Initiatives may make or break casinos

CRIPPLE CREEK - The casinos of Cripple Creek are halfway through the most difficult year in their history. So far, everyone is hanging on.

   Summer is typically the busiest time of year for casinos, but the consensus on Cripple Creek's Bennett Avenue is that the gaming industry won't truly warm up until voters say yea or nay on initiatives 121 and 122 this fall. The initiatives would allow casinos to offer higher $100 limits, new table games including craps and roulette and longer hours.

   Simply making it to the November vote may be a struggle for some local casinos. Several casino managers said that somebody in town is certain to be forced out of business by the end of the year. Others argue that the prospect of a more lucrative future could keep the doors open at the city's 17 casinos even if the one-armed bandits inside go hungry.

   On the plus side, gambling revenue in the town is now merely slumping, down 6.7 percent in May. Earlier this year, revenue was practically in a free fall, as the smoking ban, gas prices and winter weather combined to produce record drops in revenue, with a 16.7 percent year-to-year decline in March. For the year, revenue is off 13 percent and down more than $7 million from 2007.

   "I know that the May numbers weren't as bad as they projected," said Cripple Creek Mayor Dan Baader. "There's got to be some impact from the smoking, but how do you quantify it when gas is $5 a gallon? We used to think it was a recessionproof business, but not this time."

   But with the new Wildwood Casino and its 678 slot machines up and running, the casinos are now also splitting that diminished pot among more than 5,000 slots - the most ever in the city.

   "We added 700 devices, about 15 percent more devices to the market," said Eric Rose, general manager at the Colorado Grande Casino. "We're not going to be up 15 percent in June."

   And then there's smoking. Just after the Wildwood opened at the end of May, three local casinos claimed exemption from the statewide smoking ban under the cigar bar exemption. The city of Cripple Creek at first refused to write tickets, saying its police force lacked the resources to enforce the act, then changed course on June 18 and wrote $200 tickets to the general managers at Bronco Billy's, the Midnight Rose and the Double Eagle casinos. Police said they wouldn't write additional tickets or take complaints on smoking until those first citations go to court.

   The ticket prompted the Double Eagle to drop smoking, but Bronco Billy's and the Midnight Rose plan to challenge their tickets in court July 17, arguing that they meet the state's requirements for a cigar bar. Both are continuing to allow smoking until then.

   Coincidentally, July 17 is also when the Colorado Division of Gaming releases the revenue report for June, giving everyone a clearer picture of what effect the Wildwood and the reintroduction of smoking are having on the town's bottom line.

   "I think my horoscope said there would be major changes in my life on the 17th," said Todd Fred, general manager at the Wild Horse Casino.

   With only two casinos allowing smoking, everyone else is operating at a disadvantage, other casino managers said. Fred said Bronco Billy's has taken away more of his customers than the Wildwood. If the current situation continues, it may be too much for some casinos in town.

   "This is very likely the straw that's breaking the camel's back," Fred said. "It's a tough market anyway, with the new casino, and somebody's going to be forced out."

   On the other hand, November isn't that far away, and raising betting limits and expanding table games could be the tonic that puts gaming back in the black - even though the new rules wouldn't take effect until next summer.

   Lois Rice, executive director of the Colorado Gaming Association, said the initiatives, if they passed, would at least erase the damage done by the smoking ban and make Colorado's gaming towns more competitive with destinations like Las Vegas.

   "From our perspective, it's probably going to mitigate some of the effects of the smoking ban," Rice said. "It may draw some new customers to the towns (and) perhaps the towns will become more of a destination."

   Mayor Baader has high hopes for the initiatives. Ironically, however, if expanding gaming is successful, it could attract new casinos and keep the squeeze on existing businesses.

   "It would change everything around here," Baader said. 

CONTACT THE WRITER: 636-0275 or awineke@gazette.com

2008 CRIPPLE CREEK CASINO REVENUES

January
$9.8 million, -7.8 percent*

February
$10.6 million, -12.4 percent*

March
$11.4 million, -16.7 percent*

April
$10.7 million, -13.3 percent*

May
$12.3 million, -6.7 percent*

* percent change from 2007