1. The Market Potential of the Four Gaming Zones of Kansas Presentation to Kansas Lottery Gaming Facility Review Board by Will Cummings / Cummings Associates June 3, 2008 1

2. Overview l Cummings background l Gravity model methodology l Comparisons / “Power Ratings” l What is “Potential”? l Northeast... Southeast... South-Central... Southwest l Summary / Statewide 2

3. Will E. Cummings Cummings Associates 3

4. Will Cummings u Graduate of MIT’s Sloan School of Management u Has directed studies of leisure and entertainment businesses in more than forty states, provinces and foreign countries, with particular focus on gaming and wagering u Extensive experience with casinos in Iowa, rest of Midwest, Northeast, and Canada 4

5. Gravity Model / Casino Analyses u Iowa u New York u New England u Pennsylvania u Michigan u Indiana u South Dakota u New Mexico u The Caribbean u... and many more 5

6. Gov’t Agencies / Regulatory Bodies u Iowa Racing and Gaming Commission u South Dakota Commission on Gaming u Horse Racing Alberta u New Jersey Casino Control Commission u Connecticut Division of Special Revenue u many State Racing Commissions u Massachusetts State Lottery u Virginia State Lottery u Connecticut Lottery Corporation u Atlantic Lottery Corporation 6

7. Why “Gravity Model?” 7

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11. “Gravity Models” – Overview l Location l Size l Everything Else 11

12. Location I: The Closer, the Better 12

13. 13 Las Vegas Visitation/Distance

14. Las Vegas: slope of the curve 14

15. Mississippi: steeper slope 15

16. Laughlin: much steeper slope 16

17. Casino X: isolated market 17

18. Casino Y: competition afar 18

19. Casino Y: less competition close 19

20. Location I: The Closer, the Better =“Friction” 20

21. Location II: Reilly’s Law 21

22. Reilly’s Law: ms ~ S/d 2 Where ms : market share S :“size” of each trade center d : distance 22

23. Newton’s Law: F = m/d 2 Where F : gravitational force m : mass (of each body) d : distance 23

24. Reilly’s Law: ms ~ S/d 2 Where ms : market share S : casino size (capacity) d : distance 24

25. Newton’s Law: F = m/d 2 Where F : gravitational force m : mass (of each body) d : distance 25

26. Reilly’s Law: ms ~ S/d 2 Where ms : market share S : casino size (capacity) d : distance / travel time 26

27. Size Matters 27

28. Reilly’s Law: ms ~ S /d 2 Where ms : market share S :“size” of each trade center d : distance 28

29. More Slots, More Spending 29

30. Calculations 30

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33. Other Things Matter, Too 33

34. “Other Things” that REALLY Matter l Micro-Access l Spaciousness l Slot Mix l Fit & Finish l Management l Marketing / Player Rewards 34

35. Useful Assets l Hotel l Structured Parking l Variety of Dining Choices l Retail l Entertainment l Players’ Club 35

36. Comparisons / “Power Ratings” 36

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38. How Do They Do? 38

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40. What is “Potential?” 40

41. “Potential” involves... l Examining more than just one “representative” location l Assume “average” performance? l Or something better? l My “Upside” reasonable, not sky-high 41

42. Northeast Zone 42

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52. Summaries 52

53. Kansas Speedway Site: $150/s/d 4,000 slots Downside $158.1 x Baseline $245.5$246.0 Upside $341.3 x (all in 2007 $ million) 53

54. KCK Stateline Site: $150/s/d 4,000 slots Downside $273.2 x Baseline $396.6$311.8 Upside $518.4 x (all “as was,” in 2007 $ million) 54

55. KCK “Middle” Site: $150/s/d 4,000 slots Downside $320.1 $282.1 Baseline $424.2$331.3 Upside $530.4 $380.2 (all in 2007 $ million) 55

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61. Southeast Zone 61

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63. Cherokee “Corner” Site: 600± slots* 1,200 slots Downside $20.5 x Baseline $29.3 $46.1 Upside $35.9 x (all in 2007 $ million) * win/slot/day less than $150, but ~ minimum critical mass 63

64. Cherokee “Galena” Site: 600± slots* 1,200 slots Downside $22.8 $32.7 Baseline $32.9 $51.3 Upside $49.3 $60.9 (all in 2007 $ million) * win/slot/day less than $150, but ~ minimum critical mass 64

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66. South-Central Zone 66

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68. Sumner Mulvane Site: $150/s/d 3,000 slots Downside $165.4 $162.7 Baseline $188.9 $187.5 Upside $205.4 $202.4 (all in 2007 $ million) 68

69. Sumner Wellington Site: $150/s/d 3,000 slots Downside $103.2 x Baseline $133.1$142.4 Upside $151.1 x (all in 2007 $ million) 69

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71. Southwest Zone 71

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73. Dodge City Site: $150/s/d 800 slots Downside $30.5 $32.5 Baseline $34.7 $36.5 Upside $38.6 $39.8 (all in 2007 $ million) 73

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75. Conclusions 75

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77. All Four(?) Zones: l Downside: $536 mn l Baseline: $669 mn l Upside: $797 mn (all excluding facilities whose viability is in doubt) 77

78. Will E. Cummings Cummings Associates 135 Jason Street Arlington, MA 02476 (781) 641-1215 cummingsw@aol.com 78

79. The Market Potential of the Four Gaming Zones of Kansas Presentation to Kansas Lottery Gaming Facility Review Board by Will Cummings / Cummings Associates June 3, 2008 79