced regional casino developers
and operators has created the right attraction
for Southeast Kansas
3.
4. WHY IT’S THE BEST LOCATION
KANSAS CROSSING TRAFFIC COUNT: 22,000 A DAY
5. WHY KANSAS CROSSING?
• The Right Location, The Right Size
• Best Outcome for the Local Economy
• Direct Jobs for Kansans
• Commitment to Purchase Local Goods and Services
• Product Mix and Partnerships Maximize Tourism
• Best Outcome for Kansas
• Maximize Casino Revenue with Proven Track Record Marketing
and Operating Successful Regional Casinos in Competitive
Markets
• Viable, Sustainable Business Model
• Improve Quality of Life for Southeast Kansas Residents
• Experienced Regional Gaming Developer and Operator
7. Presentation to Kansas Lottery Gaming Facility Review Board
Cory Morowitz, Managing Partner GGH Morowitz Gaming Advisors
Kansas Crossing Casino and Hotel
Gaming Market Assessment
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Background
GGH / Morowitz Gaming Advisors is a merchant advisory and consulting firm focused on
gaming industry with offices in NYC, Atlantic City, Las Vegas
Principals have over 90 years combined experience - operations, investment banking,
feasibility studies
Cory Morowitz heads up firm's consulting and feasibility/market study practice
Engaged to develop market study of Kansas Crossing
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Our Study Track Record
Our reputation is our number one asset
We provided unbiased analysis
Our forecast performance (see below) indicates our level of accuracy
Forecast Comparisons
Project Forecast Actual Variance %
Maryland Live Yr 3 603,111,794$ 636,255,000$ (5.2%)
Kansas Star Yr 3 (net of free play) 161,438,786$ 160,287,312$ 0.7%
Aqueduct Yr 1 611,518,808$ 644,180,951$ (5.1%)
Rocky Gap Yr 1 42,636,013$ 43,710,330$ (2.5%)
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Revenue Assessment – Location & Population Density
Location and population density are the most significant factors that drive gaming revenue
The site is well positioned to carve out a specific niche in an underserved part of Kansas
The Casino site is located on the northwest corner of US‐160 (US‐69) and US‐400 which are two
major state highways with approximately 15,000 or more automobiles traveling through the
intersection daily.
Population Density Map of Surrounding MSAs
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Revenue Assessment – Regional Analysis
Total population is significant beyond 15 miles and 30 minute drive time and growing
Regional economic data indicates healthy growth
Miles
(Straight-
Line)
2014 Adult
Population
(21+)
2014 Cumulative
Population
2018 Adult
Population (21+)
2018
Cumulative
Population
0 to 15 36,113 36,113 37,503 37,503
15 to 30 116,632 152,745 120,377 157,880
30 to 40 80,673 233,418 82,606 240,486
40 to 50 47,601 281,019 48,435 288,921
50 to 60 97,483 378,502 99,550 388,471
60 to 70 125,629 504,131 134,269 522,740
70 to 90 668,067 1,172,198 717,915 1,240,655
Total 1,172,198 1,172,198 1,240,655 1,240,655
Adult Population within 90 Miles
(Approximately 120 Minutes of Site)
30 Min Drive
time
60 Min Drive
time
90 Min Drive
time
Total Population
2014A 38,468 233,042 372,562
2019 38,742 237,698 379,410
% Change 2014A to 2019 0.7% 2.0% 1.8%
Average Household Size
2014A Households 15,489 91,183 144,822
2014A Avg Household Size 2.48 2.56 2.57
2019 Total Households 19,381 120,657 148,076
2019 Avg Household Size 2.00 1.97 2.56
2014A Housing Units
Total Housing Units 17,351 101,054 162,338
Owner Occupied Housing Units 89.3% 90.2% 89.2%
Renter Occupied Housing Units 38.3% 33.5% 30.8%
Vacant Housing Units 10.7% 9.7% 10.7%
2019 Housing Units
Total Housing Units 17,567 103,330 165,971
Owner Occupied Housing Units 89.2% 90.3% 89.2%
Renter Occupied Housing Units 38.5% 33.5% 30.8%
Vacant Housing Units 10.8% 9.6% 10.7%
Median Household Income
2014A $ 36,093 $ 37,859 $ 37,995
2019 $ 42,797 $ 44,730 $ 44,816
Per Capita Income
2014A $ 20,148 $ 20,234 $ 19,903
2019 $ 23,616 $ 23,506 $ 23,183
Median Age
2014A 32.5 36.6 37.7
2019 32.7 36.9 38.0
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Competitive Assessment – Regional Competition
Competition is manifested in the four corners area
Patrons from Kansas, Missouri, and Arkansas all taking their gaming dollars to
northeastern Oklahoma
Kansas Crossing would have a significant impact toward repatriating income from Kansas
patrons who cross the border today
Casino City State
Driving
Distance
(Miles)
Slots Tables Casino SF Convention SF Rooms Restaurant Venues
Kansas Crossing Hotel &
Casino
Pittsburg KS - 625 16 120 3 1
Downstream Quapaw OK 29.50 2000 36 70,000 10,000 374 6 2
Quapaw Miami OK 33.90 525 7 27,000 - 0 1 1
High Winds Miami OK 34.90 500 0 35,000 - 0 2 0
Buffalo Run Miami OK 36.10 800 17 70,000 10,000 101 3 1
The Stables Miami OK 38.60 670 0 25,000 - 0 2 0
Wyandotte Wyandotte OK 42.20 532 3 30,000 4,125 0 3 6
Indigo Sky Wyandotte OK 46.80 1270 14 45,000 - 117 6 0
Grand Lake Casino Grove OK 55.70 1657 8 45,000 - 0 1 1
West Siloam Springs Colcord OK 98.10 1500 20 136,252 7,120 140 4 1
Osage - Bartlesville Bartlesville OK 114.00 450 5 42,000 - 0 2 0
Hard Rock Tulsa Catoosa OK 119.00 4400 34 125,000 35,000 454 9 7
Cherokee Ramona Ramona OK 122.00 500 0 4,500 - 0 2 0
Osage - Tulsa Tulsa OK 134.0 1000 11 47,000 1,600 0 2 1
River Spirit Tulsa OK 137.00 2600 15 300,000 - 0 4 1
Cherokee - Fort Gibson Fort Gibson OK 142.00 500 0 27,500 - 0 1 0
Creek Nation Muscogee Muskogee OK 138.00 997 6 30,000 - 0 1 1
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Revenue Assessment – Gravity Model
Traditional Gravity Model Approach
Gravity model takes into account population, size,
attraction, and distance to determine revenues at
different casinos in a market
Visitation declines as distance increases (see chart
below)
Proximity to population is paramount
Size and attraction are determining factors
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
0 100 200 300 400 500 600
%WhoVisitAtlanticCity
Miles from Atlantic City
Visitation Curve
Visitation is dependent
on Proximity
Gravity Model Formula
R = (P * M * A ) / (D2)
Where
R=revenue
P=Population
M=Mass
A=Attraction
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Gaming Revenue – Drive in Market (Gravity Model)
Total drive-in market revenues within 90 miles of Kansas Crossing are estimated at
$455MM
Kansas Crossing’s share is estimated at $40MM
By Distance Segment
Miles 2018 Pop 2018 21+ Part % Gamers Budget Market $/Adult
Kansas
CrossingCasino Market Share
<15 miles 53,241 37,503 43.6% 15,751 1,118$ 17,607,752$ 470$ 11,336,186$ 64.4%
15-30 miles 166,987 120,377 43.1% 50,244 1,101$ 55,338,644$ 460$ 5,214,634$ 9.4%
30-40 miles 115,682 82,606 38.8% 31,270 1,084$ 33,909,199$ 410$ 3,252,214$ 9.6%
40-50 miles 66,569 48,435 33.7% 16,030 1,091$ 17,482,157$ 361$ 1,548,979$ 8.9%
50-60 miles 137,000 99,550 33.1% 32,242 1,102$ 35,536,784$ 357$ 2,252,201$ 6.3%
60-70 miles 181,795 134,269 33.1% 41,571 1,125$ 46,761,446$ 348$ 2,433,813$ 5.2%
70-90 miles 1,000,433 717,915 31.9% 213,307 1,165$ 248,599,553$ 346$ 13,572,223$ 5.5%
Total 1,721,707 1,240,655 34.2% 400,414 1,137$ 455,235,536$ 367$ 39,610,250$ 8.7%
Cumulative
Miles 2018 Pop 2018 21+ Part % Gamers Budget Market $/Adult
Kansas
CrossingCasino Market Share
<15 53,241 37,503 43.6% 15,751 1,118$ 17,607,752 470$ 11,336,186$ 64.4%
<30 220,228 157,880 43.2% 65,995 1,105$ 72,946,395 462$ 16,550,820$ 22.7%
<40 335,910 240,486 41.7% 97,264 1,099$ 106,855,595 444$ 19,803,034$ 18.5%
<50 402,479 288,921 40.3% 113,294 1,097$ 124,337,752 430$ 21,352,013$ 17.2%
<60 539,479 388,471 38.5% 145,536 1,099$ 159,874,537 412$ 23,604,215$ 14.8%
<70 721,274 522,740 37.1% 187,107 1,104$ 206,635,983 395$ 26,038,028$ 12.6%
<90 1,721,707 1,240,655 34.2% 400,414 1,137$ 455,235,536 367$ 39,610,250$ 8.7%
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Gaming Revenue - Traffic Intercept
Total traffic intercept is estimated at $254K
Traffic Intercept Market
Avg. Daily
Traffic
(AADT)
% Pass-
Through
Vehicles
Adults/
Vehicle
Gaming
Capture
Rate
Avg.
Win/
Guest Gaming Win
14,400 20.0% 1.5 0.55% 29$ 254,015$
Estimated Win Per Visit Calculations
Slots Tables Avg.
Time on Device (Hours) 0.50 0.50
Decisions per Hour 720 70
Average Bet 1.00$ 20.00$
Casino Hold % 8.50% 2.50%
Total Theoretical Revenue 30.60$ 17.50$
Weighted % 90.0% 10.0%
Weighted Average 28$ 2$ 29$
Gaming Revenues
from the Traffic Intercept Market Location
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Gaming Revenue - Overnight Visitor
Overnight Visitor market consists of the
following:
Patrons in Casino Hotel
Patrons in nearby hotels
RV Visitors
Semi-Trucks
Approximately $3 million at stabilization
Casino Hotel Over Night Visitor Market
# of Rooms Occupancy
Guests/
Room
Gaming
Capture
Rate
Avg. Win/
Guest Gaming Win
120 85.0% 1.7 80.0% 224$ 11,333,646$
Estimated % from beyond Drive-in Market 22.5%
2,550,070$
Estimated Win Per Visit Calculations
Slots Tables Avg.
Time on Device (Hours) 4.00 4.00
Decisions per Hour 720 70
Average Bet 1.00$ 20.00$
Casino Hold % 8.50% 2.50%
Total Theoretical Revenue 244.80$ 140.00$
Weighted % 80.0% 20.0%
Weighted Average 196$ 28$ 224$
Other Hotel Over Night Visitor Market
Pittsburg
Market
# of
Hotels
# of
Rooms Occupancy
Guests/
Room
Gaming
Capture
Rate
Avg.
Win/
Guest Gaming Win
w/in 15 min. 6 389 64.0% 1.7 5.0% 56$ 432,234$
w/in 15-30 1 22 64.0% 1.7 1.0% 56$ 4,889$
7 411 64.0% 1.7 4.8% 56$ 437,123$
Estimated % from beyond Drive-in Market 50%
218,562$
Estimated Win Per Visit Calculations
Slots Tables Avg.
Time on Device (Hours) 1.00 1.00
Decisions per Hour 720 70
Average Bet 1.00$ 20.00$
Casino Hold % 8.50% 2.50%
Total Theoretical Revenue 61.20$ 35.00$
Weighted % 80.0% 20.0%
Weighted Average 49$ 7$ 56$
RV Visitor Market
# of RV
Pads Occupancy Adults/RV
Gaming
Capture
Rate
Avg. Win/
Guest Gaming Win
20 50.0% 1.8 60.0% 35$ 137,174$
Estimated % from beyond Drive-in Market 100%
137,174$
Estimated Win Per Visit Calculations
Slots Tables Avg.
Time on Device (Hours) 1.00 1.00
Decisions per Hour 720 70
Average Bet 0.60$ 10.00$
Casino Hold % 8.50% 2.50%
Total Theoretical Revenue 36.72$ 17.50$
Weighted % 90.0% 10.0%
Weighted Average 33$ 2$ 35$
Semi-Truck Parking
# of Pads Occupancy
Adults/Tru
ck
Gaming
Capture
Rate
Avg. Win/
Guest Gaming Win
40 50.0% 1.1 60.0% 17$ 83,828$
Estimated % from beyond Drive-in Market 100%
83,828$
Estimated Win Per Visit Calculations
Slots Tables Avg.
Time on Device (Hours) 0.50 0.50
Decisions per Hour 720 70
Average Bet 0.60$ 10.00$
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Gaming Revenue Summary
Total gaming revenues at
stabilization of $42.9MM
Revenues ramping up to
$45.5 by year 5
2017 2018 2019 2020 2021
Number of Slots 625 625 625 625 625
WDU 135$ 150$ 154$ 157$ 160$
WDU as % of Year 3 88.0% 98.0% 102.0% 102.0% 102.0%
2.0%
Number of Tables 16 16 16 16 16
WDT 1,311$ 1,459$ 1,489$ 1,519$ 1,549$
WDU as % of Year 3 88.0% 98.0% 102.0% 102.0% 102.0%
Slot Revs 30,827,496 34,330,621 35,031,246 35,731,871 36,446,508
TG Revs 7,653,556 8,523,278 8,697,223 8,871,167 9,048,590
Total Gaming Revenue 38,481,052 42,853,899 43,728,468 44,603,038 45,495,098
TG Rev as % of Slot Rev 24.8% 24.8% 24.8% 24.8% 24.8%
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Non-Gaming Revenue
Non-gaming revenue total $2.5MM annually growing close to $3.0MM by year 5
Total revenues for the facility start at $41.0MM growing to $48.4MM by year 5
FYE 12/31
2017 2018 2019 2020 2021
Revenue
Gaming 38,481,052$ 42,853,899$ 43,728,468$ 44,603,038$ 45,495,098$
Non-Gaming Revenue
Food & Beverage 2,046,885 2,266,193 2,333,238 2,375,669 2,418,907
Retail 140,000 142,800 145,656 148,569 151,541
Entertainment 153,600 156,672 159,805 163,002 166,262
RV Park 36,500 37,230 37,975 38,734 39,509
Semi-Truck Parking 73,000 74,460 75,949 77,468 79,018
Other 76,962 85,708 87,457 89,206 90,990
Total Non-Gaming Revenue 2,526,947 2,763,063 2,840,080 2,892,648 2,946,225
Gross Revenue 41,007,999 45,616,961 46,568,548 47,495,686 48,441,324
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Tax Revenue to State and host Communities
Total gaming taxes of $10.4MM in year 1 growing to $12.3MM in year 5
3% to be divided among surrounding communities Pittsburg, Cherokee County,
Crawford County
Remainder to the state of Kansas
In addition to the gaming taxes below, $1.6MM to $1.8MM of regulatory fees
Additional commitments to local organizations
2017 2018 2019 2020 2021
27% up to $49mm 10,389,884 11,570,553 11,806,686 12,042,820 12,283,677
29% from$49mmto $60mm - - - - -
31% over $60mm - - - - -
Total Gaming Tax & Licenses 10,389,884 11,570,553 11,806,686 12,042,820 12,283,677
% of Gaming Revenue 27.0% 27.0% 27.0% 27.0% 27.0%
Kansas Crossing Casino L.C. – Pro Forma Gaming Taxes
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Visitation by State
Total visitation is estimated at ~520,00 annually
Over 51% of visits are expected to come from outside of Kansas
Most of Kansas’ visits will be patrons who are currently visiting casinos in Oklahoma
2018Estimated Gaming Revenues & Visitation
Gaming Spend Number Visitation by State
Revenues perVisit of Visits AR KS MO OK
Drive-In Market 39,610,250$ 81.35$ 486,882 31,699 248,476 199,408 7,298
Casino Hotel Overnight 2,550,070 223.84$ 11,392 3,028 1,099 7,245 19
OtherHotel Overnight 218,562 55.96$ 3,906 1,038 377 2,484 7
RV Revenue 137,174 34.80$ 3,942 1,048 380 2,507 7
TruckStop 83,828 17.40$ 4,818 1,281 465 3,064 8
TrafficIntercept 254,015 29.29$ 8,672 2,305 837 5,515 15
Total Gaming Revenue 42,853,899$ 82.47$ 519,612 40,400 251,635 220,224 7,354
7.8% 48.4% 42.4% 1.4%
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Visitation by Distance
Over $3.2MM of
revenue from beyond
100 miles
Total visitors beyond
100 miles of ~33,000
Most of these
revenues and visits
are from outside the
state of Kansas
Total Gaming Revenues By State and Distance
Miles AR KS MO OK Total
<15 miles -$ 10,035,003$ 1,301,184$ -$ 11,336,186$
15-30 miles - 1,438,478 3,765,200 10,956 5,214,634
30-40 miles - 1,809,611 1,427,572 15,030 3,252,214
40-50 miles - 712,560 745,702 90,718 1,548,979
50-60 miles - 1,139,613 941,264 171,325 2,252,201
60-70 miles 378,494 301,614 1,607,893 145,811 2,433,813
70-100 miles 1,820,245 1,466,097 10,276,719 9,161 13,572,223
> 100 miles 862,230 313,031 2,062,902 5,486 3,243,649
Total 3,060,969$ 17,216,007$ 22,128,436$ 448,487$ 42,853,899$
Total Gaming Visits and Spend per Visit By State and Distance
Miles AR KS MO OK Total Avg Win/Visit
<15 miles - 169,726 21,820 - 191,545 59.18$
15-30 miles - 24,302 64,465 199 88,966 58.61$
30-40 miles - 24,019 18,454 265 42,738 76.10$
40-50 miles - 7,188 8,565 1,451 17,203 90.04$
50-60 miles - 11,113 10,414 2,763 24,290 92.72$
60-70 miles 5,481 2,611 12,964 2,454 23,510 103.52$
70-100 miles 26,218 9,518 62,727 167 98,630 137.61$
> 100 miles 8,700 3,159 20,816 55 32,730 99.10$
Total 40,400 251,635 220,224 7,354 519,612 82.47$
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Kansas Crossing - Key Takeaways
History of Sound Forecasting Methodology
Monopolistic Location
Positioned to Drive visitation from Underserved Markets
$45MM of gaming revenue and $12 MM of gaming taxes by year 3
~268,000 visitors and ~$26.0MM from out of state
25. Experienced gaming resort developer, operator and investor
Developed four ground-up casinos that attracted new visitors into region
Properties generated strong economic activity and benefits to
regional market and government
27. EXECUTIVE TEAM
JONATHAN SWAIN
Previously Chief Operating Officer of Peninsula Gaming, LLC
NATALIE SCHRAMM
Previously Chief Financial Officer of Peninsula Gaming, LLC
BRENT STEVENS
Previously Chairman and Chief Executive Officer of Peninsula Gaming, LLC
28. Developed, owned, and operated
gaming properties in Iowa, Louisiana,
and Kansas
Sold five properties to Boyd Gaming
in November 2012 for $1.45 billion
MIDWEST MANAGEMENT TEAM
29. • Delivered among the best results in the industry to shareholders
• Our team members were recognized for Best Customer Service and as
Friendliest Casino Employees 11 years in a row
PENINSULA GAMING HISTORIC PERFORMANCE
60. COMMUNITY ENGAGEMENT
PROGRAMS AT KANSAS STAR
“This is an outstanding team to be working on the Kansas Crossing
project in Pittsburg. They are a group of dedicated professionals
who delivered on every promise that they made the City and
community. You are fortunate to have them submit a proposal
because frankly, they will actually make it work.”
Kent Hixson, City Administrator, Mulvane, Kansas
91. • Experience with Kansas Regulators
• Written Comprehensive Internal Controls
• Excellent Compliance History
• Communication with State Regulators
CONTINUED COMMITMENT TO
REGULATORY COMPLIANCE
We know that our license is a privilege and we’ll treat it that way every day
92. • Training
• Orientation
• Included in Department Training, Meetings
• Responsible Gaming Education
• On-Site Signage, Brochures
• In All Marketing Collateral
• Outreach
• SEKS Responsible Gaming Committee
• Work with Local Treatment Providers
INDUSTRY LEADERS IN
RESPONSIBLE GAMING
93. COMMUNITY
PARTNERSHIPS
• Local partnerships drive even more positive economic impact in the
communities where we operate.
• Our partnerships in Southeast Kansas will help continue to deliver on
our proven track record as an outstanding community partner.
94.
95. This partnership will provide the funding necessary to market to group
travel industry
• Promoting Area Attractions, Lodging and Amenities
• Tourism Showcase at Events, Networking and Group Sales
• Working Together, We’ll Attract New Visitors Which Will Account
for More Than $20 Million in GGR
96. Kansas Crossing will fund at least $500,000 over ten years to
support cultural events and entertainment
• Attract Additional Tourism Spending
• Improve Quality of Life for Local Residents
97. • Our commitment to purchasing goods and
services from local vendors
• Supports even more jobs for Kansans!
98. Kansas Crossing’s Partnership with Southeast Kansas Works includes:
• Advertising Available Positions
• Kansas Crossing Will Give Hiring Priority to Applicants from
Kansas
• Kansas Works will Recruit, Screen and Refer Applicants
• Veterans and their spouse and/or caregivers
• Underemployed/Unemployed and others
• Kansas Crossing will be a Southeast Kansas WorkReady
Certificate Champion
• Coordinate Pre-Job Training and Assessment
101. WHY KANSAS CROSSING?
• The Right Location, The Right Size
• Best Outcome for the Local Economy
• Direct Jobs for Kansans
• Commitment to Purchase Local Goods and Services
• Product Mix and Partnerships Maximize Tourism
• Best Outcome for Kansas
• Maximize Casino Revenue with Proven Track Record Marketing
and Operating Successful Regional Casinos in Competitive
Markets
• Viable, Sustainable Business Model
• Improve Quality of Life for Southeast Kansas Residents
• Experienced Regional Gaming Developer and Operator
