Global gaming responses to 12-7 meeting

Global Gaming KS, LLC - Lottery Facility Manager Application Form 400-01
Submitted to Kansas Racing and Gaming Commission on 17 September 2010, p. 33

Global Gaming Solutions, LLC & Global Gaming KS, LLC
Responsible Gaming Plan
• Global Gaming Solutions, LLC believes that informed and educated employees can be
a very effective tool in identifying many of the most serious consequences of problem
gaming.

• All employees will be trained on Responsible Gaming in Orientation. This will also
continue to be an ongoing training throughout their employment.

• All employees will be trained on current Global Gaming Solutions, LLC. Responsible
Gaming Training Curriculum along with any Responsible Gaming already in place by
the Kansas Racing and Gaming Commission.

• All Employees will also be trained on form 580-01 (Application for Kansas Voluntary
Exclusion Program for Problem Gamblers).

Responsible Gaming Objectives:
Our goal is to promote awareness, educate and train our employees on responsible
gaming by focusing on the areas listed below.

- Provide employee education through problem gaming training by
understanding what gaming is and isn’t

- Identify signs & symptoms of problem gamblers

- Understand management’s commitment to addressing problem gaming

- Understand the role of supervisors and employees in providing assistance to

a patron or a co-worker

- Awareness of Local and National Resources

- Problem Gambling in the Workplace

Global Gaming Solutions, LLC, p. 1

Responsible Gaming Plan (updated September 2010)


Empowerment:
- The management of Global Gaming Solutions, LLC. wants employees to
feel empowered in offering assistance to patrons and co-workers in need.

- Employees should share their observations and concerns with a manager or
supervisor.

Responsible Gaming Is:
- Meant to be fun, entertaining and recreation.

- Sticking to limits with regard to time and money. Not spending more than
you can afford to lose.

- Gaming that DOES NOT cause problems at home, on the job, legally or
financially.

- Gaming does not take the place of personal relationships.

- Gaming that does not become an obsession.

When gaming is not fun, entertaining or a recreation anymore,
chances are something is wrong!




10 Questions about Gambling Behavior:

1. You have often gambled longer than you had planned.
2. You have often gambled until your last dollar was gone.
3. Thoughts of gambling have caused you to lose sleep.
4. You have used your income or savings to gamble while letting bills go unpaid.
5. You have made repeated, unsuccessful attempts to stop gambling.
6. You have broken the law or considered breaking the law to finance your
gambling.
7. You have felt depressed or suicidal because of your gambling losses
8. You have borrowed money to finance your gambling.
9. You have been remorseful after gambling.
10. You have gambled to get money to meet your financial obligations.

If you or someone you know answers “Yes” to any of these questions, consider
assistance from a professional regarding this gambling behavior.



Section VI Attachment 3
Opening Marketing Plan by Global Gaming Solutions, LLC for Sumner County, Kansas

Purpose

The opening marketing campaign is designed to maximize exposure to the target market, i.e.
greater Wichita, Kansas, and a radius of 100 miles around the new casino. While some
programs can and will reach beyond that distance, one key goal will be to rapidly grow a strong
local customer base. The location of the facility, adjacent to Interstate 35 (the Kansas
Turnpike), means that significant marketing resources should and will be devoted to also
building a robust stream of ongoing transient traffic.

Another key objective of the opening campaign and the early months in operation will be to
establish the Casino complex as an exciting new destination in the region.

The gaming resort will offer a broad range of entertainment, relaxation, and recreation
activities. These include but are not limited to the many varieties of gaming, lounges,
restaurants, a hotel and live entertainment events. While most guest visits will be motivated by
one primary activity, the guest’s entertainment experience will be ultimately be judged by the
sum of the visit to the gaming resort. These visitors will determine their satisfaction with the
trip and, in turn, their desire to return for a repeat visit, not by whether they win or lose, per se,
but by the overall entertainment value created from the total experience.

We envisage a soft and grand opening with a marketing spend of $1 million for the activities
outlined below.

Competitive Considerations

The primary gaming competition within the 100-mile radius of the casino will come from Tribal
facilities south of the Oklahoma border on the I-35 corridor. The closest of these is
approximately 25 miles from the Sumner County site. These facilities, all of which are smaller
than the proposed Wellington complex, are operated by the Kaw Nation, the Otoe-Missouria
Tribe, The Tonkawa Tribe and the Iowa Tribe of Oklahoma.

Global Gaming Solutions’ experience marketing to patrons along the I-35 corridor is that while
many customers of existing nearby casinos will give the new facility a try, over time most
patrons that are local to those existing facilities will remain part of their loyal customer base.
That is why this marketing plan will direct most resources to the target greater Wichita market
and attracting patrons travelling on I-35.

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The Product

The new casino will initially offer a full range of gaming options, with 1,300 slot machines, video
poker, and table games, including blackjack, poker, craps and roulette. The slots will feature
the latest and most successful games from all major manufacturers--IGT, WMS, Aristocrat,
Konami and more. The facility is being planned to allow for growth, with available space for up
to 2,000 slots and to nearly double the amount of gaming tables.

Global Gaming Solutions partners with some of the leading food service, hotel and travel
facilities providers so that the complex will incorporate, on day one, branded food service
options and a brand name hotel. The plan also includes the capability of opening a second
contiguous hotel as the business grows and demand increases.

The first class showroom will offer a steady stream of entertainment, from contemporary, rock
and country music stars, to competitive boxing cards, to seminars and other special events.

With the full support of an enthusiastic local community, it is anticipated that the area nearby
the new casino will rapidly be developed with additional amenities—ideas for a travel plaza and
a speedway are already being floated—that will further enhance the entertainment value of
this new “destination.”

Grand Opening / Soft Opening

Management plans to open the new facility in a “soft” manner, where there is limited pre-
opening media advertising. While there would be a coordinated newspapers/billboards
branding campaign in front of the soft opening, the larger, full scale advertising media blitz
would occur in support of a Grand Opening about 90 days later.

This allows for an adequate period of time to “get the kinks out” of the operation, where up to
80% of the workforce is new to their jobs and the multiple divisions of the facility can be stress
tested. In our experience, this is the most effective way to open a new gaming venue. The
early returns will still be outstanding with the limited advertising enhancing the publicity that
the excitement of opening the new casino generates.

Patrons visiting the facility during the soft opening period will have a wonderful time as the
staff becomes comfortable in their roles at the rapidly growing, multi-venue destination.
Midway through the soft opening period, the full scale media campaign will get underway,
leading to a spectacular Grand Opening. By that time, the facility and staff have the inevitable

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opening learning curve out of the way and larger numbers of patrons are sure to have a most
positive experience when they visit.

Marketing Outline

Objectives:

• Generate Awareness and Brand Recognition in the market and region

Position the Casino as a partner to the community

Position the Complex as an entertainment destination throughout the region

Plan aggressive events schedule during first six months of operation

• Build Players’ Club Interest during Pre-Opening and Soft Opening periods

Distribute 10,000 Players’ Club Cards locally prior to Soft Opening

Use mail or other targeted media to distribute 20,000 additional during Soft
Opening

• Identify and Utilize Business Partners to generate energy and awareness for opening

Partner with Chamber of Commerce and local travel related businesses

Utilize I-35 Corridor marketing opportunities

• Build local pool of prospective Casino employees and conduct employee recruitment
campaign

Use local office and web-site to launch applicant database

Conduct multiple job fairs (local and elsewhere) four months prior to opening

Public Relations:

• Engage local media and community leaders to distribute news and other information

• Create & Maintain Publicity/Public Relations Office

• Create an Internet presence as a key Public Relations and Marketing Tool

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• Fully functional web site for distribution of information, Players’ Club recruiting, etc.

• Web site to include news media center for distribution of releases, photos, video,
etc.

• Create and maintain social media presence—Facebook, Twitter, etc.

• Establish web-phone applications for information and entertainment

• Provide updates on progress through publicity releases, web site releases, etc.

• Distribute Press Kits for key events such as Groundbreaking, Soft Opening & Grand
Opening

• Educate the local community as to the benefits the Casino Destination will bring to the
area

Jobs
Roads and other infrastructure improvements
Encouraging tourism
Building customer traffic to local businesses

Events

• Groundbreaking Ceremony and Celebration

• Host Job Fairs in conjunction with community to fill 1,000+ Casino, Restaurant, Event
Center & Hotel positions

• Sponsor Golf Outings and other events in conjunction with local community

• Host special pre-opening Early Member night as a preview for early signups

• Host an exclusive Invitation-Only VIP Night for key suppliers, supporters, local business
leaders, etc.

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• Grand opening and on-going entertainment events. Please see attachments for a list of
performing artists that we can contract on a regular basis, along with a list of actual
performance concerts that were held at our Riverwind Casino in the last 12 months.

Community Partnership

Objective: To work with the city of Wellington and Sumner County to become a valued
member of, and make positive contributions to, the community.

• Contribute to Sumner County economic growth

• Job training/solicitation partnership with applicable local education facilities

• Partnership with Wellington Chamber of Commerce to promote tourism

• Partnerships with existing local entertainment and retail businesses

Recruitment

• Generate awareness among residents of Wellington and Sumner County of the
opportunities and benefits of working in the Casino, Restaurants, Hotel and Events
Center at the new Complex

• Utilize advertising media, social media, online job boards and the website to support
recruiting initiatives

Casino Gaming positions – Pit Bosses, Slot Managers, Dealers, Croupiers, Slot Hosts, etc.
Casino Support Positions – Security, Technicians, Valet Services, Human Resources,
Finance, etc.
Food & Beverage services – Hosts/Hostesses, Waiters/Waitresses, Cooks, etc.
Marketing & Players’ Club positions

• Staff and train team members in advance of the Soft Opening

Utilize extensive Tribal training resources to provide a robust education and training
program
Recruit and train staff to provide superior customer service in all areas of the operation

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Promotions

• Solicit Players’ Club signups during Pre-Opening and Soft Opening periods

• Utilize interactive contests via website and social media to promote brand awareness
and excitement

• Use website, social media and local partners to build e-mail addresses database

• Enhance web search engine visibility via key advertising and placement vehicles

• Wherever possible partner with suppliers and local businesses for Opening and ongoing
promotions

• Establish sponsorship and or improvement plan with local golf course

• Sponsor local events in Wellington & Sumner County

Direct Mail

• Create advertising and marketing campaigns to generate Opening awareness and
excitement

• Feature the strongest amenities of the property:

The latest and most popular slot machine games
A complete assortment of table games
Multiple restaurant, sports bars and other food options
World Class Event Center featuring scheduled entertainment
Comfortable brand name hotel at the Casino

• Use market research to determine most effective messages and then direct mail and
online resources to deliver

• Focus inner market promotional message on gaming product, restaurants and special
events

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• Focus outer market message to promote gaming, special events and hotel

• Create a special database to target group sales opportunities, bus lines and tour
operators

• Work with local businesses and Chamber to enhance target lists

Advertising

• Create brand awareness interest and excitement leading up to the Soft Opening
through:

o Outdoor Advertising Packages – Billboards, including a “Coming Soon” flight near
the Casino

o Newspaper Advertising – Teaser campaign directing readers to website and/or
call center

o Light radio and or TV presence in support of Pre-Opening campaign

• Roll out large Grand Opening campaign 30-40 days prior to spectacular Grand Opening
Weekend

o Replace pre-opening Billboards with “Now Open” message and Grand Opening
promotion

o Ongoing Newspaper campaign driven by special events and promotion schedule,
including a special insert in Wichita Eagle and Wellington Daily News on the
weekend prior to Grand Opening

o Purchase large radio and TV packages to run in 10 days leading up to Grand
Opening

o Hype website address/Players’ Club offers in all radio and television advertising

• Communicate concise, consistent messages focusing on:

o The exciting and convenient new entertainment destination

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o The largest Casino in the region with the latest, most popular games

o Great Food, Brand Name restaurants and sports bar

o Live entertainment in the Casino, and

o Celebrity concerts and special events in the World Class Showroom

Internet Presence

• Create easy-to-use website and purchase search engine and other online advertising to
direct people to the site

• Feature the website address in all marketing materials and advertising venues

• The site would include six distinct main menu selections:

1. The Players Club Interface for signups and ongoing support
2. The Gaming Options – The latest and most popular slots, video poker, Blackjack,
Poker Room, Craps and Roulette
3. Showroom Special Events with link to ticket/reservations interface
4. Promotions Schedule
5. The Hotel – with link to online reservations mechanism
6. Hospitality options with separate sections featuring:
Restaurant/Buffet
Sports Bar
Casino Center Bar
Food Court options

Summary

Global Gaming Solutions, LLC, its business partners, investors and management, are committed
to creating a first class entertainment destination in the heart of Sumner County. In support of
that commitment, we are dedicated to providing the substantial resources necessary to
execute the Pre-Opening and Soft Opening marketing plans we have outlined here.

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We will build and nurture a strong partnership with the local community, supporting local
endeavors and maintaining constant open channels of communication with the people of
Sumner County.

We intend to be a true partner to the city of Wellington and will work in concert with local
officials, local businesses and citizens of Sumner County to improve the community, provide job
opportunities, contribute to improved infrastructure, promote tourism and attract future
economic growth in the region.

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Examples of talent available for concert and performance booking at this current time.

Oldies...

The Temptations

Herman's Hermits

The Four Tops

Oldies Pop...

KC and The Sunshine Band

Kool and The Gang

The Commodores

Al Green

Classic Rock...

Three Dog Night

38 Special

REO Speedwagon

Styx

Forigner

Joan Jett

Blondie

Creedence Clearwater

Peter Frampton

Air Supply

America

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Heart

The Doobie Brothers

Classic country...

Kenny Rogers

Charlie Daniels Band

Clint Black

Oak Ridge Boys

Randy Travis

Wynonna

Country

Sara Evans

Josh Turner

Tracy Lawrence

Dierks Bentley

Gary Allan

Gretchen Wilson

Bill Engvall (comedy)

Billy Currington

Joe Nichols

Kellie Pickler

LeAnn Rimes

Montgomery Gentry

Dwight Yoakum

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Travis Tritt

Willie Nelson

Pop

Kenny Loggins

Mike McDonald

Chris Issak

Huey Lewis and The News

Current Pop

Train

Better Than Ezra

Gin Blossoms

Everclear

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Talent appearing at Riverwind in the last two years:

2009 Riverwind Casino Entertainer Acts

Tony Bennett Cheap Trick

Percy Sledge The B 52's

Foreigner Merle Haggard

Travis Ledoyt Lee Ann Womack

Hermans Hermits Tracy Lawrence

Willie Nelson Rodney Atkins

George Jones Ingrid Hoffman

Starship Gin Blossoms

Ricky Skaggs Johnny Rivers

Cross Canadian Dionne Warwick

Sinbad Heart

Glen Campbell Dierks Bentley

Asian Night Melissa Ethridge

Oak Ridge Boys Kevin Fowler

Billy Squire Brian McKnight

Tracy Lawrence 4 Tops

Michael Bolton Pat Green

BoyZ II Men Asian Night

Gene Watson Bonnie Raitt

Ron White Randy Travis

Patti Loveless Little Big Town

Jewel Gary Allan

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Creedance Chubby Checker

Neil Sedaka Kenny G

Rat Pack Tribute

2010 Riverwind Casino Entertainer Acts To-Date

BB King Roberta Flack

UFC Fight Merle/Kris

Travis LeDoyt One Night Of Queen

Larry The Cable Guy Mel Tillis

Asian Night Gary Allan Cancel

Eli Young Band Josh Turner

Joe Nichols Moe,Gene and TG

Jeff Foxworthy Gary Allan

Diamond Rio Reo

Gavin Degraw Darius Rucker

Temptations Ronnie Milsap

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Global Gaming Solutions, LLC and Emerging Brands Inc are dedicated in ensuring the
responsible use and sale of alcohol

Emerging Brands is a strategic business partner of Global Gaming Solutions, LLC.
Emerging Brands has 15 years of experience in the management and operation of
restaurants, pubs, and eateries where alcohol is served and consumed. In the process,
Emerging Brands have strictly adhered to the “TIPS” policy on alcohol sales.

We have repeatedly disclosed our intention to have Emerging Brands operate the day‐
one, six food and beverage outlets at WinSpirit Casino and Destination.

As such, we intend to apply Emerging Brands’ “TIPS” policy and adapt it to comply
with applicable local and state regulations in Kansas.

The “TIPS” program stands for “Training for Intervention ProcedureS.” This program is
run by a company called Health Communications, Inc. of Arlington, Virginia. “TIPS” has been a
global leader in education and training for the responsible service, sale and consumption of
alcohol. “TIPS” is a skill based training program designed to prevent intoxication, underage
drinking and drunk driving. The classroom training is based on building of each individual’s
fundamental skills.  The “TIPS” trainers provide the knowledge and confidence the attendees
need to recognize potential alcohol‐related problems and how to effectively intervene.

Emerging Brands Inc has three TIPS trainers on our management team, one of whom is
fluent in Spanish.  We have been teaching “TIPS” training for over 10 years throughout our
company. We feel so strongly about this program that we train all our managers, servers, host,
and bartenders with the “TIPS” program even though it is not required by the state.

Our goal is to instill confidence in our team members when dealing with alcohol related
situations. The training staff engages participants in a dynamic exchange of ideas and personal
experiences to help everyone learn in the classroom.  Classes are taught in three different
stages, informational, skills training and practice/rehearsal.  TIPS classroom training is designed
to give all the participants an opportunity to learn on all different levels.  Each individual will be
given a closed book test and required to pass in order to be TIPS certified. The TIPS certification
is good for three years and is a nationally recognized program.

Additional Matters for Review Board’s Consideration Attachments and Supporting Information
08 December 2010 p. 1

December 8, 2010

Mr. Patrick Martin

Interim Director of Kansas Racing and Gaming Commission

700 S.W. Harrison, Suite 500

Topeka, KS  66603‐3754

Dear Patrick:

In the December 7th Lottery Facility Review Board’s conference call, Chairman All asked that applicants
provide any additional market studies, data or other information we believed to be relevant to the
revenue projections in the South Central Zone.

We have filed here additional market research including a case study from Worth County, Iowa; a
second poll of Wichita residents; research from Lang Research of Canada; and KDOT/ KTA actual traffic
data. We have also filed actual data from our Riverwind Casino below.

We would ask the Review Board to carefully review the case of Worth County, Iowa.  In 2005, Cummings
and Associates did a market study for the Iowa Racing and Gaming Commission evaluating the revenue
potential at that location.

In that case, we have both the study and actual results to compare.  Comparison results show that
actual revenue generated was double that of the Cummings original projections. As you will see in the
attached CBRE analysis, there are stark parallels between Worth County and Sumner County.  The CBRE
analysis is attached.

We have strenuously argued that the Cummings model is flawed in certain circumstances, and brings a
result that is skewed.

We maintain our position that there is not a material revenue difference between Exit 33 and Exit 19.
Not all information presented here has previously been provided to the Consultants or to the Review
Board. We request that this information be forwarded to the individual members of the Review Board.

To begin with, Cummings has acknowledged the following three points:

1. Our analysis on deconstructing his Gravity Model and what drives the gravity model
assumptions is accurate
2. If you believed CBRE’s analysis of factors in the model that drive revenue differentials, then you
would conclude as CBRE did that material differences attributable to a competitor’s
attractiveness do not exist.
3. NO changes have been made to the Cummings Gravity Model since its use in the Sumner County
bids in 2007/ 2008.

These points are fundamental to the analysis that follows.


The Cummings Gravity Model attributes revenue differentials between Exit 33 and Exit 19 to two broad
assumptions, these being: (1) incremental distance between the exits, and (2) relative competitive
attractiveness of Northern Oklahoma tribal facilities.

In 2008, the Cummings model projected a 23% revenue difference between a site at Exit 19 and Exit 33.

This year the differential appears to be 27%, though no changes in the model have been disclosed. We
do believe that Cumming has made a change in how he calculated traffic intercept, at Exit 19 from the
previous year which may account for some of the difference. As we previously discussed,
approximately half of the percentage difference can be attributed to distance (the extra 12 minutes to
Exit 19), and the other half is attributed to the relative attractiveness of competition.

Sometimes the common sense approach should prevail.  The Cummings model assumes that “revenue
declines by 38% as distance from the population center doubles”.  What if one casino was 1 mile from
the population center and was projected to generate $100 million?  Would a site one mile further away
generate only $62 million?

Distance matters, but common sense perspective on the distance differential would produce a much
smaller percentage difference (perhaps reducing this gap to closer to 5%) having regard to real human
behavior and the travel behavior of people in the Midwest. In other words, 12 minutes does not result in
the rate of decline in revenue that is suggested. We believe the Worth County, Iowa results justify that
position.

Testing the distance relationship in the South Central Zone is complicated.  There is no real world
situation you can look at that provides actual data to prove the Cummings model is accurate (or not),
except for possibly Worth County.  The distance relationship used by Cummings was created by market
research (a survey) in Mississippi. Additional analysis involved reviewing player’s club data. Both of
those approaches require a lot of interpretation, and have some clear short comings. (See the original
CBRE report.)

Given that we know something is wrong in the Cummings Model’s application in Iowa, we think it is
reasonable to ask Wichita residents whether distance really matters and how much.  CBRE suggested
that we get some direct market research through a poll of Wichita residents.  While it isn’t perfect, any
data provides information that is valuable.

Polls are used to predict behavior all the time.  In election polling there is immediate feedback with
empirical data (called election results).  Jayhawk Consulting has a strong track record of success in
polling public attitudes in the Wichita Market.

While not perfect, the local market research provides a reasonable measure of the public attitude on
the issue of distance and its impact on gaming revenues, which gives us some alternative guidance as to
the impact distance has on visitation.

The original poll used registered voters who had voted in the last two elections.  Jayhawk Consulting
suggested using that sample basis because in they found that the results were more reliable than a
sample using the general public.  The complete polling data, and results are provided as an addendum.


Jayhawk Consulting found that there was little or no difference in attitudes regarding an additional 10
minute driving time to a local casino.

“We can say with complete certainty and professional confidence that … there would be no real
difference in the number of gamblers, or amount of gambler participation, with a casino
location difference of 10 minutes travel time.”

Questions have been raised about the decision to limit the sample to registered voters in the Wichita
area and whether that sample would accurately reflect the general public attitude on the issue at hand.

An additional suggestion was the sample size was inadequate although Jayhawk Consulting concluded
that it is statistically valid. A final suggestion was that these consumers cannot predict their own
behavior and that models are therefore more accurate.

However, to test the assumption of any bias by registered voters, to address the question of sample
size, and to see if material differences exists in consumers trying to predict their own behavior, a second
poll was conducted on the weekend of December 4th. This poll focused on the general public (not just
registered voters) with a further sample of 400 consumers, another sample regarded as statistically
valid. The results are strikingly similar to the first poll and support the first poll’s conclusions.

Both poll surveys by Jayhawk Consulting are appended to this document.

Registered Voters General Public
Gambled in the last year 21% 18%
Would Visit a casino 20 27% 34%
minutes south of Wichita
30 Minutes south of 26% 33%
Wichita
Average Visits 20 minutes 8.18 4.87
Average Visits 30 Minutes 8.16 4.65

The comparison of these results brings some very interesting information.

There are some significant differences in the profile between frequent voters and the general public. But
both polls suggest that distance is not a major issue in the minds of both groups. There are hints in the
data that suggest that distance does matter, but not as much as the Cummings model assumes.

For example in the frequent voter poll, the percentage of people who would gamble at the facility 30
minutes away dropped by 1% point.  That suggests a distance impact of 3.7%.  In the general public
sample the same 1% drop occurred.  That suggests a distance impact of 2.9%.

The average visits data also carries a suggestion of a distance factor in the general public polling data.
The decline of 0.22 in average number of visits (between 20‐minute and 30‐minute travel times) would
suggest a distance impact of 4.5%.


This is consistent with our belief that the distance factor, based on our market experience, is
approximately 5%.

The polling did not limit participation to those people who had gambled in the last 12 months, rather it
included anyone who indicated that they would likely gamble at a casino.

We have also provided data from our Riverwind Casino property located on I‐35 highlighting the
majority of customers travel in excess of 25 miles (or 30‐minute travel time) from the metropolitan area
of Oklahoma City to this facility. This is despite the customers having closer alternatives.

Oklahoma City Central Business District is located at the intersection of I‐35 and I‐40.

Within 100 miles of this central location there are 42 casinos in Oklahoma. As discussed we own
Remington Park, Newcastle Gaming, Goldsby Gaming and Riverwind Casino.

The following are distances to the closest casino properties to Oklahoma City (OKC) and the direction
from the above intersection:

1. OKC to Remington Park – North on I‐35, 10.3 miles (clean drive on I‐35)
2. OKC to Lucky Star – West ‐ Northwest, 32miles (clean drive)
3. OKC to Firelake Grand Casino – East on I‐40, 26.6 miles (clean drive on I‐40)
4. OKC to Riverwind – South on I‐35, 22.25 miles (congested drive on I‐35 through Norman)
5. OKC to Newcastle Gaming – Southwest ‐ 22.4miles (clean drive via freeway to west)
6. OKC to Goldsby Gaming – South on I‐35 next to Riverwind Casino, 23miles (congested drive on I‐
35 through Norman)

Seventy percent of customers in our player tracking data base come to Riverwind Casino from North of
I‐40 or farther away than 25 miles or a typical drive time of 30 minutes. If I‐35 is congested through
Norman, this drive time will be longer. This means they appear to choose to go to Riverwind Casino even
though getting to Remington Park would be the closest or Firelake (with some similar amenities to
Riverwind Casino) would take less time and the minimum distance is 22.25 miles. This result is despite
numerous competing facilities which is not the case in Sumner County.

This practical data supports our assertion that drive time and distance from Wichita on an easy I‐35 run
to Exit 19 does not diminish the propensity of gamblers to attend the facility in material ways as
suggested by Cummings.

We also supplied CBRE’s analysis demonstrating that the relative attractiveness of Northern Oklahoma’s
tribal gaming facilities was overestimated in the Gravity Model analysis, and if adjusted results in a
significant reduction in the revenue differential between Exit 33 and Exit 19. These adjustments were
attributable to overestimating the Power Rating of slots and several other factors.

Cummings has acknowledged that if you believe the adjustments by CBRE to Cummings’ assumptions
used to drive the revenue calculations in the Gravity Model, then this conclusion is correct.  A copy of
this report was previously provided and is titled: “DISPROVING THE EXIT 33 MYTH: Exit 19 the Best Bet
for Kansas”.


Essentially, Mr. Cummings is saying in his assumptions on attractiveness that the Oklahoma tribal
casinos are better than ours.

In response, we draw your attention to a foot note in Cummings’ own study this year in the
South Central Zone:

Footnote 6, on page 15 (of 90) of the Cummings report:

“I will cite, as I did in 2008, casinos like the Eastern Shawnee Travel Center, Peoria Gaming Center and
Little Turtle Facilities in Oklahoma.  These are ugly little “gasinos,” right next door (in two cases) to
physically much more attractive full‐scale casinos (and just down the road in the third case), but they
were all packed with customers when I visited.  They clearly offer the gaming experience that many
players desire.  I am therefore cautious in discounting the ability of less‐physically‐attractive casinos
to compete against those with more glitz.”

This footnote suggests that the “Gasinos,” or as we call them Travel Plazas, compete directly and
successfully against a much larger and nicer casino next door.  As we have discussed in great detail, we
operate travel plazas as an amenity targeted to an entirely different market which greatly enhances our
total revenue picture.

This causes Cummings to make an attractiveness assumption that is inappropriately higher than justified
in the market.

This demonstrates a minimal understanding of the I‐35 corridor and the distinctive nature of that
market.  Richard Wells notes in his revenue study that the customers of a travel plaza are not accounted
for in the gravity model.  Those customers are travelling through the area and do not show up in
population estimates.

Cummings attempts to equate customers of a travel plaza to the general population within the area,
which is an inaccurate association. As a result, he applies a higher than appropriate attraction factor to
tribal casinos in Oklahoma, which skews his assumptions in his revenue projections.

Wells assigned an incremental revenue adjustment for the travel plaza of $5 million and 100,000
visitors.

Cummings appeared to assign a travel plaza revenue adjustment of $2.9 million and 20,000 visitors.
That adjustment, however, also included a deduction of $2.2 million because our project did not include
direct access.  However, in reviewing the Cummings projections for Marvel Gaming, Penn Gaming and
the Generic Casino at exit 19 in 2008, both projects were given $5.9 million in a traffic intercept estimate
called “frontage traffic.”  Neither the generic casino, Marvel Gaming or Penn gaming had direct access
proposed at the time those projections were made.  None of the previous exit 19 applicants proposed a
travel plaza type development.

This was a change in the methodology used in the previous round.  The methodology change means the
actual incremental value Cummings placed on the travel plaza was actually $700,000 in revenues.


The results of the Cummings Iowa study strongly suggest that the attraction factors used in the Kansas
study are flawed.

I‐35 is an important economic engine for development in Kansas and Oklahoma. Literally, millions of
dollars of economic opportunity drives up and down the corridor.  Using traffic data from the southern
border of Kansas, approximately 14,000 vehicles a day enter or leave Kansas via I‐35.

This means approximately 8 million people in cars and trucks drive by Exit 19 every year. That
population base is larger than Dallas‐Fort Worth. It is also a population base that the gravity model
will never successfully predict.

Development of full service travel facilities that offer a wide range of food, competitive fuel prices, and
other comfort amenities is a tool that has generated millions of dollars in gaming revenues for the
Chickasaw Nation.

The strategy for our proposed Travel Plaza involves robust services for travelers. It also involves
deployment of gaming machines to match the market place, including truckers – who we like to call the
“high rollers” of the highway.

Our Travel Plaza development is planned for Year‐3 to allow time for the main facility to be fully up and
operational and traffic patterns established. We have an agreement with the Kansas Turnpike Authority
that we would not open the Travel Plaza until after our direct turnpike access is fully implemented and
operational.

In collaboration with CBRE, and use of data specific to our Travel Plaza operations, we project the total
traffic capture gaming revenues at the facility will exceed $10 million p.a. conservatively.

We advised the Review Board that we counted over 300 trucks parked nightly near our proposed
location, stopping under federally mandated rest requirements. The truck drivers will stop where they
have the capacity and the best amenities. This count represents roughly 7.5% of the total daily truck
traffic on I‐35 alone (total count is 4,060 trucks daily) and even excludes truck traffic on Highways 160
and 81. Again, we previously provided the traffic data from K‐DOT and KTA. This data is appended to this
document.

To put that in perspective, using our projected daily win per patron, the 300 trucks that are already
stopping in the immediate area would be the equivalent of $7 million in gaming revenues. In addition,
for each 100 cars representing 150 patrons (1.5 passengers per car) would account for an additional
$3.5m in gaming revenue in its own right.

As casual travelers stop at our facility, we also expect to add them to our players club data base and will
use that data to build a customer base that extends beyond traffic intercept.

Finally, the analyses by both Wells Gaming Research and Cummings’ credited us with more incremental
gaming revenue by the Travel Plaza than the Equestrian Center by Peninsula Gaming.


We have also included analysis by CBRE supported by research by Lang Research, Canada, highlighting a
34.3% premium in visitation spending by customers of our proposed auto sports facility v. Peninsula
Gaming’s proposed Equestrian Center. This analysis has also been provided to the Consultants.

The table below highlights the effect of the above adjustments to the suggested revenue differential
between Exit 33 and Exit 19:

Basis of 2010 Bids In 2014 Dollars
($million)
Adjustments

Difference (as predicted 27% $50.9
by Cummings’ Gravity
Model) (Reported as 22% in
2007/ 2008 analysis
with same
assumptions. Why?)

Distance Exit 33 to Exit 19 14 miles.

In effect, the Gravity Model says that
gaming revenue declines by $3.6 million
for each mile, or $200,000 per 100 yards
(the length of a football field). This
prediction is not supported by market
research or by actual consumer behavior.

Adjustments:

‐ Attractiveness ‐ CBRE’s Analysis 8% $15.4
‐ Riverwind data

‐ Distance ‐ Two polls of 10% $19.2
Wichita
residents by
Jayhawk
Consulting

‐ Riverwind data

‐ Travel Plaza ‐ Actual data 7% $13.5

‐ Net Difference after 2% (negligible) $2.8m
Adjustments

In summary, if our adjustments are made as we our analysis clearly demonstrates,
the difference in revenue between Exit 33 and Exit 19 is a minimal 2% or $2.8m,
assuming that Peninsula Gaming selects Site A at Exit 33.

Finally, all of these differences are calculated assuming that Peninsula Gaming will build at Site A with I‐
35 access. It would appear to be a reasonable likelihood that given the current constraints with this site,
that Peninsula Gaming would have to utilize Site B which is located some two miles east of I‐35: in order
to maintain their proposed development timetable (having regard to planning needs, infrastructure
needs, zoning needs, and several outstanding legal challenges).


Attachments and Other Supporting Information:

1. Jayhawk Consulting Services, Report of Public Opinion Survey, conducted August 27 and
28, 2010.

2. Jayhawk Consulting Services, Report of Public Opinion Survey, conducted December 3,
2010.

3. CBRE’s Analysis of: Cummings & Associates Track Record in Generating Gaming Revenue
Projections in a Competitive Environment – Worth County (Iowa) Parallels with Sumner
County (Kansas).

4. “DISPROVING THE EXIT 33 MYTH: Exit 19 the Best Bet for Kansas”, 33‐page report
prepared with the assistance of CBRE.

5. Traffic Volume Map of major roadways in the vicinity of Exit 19 off I‐35, as provided by
Traffic Engineers Wilson & Company.

6. CBRE Analysis of Auto Racing v. Equestrian Visits with Lang Research Supporting
Information.

7. Information about CBRE’s Global Gaming Group and their casino industry qualifications



1) Jayhawk Consulting Services, Report of Public Opinion Survey, conducted August 27 and 28,
2010.

REPORT OF PUBLIC OPINION SURVEY
August 27 and 28, 2010
PURPOSE

Global Gaming Solutions (GGS) contacted Jayhawk
Consulting Services (JCS) to conduct a public opinion survey
to determine how voters in Wichita, Kansas feel about the
distance they would have to travel to attend a casino in
their area. Specifically, would they go to a casino located
30 minutes from South Wichita in the same numbers as they
would one only 20 minutes away. The following is the report
of the results of that survey. These results are
confidential between JCS and GGS. With the submission of
this report, these results become the property of GGS and
any release of the information herein is their
responsibility.

PROCEDURES

This survey was conducted by telephone on August 27 and
28, 2010. Calls were made from a list of voters, residing
in Wichita, Kansas who voted in the last two general
elections. Although this survey has no connection to an
impending election, we have found through the years that
interviewing frequent voters gives us a more reliable "feel"
of the total population. Frequent voters, almost by
definition, are more active citizens in their community and
more accurately reflect that community's attitudes regarding
the important issues of the day.

We completed a total of 400 interviews. This number
gives the survey results with a sampling error of
approximately plus-or-minus 4%.

1

RESULTS

First, have you, in the past year, gone to a casino to
gamble?

Yes - 21%
No - 79%

(IF "yes")How many times?

(The following are the actual responses, not percentages, of
the 83 persons who answered "yes" to the previous question.
The number in basic text is the number of times one had gone
to a casino, and the second (bold face) number is the number
of persons who made that choice.)

1 - 20 4 - 3 10 - 2 24 - 4
2 - 27 6 - 2 12 - 4 30 - 2
3 - 12 8 - 3 18 - 1 52 - 3

If a destination casino were located on Interstate 35, about
20 minutes south of Wichita, would you visit it?

Y - 27%
N - 64%
Not sure - 9%

(IF "yes")How many times per year, would you go?

(Again, the following are the actual responses of the 107
persons who answered "yes" to the previous question. The
number in basic text is the number of times one would go to
a local casino, and the second (bold face) number is the
number of persons who made that choice.)

1 - 8 5 - 7 12 - 8 50 - 2
2 - 26 6 - 3 15 - 3 52 - 3
3 - 16 7 - 6 20 - 4
4 - 15 10 - 3 35 - 3

2

If the casino were 30 minutes south of Wichita, would you
still be likely to visit it?

Yes - 26%
No - 64%
Not sure - 10%


the more-distant local casino, and the second (bold face)
number is the number of persons who made that choice.)

1 - 10 5 - 10 12 - 7 50 - 2
2 - 25 6 - 5 15 - 3 52 - 3
3 - 12 7 - 5 20 - 4
4 - 14 10 - 2 35 - 3

SUMMARY

First, we would note that about 1 in 5 (21%) residents
of Wichita attended a casino to gamble within the past year.
We have no frame of reference or recent past experience to
know if that is low, high or about the average for a Kansas
community.

Secondly, the percentage of people who would go to a
casino goes up, to 27%, if the casino is located about 20
minutes south of Wichita. This difference is significant,
statistically speaking, for a sample of this size. However,
we were a bit surprised that bringing the casino to within
20 minutes of Wichita only increased participation by 6
percent. In other words, reducing travel time from several
hours down to 20 minutes did not have the major impact on
participation that we had expected.

Thirdly, on a related matter, adding another 10 minutes
of travel time to get to the casino made no significant
difference in the amount of participation by the public.
Our results showed a drop from 27% to 26%, but that
difference is not significant as a statistical measurement.

There is one other comparison which we feel needs to be
made regarding the results of this survey. We know that
there is no difference between the number of participants as
it relates to the "20 minute" casino and the "30 minute"
casino. But what about the number of times they may attend?

3

Looking at the earlier question, would gamblers go less
often if the casino were further away? To determine the
answer to this question we developed what we will call the
"gambler participation" scale. It works like this - for the
"20 minute" casino, 8 people said they would go 1 time per
year, that equals 8 points. Also, 26 people said they would
go 2 times per year for 52 points, 16 said they would go 3
times for 48 points, and so on. Using the same procedure
for the "30 minute" casino, 10 said they would go 1 time per
year (10 points), 25 would go 2 times (50 points), 12 would
go 3 times (36 points) and so on.

Using this method for comparison, the "gambler
participation" score for the "20 minute" casino is 875, or
an average participation, per gambler, of 8.18, and the
similar numbers for the "30 minute" casino are 857 points
and an average, per gambler, of 8.16. We're not sure at
what point this difference would be significant, but surely
a difference of 0.02 on a factor total of about 8, must be
of almost NO validity.

ANALYSIS

We can say with complete certainty and professional
confidence that, based on our survey of 400 randomly-
selected Wichita voters, there would be no real difference
in the number of gamblers, or amount of gambler
participation, with a casino location difference of 10
minutes travel time. In fact, given the comparison of
participation currently, with as much as several hours
travel time, and the level of participation with a casino
practically in one's own "back yard", we could say with some
confidence that travel distance is of very low priority when
a gambler considers how much they will be involved.

We hope this information will be of assistance to
Global Gaming Solutions as you pursue your goals, whatever
they might be.

We appreciate this opportunity to be of assistance.
Please contact us with any questions you have about the
survey or this report.

4

Global Gaming KS, LLC Response to Review Board’s follow‐on questions


2) Jayhawk Consulting Services, Report of Public Opinion Survey, conducted December 3, 2010.

REPORT OF PUBLIC OPINION SURVEY
December 3, 2010
PURPOSE

Global Gaming Solutions (GGS) contacted Jayhawk
Consulting Services (JCS) to conduct a second public opinion
survey to determine how general public in Wichita, Kansas
feel about the distance they would have to travel to attend
a casino in their area. Specifically, would they go to a
casino located 30 minutes from South Wichita in the same
numbers as they would to a casino only 20 minutes away.

A second major purpose of this survey is to compare the
feelings of the general public with those of "frequent
voters" who were polled in an earlier survey. This will be
explained more fully in the "procedures" section, which
follows.

The following is the report of the results of this
survey. These results are confidential between JCS and GGS.
With the submission of this report, these results become the
property of GGS and any release of the information herein is
their responsibility.

PROCEDURES

This survey was conducted by telephone on December 3
and 4, 2010. Calls were made from a list of residents
located in Wichita, Kansas. As mentioned, in an earlier
survey, we interviewed only "frequent voters", those who had
voted in the last two general elections. Most of the
polling our company does is for candidates running for
public office. To best serve their needs, it is most
helpful to know how those who are likely to vote, feel about
their race. Our experience has shown us that the best
predictor of who will vote in the future, is those who have
voted in the past.

However, in this survey, we are not predicting the
outcome of a possible future election. Further, we have no
evidence of any correlation between the voting habits of a
person and their gambling activities, or lack thereof.
Therefore, our sample for this survey is the general
population without any further identification.

We completed a total of 400 interviews. This number
gives the survey results with a sampling error of

1

approximately plus-or-minus 4%.

RESULTS

First, have you, in the past year, gone to a casino to
gamble?

Yes - 18%
No - 82%

(IF "yes")How many times?

(The following are the actual responses, not percentages, of
the 73 persons who answered "yes" to the previous question.
The number in basic text is the number of times one had gone
to a casino, and the second (bold face) number is the number
of persons who gave that as their response.)

1 - 25 5 - 2 12 - 8 52 - 1
2 - 12 6 - 4 18 - 1
3 - 9 9 - 2 20 - 2
4 - 2 10 - 2 24 - 3

If a destination casino were located on Interstate 35, about
20 minutes south of Wichita, would you visit it?

Y - 34%
N - 52%
Not sure - 14%


a local casino, and the second (bold face) number is the
number of persons who made that choice.)

1 - 25 5 - 10 12 - 8 52 - 1
2 - 29 6 - 4 15 - 3 NS - 2 (*)
3 - 22 7 - 6 20 - 2
4 - 19 10 - 3 24 - 2

(*) No specific number of times

2

If the casino were 30 minutes south of Wichita, would you
still be likely to visit it?

Yes - 33%
No - 52%
Not sure - 15%


the more-distant local casino, and the second (bold face)
number is the number of persons who made that choice.)

1 - 24 5 - 9 12 - 9 NS - 2 (*)
2 - 33 6 - 4 15 - 3
3 - 23 7 - 4 24 - 2
4 - 15 10 - 4 52 - 1

(*) No specific number of times

SUMMARY

First, we found that, among the general public, about
18% had been to a casino within the last year. In other
casino polling we have done around the state of Kansas, we
would note that a participation rate of about 20% is very
typical of a Kansas community. Also, it compares closely
with a participation rate of 21% by frequent voters, a
number obtained in the earlier survey.

The percentage of people who would go to a casino if
one were located about 20 minutes south of Wichita is
considerably higher, at 34%.

Given these two responses, we can make the following
generalizations:
1. members of the general population are slightly less
likely to have gone to a casino within the last year than
"frequent voters" by a 18% to 21% margin;
2. but, members of the general public are much more
likely to attend a casino located in close proximity to
Wichita than are frequent voters, by a margin of 34% to 27%.
3. Also, though only 18% of the general population
currently go to a casino, on an annual basis, that number
jumps to 34% when the casino is located close to Wichita.

3

A second major comparison within the survey is whether
people would drive an extra 10 minutes if the casino was
located 30 minutes from Wichita as compared to one only 20
minutes away.

On the survey among frequent voters, they were just as
willing to drive the extra 10 minutes with a participation
response of 27% for the "closer" casino, and 26% for the one
further away. Clearly this is not a statistically
significant difference. On the current survey among the
general public, we got higher, but equally similar results.
In this group, 34% would go to the "20 minute" casino and
33% would still go to the casino located 30 minutes away.
Again, the difference is clearly within the margin of
sampling error.

In our earlier report, we presented our "gambler
participation" scale. It's a way of comparing not only the
number of people who might go to a casino, but includes the
number of times each of them might go. The scale is
calculated as follows: If in a particular group, 8 people
said they would go to a casino 1 time per year, that would
equal 8 points. Then, if 26 people said they would go 2
times per year, that would be 52 points, and if 10 said they
would go 3 times that would be 30 points, and so on.

Considering this survey of the general public, and
using this procedure for the "20 minute" casino, 25 said
they would go 1 time per year (25 points), 29 would go 2
times (58 points), 22 would go 3 times (66 points) and so
on. We arrived at a total of 652 points, or a per person
factor of 4.87. For the "30 minute" casino, the total was
609 points, or a per person factor of 4.65. Again, a
difference of 0.22 between the two factors is so close as to
represent no statistically significant difference.

There is, however, a significant difference between the
"gambler participation" scale for the general public,
averaging approximately 4.7 and the scale for the frequent
voters, averaging about 8.17. This demonstrates that
frequent voters would attend a casino more often than the
general public. One caution however, there was a span of
about 3 months between the time these two polls were done,
and economic, and other factors could have changed.

4

ANALYSIS

The results of this survey allow us to say with
complete certainty and confidence that the attitudes of the
general public, like those of frequent voters, show there is
no real difference in the number of gamblers, or amount of
gambler participation, with a casino location difference of
10 minutes travel time. There is evidence that frequent
voters are a little less likely than the general public to
go to a casino near Wichita, but among those who go, the
voters are more likely to go more often. This is something
we noticed based on a cursory review of the responses of
this survey. However, any specific data of value would
require further investigation.

We hope this information will be of assistance to
Global Gaming Solutions as you pursue your goals, whatever
they might be. We appreciate this opportunity to be of
assistance.

Please contact us with any questions you have about the
survey or this report.

5



3) CBRE’s Analysis of: Cummings & Associates Track Record in Generating Gaming Revenue
Projections in a Competitive Environment – Worth County (Iowa) Parallels with Sumner County
(Kansas).

CBRE’s Analysis of:
Cummings & Associates Track Record in Generating Gaming Revenue
Projections in a Competitive Environment – Worth County (Iowa) Parallels
with Sumner County (Kansas)

Based on a brief look at his prognostication record, Cummings &
Associates appears to be pretty accurate when it comes to projecting
gaming revenue for casinos with limited competition (Boot Hill in Ford
County and several monopolistic casinos in Iowa are good examples).
However, Cummings’ projections have in some instances proved wildly
inaccurate. In 2005, Cummings & Associates completed a report for the
Iowa Racing & Gaming Commission called “Analysis of Current Markets
for Casino Gaming in Iowa, with Projections for the Revenues and Impacts
of Potential New Facilities.” In the report, Cummings projected gaming
revenue from a Worth County casino of between $34 million and $39
million (in 2005$). In actuality, the Worth County casino has generated
gaming revenue of between $74.0 million in 2007 to $79.2 million in 2009.
The similarities between Worth County, Iowa and Sumner County, Kansas
are striking. First and foremost, both the casino in Worth County and
Sumner County are located with excellent access off heavily traveled
areas of I-35. In addition, the Worth County casino competes with 19 tribal
casinos across the border in neighboring Minnesota. Across the border
from Sumner County in Oklahoma are several tribal casinos. Both the
Worth County and Sumner County casinos will try to attract many of their
customers from a single metropolitan area. In the case of Worth, the
metro area is Minneapolis-St. Paul (located 110 miles to the North), and in
the case of Sumner, the metro area is Wichita.
After speaking with experts familiar with the situation in Iowa, it is likely that
much of the revenue disparity between Cummings’ projections and the
actual result is due to significantly greater amounts of gaming spend from
residents of Minneapolis-St. Paul and neighboring cities in Minnesota and
those driving by the facility on I-35. Spending from these customer groups
were not fully accounted for in the Cummings’ projection.
In the white paper that we have previously presented, we have discussed
in detail how the Cummings model is somewhat limited when factoring in
surrounding competition – especially in a situation where there is so much
in the way of competing casinos. It is very likely that the Exit 19/Exit 33
situation is one of those instances where the competition will not have as
great an impact on the Sumner casino as the Cummings would indicate.
The Sumner casino market is unique in that it faces different levels of
competition at varying distances and varying levels of quality. Although

Cummings claims that all his formulas and inputs are backed up by “real
world” empirical evidence, the projections that were made in Worth
County, Iowa certainly leave the door open for the possibility that some
exogenous variables can impact the projections.

Inputs in Cummings Worth County projections that could have caused the
discrepancy between projected and actual results:
• Understating the Impact of Having an Optimally Located Facility on
Interstate 35 – Market intelligence indicates that the traffic going
to/from Minneapolis along I-35 is helping generate “significant
amounts” of incremental revenue for the facility.
o Relevance in KS – It provides some anecdotal evidence that
a travel plaza would be a lot more powerful of a revenue
generator for a facility off I-35 than Cummings is projecting.
• Rate of decline of spending as distance is increased – On page 5 of
the Iowa report, Cummings says “This is a relatively “long-distance”
attraction; if you double the distance, revenues decline by about
38%. For comparison, race tracks generally exhibit distance
coefficients of about -1 to -1.2: if you double the distance, visitation
declines by 50% or more.”
o Relevance in KS – If the rate of decline is not as severe as
Cummings projected for Minneapolis residents going to Worth
County, the same could be true as it relates to Wichita
residents to Sumner County. Keep in mind, that a casino off
Exit 33 or Exit 19 will devote a similar majority of
marketing/advertising spend towards Wichita. A lower rate of
decline in spend, for Wichita residents, would lower the gap
between Exit 19 and Exit 33. This assertion has been justified by
the market data collected by Jayhawk Consulting Services in
August 2010 regarding Wichita residents’ attitudes towards
visiting casinos in Sumner County.
• Relative appeal factors – Were the Cummings appeal factors too
high for the Minnesota casinos relative to a Worth County casino?
For example, the Minnesota tribal casinos do not offer craps, and
the Iowa casinos do offer craps.
o Relevance to KS – If the same error were made in KS, more
revenue would be pushed from KS residents to the OK casinos
for either Exit 19 or Exit 33 even they are of a lower quality (at
least the ones along the border and they do not offer craps).
However, because of Exit 19’s closer proximity to OK,

significantly more revenue is allocated to the OK casinos than
Exit 33. If lower appeal factors were used for the OK casinos,
less revenue would be siphoned into OK thus narrowing the
revenue gap between Exit 19 and Exit 33.
• Spending Elasticity with Size – Did Cummings give too much credit
for the sheer size of the Minnesota casinos? The Minnesota casinos
have more than 15,000 slot machines compared to the Worth
County casino, which was only sized at with 520 slots and 18 table
games in Cummings’ projections. Using the Cummings model,
where the number of machines are weighted at close to a 1:1 basis,
virtually no Minneapolis spending would be directed to a Worth
County casino as collectively, the Minnesota casinos would be
about 30 times more attractive than a Worth County casino.
o Relevance to KS – If the same error were made in KS, more
revenue would be pushed from KS residents to the OK casinos
for either Exit 19 or Exit 33. However, because of Exit 19’s
closer proximity to OK, significantly more revenue is allocated
to the OK casinos than Exit 33. If lower spending elasticity with
size factors were used for the OK casinos, less revenue would
be siphoned into OK thus narrowing the revenue gap
between Exit 19 and Exit 33.

Figure 1 – Worth County, Iowa Competition Map

Note: There is a tremendous amount of competition to the north of Worth County casino
(signified by the blue star).
Source: CasinoCity; GGS estimates



4) “DISPROVING THE EXIT 33 MYTH: Exit 19 the Best Bet for Kansas”, 33‐page report prepared with
the assistance of CBRE.

DISPROVING THE EXIT 33 MYTH:
Exit 19 the Best Bet for Kansas

Prepared by:
Global Gaming Solutions, LLC in
Collaboration with CBRE.

October 2010

DISPROVING THE EXIT 33 MYTH

Table of Contents
The Problem Statement ................................................................................................... 4
The Participants ............................................................................................................. 4
Proofing the Problem ....................................................................................................... 7
Distance Is the Overriding Factor In Determining Casino Spend .......................... 7
The Attractiveness, Proximity and the Amount of Competition ............................ 8
Defining Piece of New Evidence ................................................................................. 15
Solutions ........................................................................................................................... 16
Summary of the Four Solutions .................................................................................. 16
The Resolution ................................................................................................................. 19
Appendix ......................................................................................................................... 20
Appendix #1 – Technical Analysis of Solution 1 ..................................................... 20
Appendix #2 – Technical Analysis of Solution #4 .................................................. 20
Appendix #3 Recreation of State Consultant Gaming Revenue Model for Exit
19 and Exit 33 ............................................................................................................... 24
Appendix #4 – Jayhawk Consulting Services Report............................................ 29

-2- October 2010

Index of Tables
Table 1 – Sumner County Competition Grouped by Geographic Zones
(Estimated as Projected in 2008) .......................................................................... 14
Table 2 – Revenue Difference After the Four Solutions (2007$ Millions) ................. 18
Table 3 – Scoeff Calculation Using the State Consultant’s Estimate – “Population
A” Example .............................................................................................................. 21
Table 4 – Adjusted Scoeff Calculation Using GGS Estimate - “Population A”
Example .................................................................................................................... 23
Table 5 – Recreation of State Consultant Model (2008$ Unless Noted) ................ 24
Table 6 – Recreation of State Consultant Model (2008$ Unless Noted) – Exit 19
Slot Spend Detail ..................................................................................................... 25
Table 12 – Recreation of State Consultant Model (2008$ Unless Noted) – Exit 33
Slot Spend Detail ..................................................................................................... 27

-3- October 2010

The Problem Statement
The problem this white paper explores is that in 2008 one of the State’s
consultants implied there was a 23% revenue gap between essentially identical
destination casinos off Exit 19 and Exit 33, respectively.

The Participants
Global Gaming Solutions
Global Gaming Solutions (GGS) is an experienced casino developer and
operator. The entity is best for known for its two highly successful casinos located
off Interstate 35 in Oklahoma. One of those casinos, WinStar, is the third largest
casino in the world, proving that the entity has experience in developing and
operating multi-million dollar destination casinos.
GGS’s expansive knowledge of running casinos on the I-35 Corridor has
provided it with the knowledge to create the amenities and marketing
philosophies that maximize both revenue and the customer experience.
GGS is seeking to construct and manage on behalf of the State the casino in
the South Central Gaming Zone off Exit 19.

The State of Kansas
In 2008, the KS legislature passed SB 66 – The Kansas Expanded Lottery Act. SB 66
authorized up to four state-owned casinos in four gaming zones: 1) the
Northeast Zone, which consists of Wyandotte County; 2) the Southeast Zone,
which consists of Cherokee or Crawford counties, 3) the South Central Zone,
which consists of Sedgwick or Sumner counties, and 4) the Southwest Zone,
which consists of Dodge County. Slots at the State’s racetracks were also
permitted. This paper focuses solely on the state-owned casinos, and the South
Central Zone specifically.
In each county within the gaming zones, a local referendum was held to allow
voters a choice to allow casinos or not. All counties in the State voted to allow
casinos except for Sedgwick County. That meant the South Central license
could only go to Sumner County.

The Kansas Lottery Commission
The Commission is charged with setting up the procedures for, and entering into,
gaming facility management contracts with third party entities. In addition to
managing the casinos on behalf of the State, the winning third party entities
would also construct the facilities.

-4- October 2010

The Kansas Lottery Kansas Lottery Gaming Facility Review Board (KLGFRB)
The independent KLGFRB was appointed by the Governor, Senate and House of
Representatives to evaluate potential gaming facility managers. SB 66 says the
Board may employ any experts, consultants or other professionals at the
expense of a prospective gaming facility manager to provide assistance in
evaluating a lottery gaming facility management contract submitted to it.

Past Gaming Facility Manager Applicants
In 2008, Harrah’s Sumner Gaming, Penn Sumner LLC, and Marvel Gaming
formally submitted applications to be the gaming facility manager in the South
Central Gaming Zone. Both the Penn Sumner and Marvel Gaming proposals
were off Exit 19, while the Harrah’s Sumner Gaming proposal was located off Exit
33.

State Consultants
In 2008 and again in 2009, the KLGFRB retained Cummings & Associates, among
other consultants, to explore the gaming revenue potential for the South Central
and three other Gaming Zones. In this paper, Cummings & Associates is referred
to as the “State’s consultant.”

State Consultant Reports
Several times throughout this analysis, reference is made to reports that were
previously conducted by Cummings Associates for the State of Kansas and
other clients. The three main reports referenced are as follows:
• Cummings Associates, Casinos’ “Gravity” According to Reilly – Amended,
May 25, 2006
• Cummings Associates, Projections for the Market Potential of the Four
Gaming Zones in Kansas - DRAFT, May 26, 2008
• Cummings Associates, Projections for the Likely Gaming Revenues of
Marvel Gaming, LLC - DRAFT, July 16, 2008

For the remainder of this writing, the above three reports are referenced as
Cummings May 2006, Cummings May 2008, and Cummings July 2008,
respectively.

-5- October 2010

State Consultant Revenue Projections for Exit 19 and Exit 33
In Exhibit C-4 of the Cummings July 2008 report, the analysis projects that
identical casinos would generate slot/table revenue of $174.2 million off Exit 33
(Harrah’s) and $134.7 million off Exit 19 (Penn National). In other words, the
analysis is projecting a casino off Exit 19 would generate about 23% less than a
like casino off Exit 33 because of the approximately 11-minute further drive for
Wichita-area customers. The Cummings July 2008 projections were very similar to
the projections made in the Cummings May 2008 report.

Jayhawk Consulting Services
Jayhawk Consulting Services (JCS) conducted a public opinion survey to the
test the attitudes of how distance influences the casino visitation habits of
Wichita residents.
Add JCS bio to clarify why they should be listened to. JCS is a respected polling
company with X years of experience, etc.

-6- October 2010

Proofing the Problem
Evidence will be brought forth, including real world data, examples and
situations that will show that the perceived revenue gap should not be taken as
a foregone conclusion.
The 23% revenue gap, as estimated by the State’s consultant, between two
highly similar casinos off Exit 19 and Exit 33, has not factored in additional
empirical data relevant to the analysis or come to a reasonable conclusion that
can be drawn from that data.

There are two fundamental areas that form the basis of the 23% revenue gap as
estimated by the State’s consultant. They are:
1. Distance is the overriding factor in determining a population’s spend at a
particular casino.
2. The attractiveness, proximity and the amount of competition around a
casino influences how much of the population’s spend that particular
casino will capture.

Distance Is the Overriding Factor In Determining Casino Spend
The State consultant presents data it has collected that the gaming spend of
typical adult populations declines at a rate of 38% as the distance away from a
casino is doubled. GGS’s research indicates that distance is not always the
overriding factor in how often people will visit a casino, and that the
applicability of the State consultant’s data to all casino markets and situations is
not always relevant.
The evidence that the State consultant uses to justify why the 38% rate of
decline is applicable is based on survey data it collected from Mississippi casinos
and an analysis of players club data from two anonymous casinos. The
consultant takes the visitation counts (from Mississippi) and the casino spend
(from the players club data examples) and divides it by the adult population in
those areas to determine the spend per adult. The State consultant then
measures the rate of decline in spending as distance is increased from a
particular casino.
However, the State consultant’s methodology undoubtedly overstates the rate
of decline in spending for casinos generally and the South Central Zone casino
specifically, as distance is increased for several reasons.
The first reason is every market in the U.S. has some form of casino competition,
and no market is completely insulated. Both the Mississippi casinos and the two
casino examples cited by the State consultant will have some of the gaming

-7- October 2010

spend from the more outlying populations siphoned off by surrounding casinos.
For example, even within 50 miles of the Mississippi casinos are casinos in New
Orleans. Therefore, distance is not the only reason New Orleans residents are not
visiting the Mississippi casinos, but rather the fact that there are three casinos in
the New Orleans area that are taking their play.
Kansas is conducting an open RFP process to get a top-notch casino built. The
proposed facilities in Kansas are extremely different from multi-level casino
riverboats built in the early and mid-1990s or even many of the riverboat casinos
built more recently in Iowa (where the State consultant has experience), and
are not likely to experience the same rate of decline. The Sumner casino will be
of higher quality, be land-based, and have better access (right off I-35) than
virtually any other regional casino in the U.S.
For these reasons alone it is more likely than not that the rate of decline in
spending would be lower than the State consultant cites.
Other reasons the State’s consultant likely overstating the drop in gaming spend
relate to the inherent self-selection bias of players club data and casino
marketing philosophies. Players club data is not a perfect proxy for actual
gaming revenue because not everyone signs up for a players card or uses their
players card. In fact, more outlying populations are less likely to use a players
card because they are less likely to be aware of the players club or may not visit
the casino often enough to accumulate awards. However, the outlying residents
are still visiting more than the players club data indicates.
Furthermore, casinos only have a finite amount of advertising dollars that can be
spent to attract players. The advertising dollars typically are spent in areas closer
to the casino. Whether a casino is built off Exit 19 or Exit 33, either one will spend
a similar high dollar amount of their advertising budget in Wichita. In these other
examples, part of the explanation for visitation dropping with distance is the fact
that casinos target their advertising budgets on the close-in populations and
spend less on more distant markets. This is especially true when there could be
four different cities 25 miles away (one to the North, one to the South, one to the
East and one to the West) that a casino would have to split its marketing budget
four ways. In the case of either Exit 19 or Exit 33, virtually all of the marketing
dollars will be plowed into Wichita.
The key question is how the spending decisions of Wichita residents will be
influenced by distance, and not by examples that may or may not be relevant.

The Attractiveness, Proximity and the Amount of Competition
Contrary evidence exists to the State consultant’s thesis specifically as it relates
to the attractiveness, proximity and the amount of competition.

-8- October 2010

The first prong to the State consultant’s argument (discussed above) is that
because Exit 19 is located eleven minutes further from Wichita than Exit 33, that
the visitation rates of Wichita residents will be lower.
The second prong to the State consultant’s thesis is that by the Exit 19 casino
being eleven minutes closer to the Oklahoma Border Casinos that those casinos
will capture a greater amount of the Wichita (and surrounding county)
population’s gaming spend than they would if the casino was located off Exit
33. Because of the large number of casinos and slot machines, the State
consultant’s analysis predicts that significantly more Wichita resident gaming
spend will go to the Oklahoma Border Casinos if the South Central Zone casino
were located off Exit 19 rather than Exit 33.

The Attractiveness of Competition
When the State consultant is determining how much of a population’s gaming
spend will be spent at one casino versus another, the two key determining
factors are the two casinos’ relative distance from the population and the
relative attractiveness or appeal of the two casinos.
The State consultant’s assumption is that a facility of the kind proposed in
Sumner County was next door to one of the Oklahoma Border Casinos (with the
same number of slots) that the Sumner Casino would only generate 22.2% more
revenue than the typical Oklahoma Border Casino.
((110 / 90)-1)=22.2%
(The typical Oklahoma Border Casino in this case does not include higher quality
facilities such as Quapaw Downstream Casino, the Firelake Casino, the Hard
Rock Casino in Tulsa, or the Riverwind Casino outside of Oklahoma City.)
While this assumption may not seem unreasonable, it greatly understates the
quality disparity between casinos competing in location-neutral markets. Also,
empirical evidence exists that is in conflict with this assumption. The Borgata
dramatically outperforms most casinos in Atlantic City, for example, as does
Wynn Las Vegas compared to Circus Circus just down the street on the Las
Vegas Strip. The situation also exists in Lake Charles, Louisiana, for which more
detail is provided.

Lake Charles Example
Lake Charles is a regional gaming market located in southwestern Louisiana that
consists of two riverboat complexes and one racino approximately 25 miles to
the west in Vinton. Key to the understanding of this market is that two riverboat
complexes have essentially no location advantage over one another. The only
difference is in appeal and attractiveness. The newer, $370 million L’Auberge du

-9- October 2010

Lac generates nearly three times the win per slot machine than the older Isle of
Capri riverboat complex.

Figure 1 – Lake Charles Casinos

Delta Downs

Source: Google Earth

Fair Share Analysis - Total Gaming Fair Share Analysis - Total Gaming
L' Auberge du Lac Delta Downs

151.0% 148.4% 150%
140.5% 145.5%
150%
120% 103.3% 98.4%
120% 95.6% 95.0% 98.0%
83.1% 90%
90%
60% 60%

30% 30%
0% 0%
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009

- 10 - October 2010

Fair Share Analysis - Total Gaming
Isle of Capri Lake Charles

150%
120%
92.5%
90% 70.0% 65.5%
63.0% 60.3% 59.1%
60%
30%
0%
2004 2005 2006 2007 2008 2009

Note: A fair share of 100% equals a market average win per slot machine and table game seat
Source: GGS; Louisiana Gaming Control Board

The State consultant himself has pointed out that his analysis is limited in this type
of situation when at a presentation to the Kansas Lottery Gaming Facility Review
Board on July 24, 2008, he said (quote taken from the official transcript):
Then I looked at everything else and I updated my
reviews of what’s going on elsewhere around the
Midwest, in large part, to try to come up with some
quantification of these "everything else" factors which,
again, are micro-access, slot mix, fit and finish, the
hotel, structured parking, entertainment, retail,
everything else, and I regret to report that I have found
no systematic way to factor those into my projections
[emphasis added].

Quite clearly, the estimated 22.1% difference in revenue (assuming no
difference in location) between a new destination casino with excellent access
in Sumner County and the typical Oklahoma border casino is at odds with
numerous real world situations.

Proximity of Competition
The State consultant’s analysis does not distinguish whether Wichita residents
would have to bypass one facility to reach another. The inherent assumption in
gravity models is that a given population lives between two facilities, as
illustrated in the diagram below.

- 11 - October 2010

Population
Facility Center Facility
A B

This assumption is not reflective of the real world case where the South Central
Zone casino is between the population center (Wichita) and the inferior
Oklahoma Border Casinos (illustrated in the diagram below).

Population
Center Facility Facility
A B

Say that Person A lives 50 miles from a 100,000 square-foot Wal-Mart (the closest
store to him) and about 100 to 120 miles from five or six 20,000 to 40,000 square-
foot general stores. The Wal-Mart is nicer, newer, and offers every item the
general stores offer plus a much greater selection (this last point is less
important).
If someone told you that Person A and his neighbors would spend about 20% of
their shopping dollars at the general stores, you would be scratching your head
wondering who in their right mind would drive twice as far to go to a lower
quality store with a poorer selection.
What if that same someone also said that this is what the gravity model dictates
- a 20% market share of spend - especially once the increased distance, smaller
size and lower relative quality of the general stores has been factored in? The
likely response from a logical person would be, “There is no way that anyone will
drive so far past the better facility to a poorer facility unless they happened to
already be in the area of the poorer facility.”
Therefore, some adjustment to the gravity model needs to be made that will
allow for some people not wanting to bypass a higher quality facility to go to a
lower quality smaller facility further away.

- 12 - October 2010

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