RubinBrown Gaming Stats 2012

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• The Kansas City, Missouri market will see increased competition from the first Kansas state-owned facility opening in the region. • Louisiana and Mississippi will face additional competition as the new L’Auberge Casino & Hotel in Baton Rouge, Louisiana and the Jimmy Buffett’s Margaritaville Casino in Biloxi, Mississippi open in the summer of 2012. • In the Northeast, Maine will introduce its first full service casino in Oxford, Maine and Pennsylvania will introduce its eleventh casino, the Valley Forge Casino & Resort, located northeast of Philadelphia. • Western Pennsylvania and Eastern Indiana will see the introduction of commercial gaming in neighboring Cleveland and Cincinnati, Ohio as both Caesar’s Entertainment and Penn National look to capitalize on Ohio’s legalization of commercial gaming. The topic of gaming expansion will continue to be a focus in state legislatures. In Massachusetts, the governing and issuance of licenses for the recently legalized three resort-styled commercial casinos and one slot parlor will take center stage. Illinois will continue the discussion of expanding gaming as the governor and legislature work to compromise on the appropriate level of expansion. Other states such as Florida and New York will continue to explore the possibility of expanding gaming to include table games beyond their existing racino facilities. As brick and mortar facilities continue to face increased competition from new markets and facilities, the advent of internet gaming, or iGaming, is becoming a serious competitor in 2012. In December 2011, the Department of Justice reversed its opinion on the 1961 Wire Act, which historically prevented online wagering. The reversal of this interpretation has ignited a race between the federal government and individual states in developing regulation that permits and governs iGaming. State Gaming Taxes Consistent with commercial gaming revenues, state gaming tax revenues fluctuated by region but increased in total. Similar to the trends noted in 2010, the total state gaming tax revenues increased more than overall gaming revenues. The increase in gaming taxes paid is contributed to the growth experienced in new gaming markets. As a general rule, the mature gaming markets, such as Nevada, Mississippi, and New Jersey, have a lower effective tax rate than the newer markets, as the lure of increased tax revenues has been the catalyst for the expansion of gaming outside of Nevada and New Jersey. Meanwhile, the markets that have recently legalized gaming have higher tax rates as legislatures have used the increase in tax revenues as the primary point for justifying the expansion of gaming.

Gaming Revenue Tax Rate

Colorado

• 0.2375% - 19.0% graduated tax with 19.0% applied to revenues in excess of $13 million • 15.0% - 50.0% graduated tax with 50.0% applied to revenues in excess of $200 million • $3 admission tax per patron per gaming day • 15.0% - 40.0% graduated tax with 40.0% applied to revenues in excess of $600 million • $3 admission tax per patron per gaming day • 5.0% - 22.0% graduated tax with 22.0% applied to revenues in excess of $3 million • Racinos are subject to a 24% tax on adjusted gross receipts

Illinois

Indiana

Iowa

Kansas

• 27.0% of gaming revenues

Louisiana

• 21.5% of adjusted gross receipts for riverboats • 21.5% or $60 million (the greater) for land based facilities

Maryland

• 67.0% of gaming revenues

Michigan

• 19.0% of gaming revenues for permanent facilities • 24.0% of gaming revenues for temporary facilities

Mississippi

• 4.0% - 8.0% graduated state tax with all monthly revenues in excess of $134,000 taxed at 8.0% • 4.0% local tax • Annual gaming device taxes • 21.0% on adjusted gross receipts • $2 admission tax per patron per excursion (excursion is defined as a 2 hour period)

Missouri

Nevada

• 8.0% of gaming revenues • 1.25% - 2.50% investment alternative tax • 8.0% of gaming revenues • 1.25% - 2.50% investment alternative tax • 55.0% of gaming revenues on EGDs • 16.0% of gaming revenues on table games • 8.0% of gaming revenues • $2,000 annual gaming device tax per machine

New Jersey

Pennsylvania

South Dakota

West Virginia

• 53.0% net gaming EGD revenue (after a 4% administrative fee on gross revenue) on racetracks, of which 17.0% is distributed to other private entities within the racing industry • 53.0% of gaming revenues and a 4.7% capital reinvestment on historic resort EGD revenues • 35.0% of gaming revenues on table games

Gaming Tax Revenues by State

$1.5B

$1.1B

$750M

$375M