By Dan Shaw, Evansville Courier & Press
While most casinos have seen their revenues slump during the past year, Casino Aztar is one of a few in Indiana where they have risen.
In the first 10 months of its 2009 fiscal year, which began in July, Casino Aztar won nearly $96.7 million on wagers. That was up about 15 percent from the year before.
Only three of the remaining 10 Indiana casinos can likewise boast of an increase. The rest have suffered from a slump common throughout the country. According to the American Gaming Association, casino revenues have fallen about 4.7 percent overall in the past year.
When trying to explain Casino Aztar's rising fortunes, observers can't say the Evansville property has simply tightened its slots. Indiana law mandates that state casinos pay out a certain percentage of all wagers made.
Instead, many attribute Aztar's recent success to new leadership. In April 2008, Indiana regulators appointed an attorney-in-fact, Robert "Tom" Dingman, who was to oversee the casino until a sale could be arranged. The sale never came to pass, though, and Dingman has been running the riverboat ever since.
Ed Feigenbaum, the editor of the publication Indiana Gaming Insight, said Indiana's other success stories are easily explained. Harrah's Horseshoe Casino in Hammond, for instance, recently underwent a $485-million renovation. And the new attraction has begun to siphon off patrons from nearby gambling parlors.
"They have just done tremendously," Feigenbaum said. "Their attendance is up more than a half million."
Aztar's recent performance, in contrast, didn't come from a large investment. Though the need for renovating Indiana's oldest casino has been much talked about in recent years, little progress has been made in that direction. Matters weren't helped by the yearlong bankruptcy of the current owner of Aztar, Tropicana Entertainment.
Feigenbaum said the importance of leadership can't be overestimated.
"It would seem the principal explanation would be the management of trustee Dingman compared to the way things had operated under the old Tropicana management," Feigenbaum said.
Aztar's rise has been as much a return to form as a great expansion in business. The casino's recent troubles perhaps can be traced back to the opening of the French Lick casino in late 2006, which gave gamblers in this part of the country an alternative outlet for their pastime.
That threat, though, hasn't proved as great as many had first feared. During the same year that the Hammond casino was setting records for the highest monthly revenues brought in by an Indiana casino, French Lick was setting records for the lowest. In December, the French Lick casino had $6.2 million in winnings, according to Feigenbaum.
Managers there downplay the results, saying the real attractions are the town's restored historic hotels. Whatever the reasons, the news is good for Aztar, whose business model is nearly opposite. At the Evansville casino, high rollers often get complimentary rooms in order to encourage them to spend more at the slots.
Meanwhile, Aztar's other chief competitor, a Harrah's casino in Metropolis, Ill., has suffered from Illinois' smoking ban. That too has driven gamblers to Evansville's riverboat.
Sandy Waldrop, who lives about 25 miles west of Vincennes, said she visits Aztar three or four times a month but would stop coming if Indiana disallowed smoking inside. Aside from that minor worry, she has little reason for complaints.
"Aztar has always treated me good, except when I don't win," she said.
A steepening of the competition wasn't the worst event to befall the Evansville Casino. A worse blow came with a new owner.
William J. Yung III, who made his fortune as the owner of the hotel company Columbia Sussex, bought Casino Aztar in January 2007. Yung soon cut costs by laying off employees and slashing the budget for marketing and other expenditures. Stacey McNeil, Aztar director of marketing, said Yung reduced the casino's advertising budget by nearly 80 percent. In another cut, buses used to bring patrons from distant locations were eliminated.
The effect on revenues was immediate. Between its 2007 and 2008 fiscal years, Casino Aztar saw its winnings fall by about 27 percent, from $115.7 million to $84 million.
Among the improvements Dingman gets credit for has been an increased emphasis on direct-mail campaigns. Casino Aztar has looked more and more to markets like Nashville, Tenn., seeing opportunities there both because Tennessee doesn't allow casino gambling and residents of Nashville live equidistant from Evansville and Metropolis. Employment also has rebounded at the casino. About 950 people now work there, up nearly 100 since Dingman took over.
McNeil said casino employees think the good fortunes will continue once Dingman steps down from his position and control of Aztar reverts to Tropicana Entertainment, which emerged from bankruptcy earlier this month. Before that transfer can happen, though, the new ownership of the company must win the approval of Indiana regulators.
Tropicana managers are eager to be back in charge in Evansville.
In February, they pledged to give the city millions in extra rent and other payments in return for being welcomed back. And local and state governments already have reaped the benefits of Aztar's improved performance.
Between July and April, the casino paid $96.7 million in taxes, which is up 7 percent from the same period last year.
Those come both from admission taxes - Aztar pays $3 for every patron who walks through its doors - and taxes paid on winnings.
Although Aztar doesn't have to publish results for its hotels and restaurants, McNeil said they have fared equally as well.
"All of our outlets have increased sales year over year," she said.