Foxwoods has made a few significant moves recently, and neither has anything to do with the excellent cole slaw to be found in the buffet. Instead, this has to do with the blurring of the line between Indian gaming and commercial casino gaming. First, from the Boston Globe:

Two of the biggest names in the casino business — Foxwoods and MGM Grand — joined forces yesterday to develop gambling ventures around the globe and market a $700 million hotel-casino complex under construction in Connecticut.

The deal gives Las Vegas’s MGM Grand access to the Northeast market and Indian gaming, and provides an experienced partner for the Mashantucket Pequot tribe as it tries to diversify its operations in the face of rising competition here in New England.

Under terms released yesterday, the Pequots will license the MGM Grand name for the new resort the tribe is building adjacent to its existing facility in Connecticut. The complex, expected to feature a hotel, casino, 5,000-seat concert theater, spa, and nightclubs, is expected to open in 2008 and be operated by the tribe.

MGM Grand and Foxwoods also said they expect to jointly develop gaming and nongaming operations and share data for marketing purposes on the millions of gamblers who visit their respective properties. MGM Grand said it would provide a loan of up to $200 million to finance the gambling projects.

Foxwoods, MGM Grand to join in casino ventures – The Boston Globe

And this, from WLOX, which is Biloxi’s ABC affiliate and not an in-house radio station for a deli:

The Foxwoods Development Company wants to be the company that opens a casino at the Broadwater.

On Tuesday, the head of the Foxwoods group called WLOX News. And Gary Armentrout told us the plan being negotiated is to turn 15 acres of Broadwater property immediately north of Highway 90 into a land based casino.

“It’s an opportunity we’re looking forward to pursue,” Armentrout said.

Foxwoods Development is based in St. Louis. It’s trying to get on next month’s Mississippi Gaming Commission agenda so it can get the Broadwater site approved.

So you know, the Pequot tribe operates the Foxwoods Casino in Connecticut. However, Armentrout said the Broadwater project wouldn’t be run by the native american tribe. It would be run by Foxwoods Development. That way, Mississippi would have regulatory control over the Biloxi casino. And Foxwoods would pay the same taxes every other coast casino is required to pay.

You’ve got to like the shift between written English (the newspaper article) and spoken English (the TV piece). Of course, this doesn’t compare with “Casinos got so big!” as in-depth analysis.

The significance of all this? It’s not that Indian casinos are partnering with commercial casino companies–that’s been going on for several years, and there are a few Harrah’s-branded casinos, for example, on Indian reservations. I think it’s more important to note that Foxwoods is actively developing a casino of its own in a commercial market. Also, the MGM/Foxwoods deal is not described as a management deal, but as an equal partnership, in which each side gets something of value.

In my historical research into gambling, I’ve yet to find the Grand Unification Theory of gambling–exactly why people like to gamble so much. It’s a little reassuring to know that psychologists aren’t that much closer. Still, they, like historians, have a pretty good idea that humans like to gamble, even when it isn’t in their best interest. From Psychology Today:

Gambling plays on at least two human universals: the urge to get something for nothing and the difficulty of giving up that dream, no matter how high the stakes or the odds against it.

Winning vs. Recouping Losses

For most of human prehistory, living through the night was not a given. For this reason, goes the evolutionary hypothesis, our ancestors learned to take what we’d now consider murderous chances in pursuit of food and mates. Those who continuously gambled and won became our forebearers, passing on a taste for the “off chance.” The possibility that a big score could be just around the corner, but you never know where or when you’ll hit on it, parallels modern gambling: One more rock overturned and you find dinner.

When you start losing, the darker side of that equation asserts itself: “One more roll and I’ll recoup my money” becomes a formula for huge losses. No one is exempt. Remember the Barings Bank fiasco, in which the Rolls Royce of British banking was felled by a lone trader who kept making bad bets on derivatives, desperate to dig himself out of a hole? His gut overrode his training. We’re all vulnerable to this risk instinct, the feeling that “I can and must recoup my losses.”

For our ancestors, it was actually risky to avoid risk altogether. Sometimes the next big score really is just around the corner. If you find an edible critter behind one in 50 rocks, your foraging pays off, especially when the terrain is safe.

In this case, one in 50 is excellent odds because you’re in a low-risk, potentially high-yield situation. It’s sort of like online dating: Meeting 10 people for coffee is not a huge imposition, especially since you could be finding your future partner.

Playing the slots is designed to feel similarly risk-free, but in reality it’s high-risk, low-yield, at least in the long run. You’re practically guaranteed a net loss and have only the slimmest shot at the jackpot. Another disadvantage: Gambling doesn’t teach you anything new, whereas the risks our ancestors took for survival had a steep learning curve—after overturning four dozen rocks, you’ve identified some helpful patterns.

Money is a relatively new concept for the human species. We learn about it the way we learn to read or play the piano—with effort. For most of us, money makes scant intuitive sense. We understand trade, but fiat value eludes us. A diamond is vastly more valuable than a cup of water, until you’re dehydrated. So which has more “value?” We learn to contextualize money because it’s not natural to think in mathematical abstractions.

Psychology Today: Gambling: The Pipe Dream Payoff

The article goes on to warn gamblers against chasing losses. It argues that gambling is high-risk and low-yield, but I wonder if that is entirely true. If one considers the enjoyment of the gambling experience itself a reward, then gambling must be at least moderate-reward. And if the gambler only wagers money he has already earmarked for that entertainment, the risk is low, since the money is already “spent.” It’s all in the perspective.

Yesterday I jokingly predicted the cresting of the poker wave, but here’s some evidence that the gambling wave–at least the Las Vegas one–is still building. Read about it, minus the tortured metaphors, from the LVRJ:

The “Big Six” gaming operators are starting 2006 with record-breaking profits, up nearly 45 percent from the first quarter 2005, thanks to surging demand for Las Vegas as a destination, strong table play in casinos and the two biggest mergers in industry history, analysts said this week.

With the major casino companies set to begin reporting first-quarter earnings next week, analysts are predicting that the combined net income for the six largest Nevada-based gaming companies will have surged to $572 million, up 44.8 percent from $395 million in the 2005 first quarter.
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Deutsche Bank analyst Marc Falcone said the earnings forecasts for the first quarter, as well as the remTainder of the year, are on the conservative side because economic fundamentals are proving to be stronger than expected.

“Growth (in the first quarter) was substantial, with regional markets benefiting from the mild winter and Las Vegas getting a boost from increased high-end play,” he said.

The Big Six gaming companies are Boyd Gaming Corp., Harrah’s Entertainment, Las Vegas Sands Corp., MGM Mirage, Station Casinos and Wynn Resorts Ltd.

Penn National, a major gaming company not based in Las Vegas, also enjoyed substantial growth, with first-quarter net income of $46.7 million, up 77.4 percent from $26.3 million a year earlier, analysts said.

The Las Vegas-based Big Six are expected to report combined revenue of $5.9 billion in the first quarter, up 55.7 percent from $3.8 billion a year earlier.

reviewjournal.com — Business – GAMING COMPANY REVENUE: Record profits for ‘Big Six’

They’ve got a really nice graphic with the logos of each company and their revenue info here. I wonder how long it took to put together.

No, you won’t be seeing anything like that in the Gaming Abstract soon.

That’s Penn National Gaming, not the school, though the school is just fine, as well, and as an alum I officially encourage all high schoolers with a record of academic excellence to consider Penn.

But this is a note of appreciation for the gaming company, which is much larger than most people think, and which has something many other companies do not: a detailed timeline history on the web. I’m slogging my way through the UNLV Gaming Abstract, and I’ve gotten all the way to Penn National Gaming, which is why I care so much about this today.

I’ve burned hours poring over 10-K reports looking for details about when properties were acquired, etc, for other companies. And here Penn has provided all that info in one convenient place. If all other companies did this, I wouldn’t have to put together this abstract.

I’ll still check this out against the 10-K–there might be a few important things that they left out. But if you want to see why this is great, click the link below:

Company History / Timeline – Penn National Gaming, Inc.

Anybody going to the Red Rock opening tonight?