Little Vegas Casinos Czech Republic

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Little VegasCasinosCzech Republic

• ECON Project
• Dr. Amacher
• Fall 2004

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Introduction

• Jonathan Scott
• Sara Morgan-Dyke
• Thy (Kat) Nguyen
• Paige Burns
• Dolapo Ogunsanlu
• Marcus Onvani

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Introduction

• Our Existing Company
• American
• Financially Secure
• Casino Operator in US and Western Europe
• Look to Expand into Central and Eastern Europe
• All Economic Indicators Point to The Czech
  Republic

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Outline

• I. Political Environment
• II. Economy/ Demographics
• III. Tourism
• IV. Our Proposal
• V. Means of Differentiation
• VI. Potential Problem Areas
• VII. Competition
• VIII. Conclusion

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I. Political Environment

• Geography

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I. Political Environment

• Geography
• Westernmost, most affluent of Warsaw Pact
• Landlocked Slovak, Poland, Germany, Austria

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I. Political Environment

• History
• 1948-1989 Czechoslovakia
• 1989 Velvet Revolution
• 1993 Czech Republic
• Social Economic system changes

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I. Political Environment

• Current Status
• Political Structure
• Parliamentary Republic
• Multi-party democratic political system
• Current status of national/international
  relationships
  
• OECD, WTO, NATO
• EU May 1st, 2004

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II. Economy/Demographics

• Population Statistics/ Demographics
• Population
• Education
• Per capita Income

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II. Economy/Demographics

• National Economical Models
• Monopoly regulation
• Financial Data
• GDP 69.9B
• Per capita 5,560

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III. Tourism

• Government encouragement
• Rising Tourism
• Reasons for Increase
• Historically intact cities
• Fall of communism - 1989
• Proximity to wealthy nations
• Inexpensive country to visit (Low CPI)

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Outline

• I. Political Environment
• II. Economy/ Demographics
• III. Tourism
• IV. Our Proposal
• V. Means of Differentiation
• VI. Potential Problem Areas
• VII. Competition
• VIII. Conclusion

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IV. Our Proposal

• Our Existing Company
• Financially Stable
• Looks to invest in The Czech Republic

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IV. Our Proposal

• Business Type

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IV. Our Proposal

• Entry Strategy
• Construct NEW Casinos in 3 cities
• Prague
• Znojmo (Austrian Border City)
• Karlovy (German Border City)

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IV. Our Proposal

• Financing Options
• Invest with Internal Funds
• Retain Control
• Initial Public offering
• Increased costs of flotation
• Deal with Board and Shareholders
• Loss of Control

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IV. Our Proposal

• Exchange Rate Risk

• Dominant Currency is the Koruna (K)
• Current Exchange Rate 124.27K
• Recommendation Hedge Currency Risk by purchasing
  currency options
  

Source www.bot.or.th
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IV. Our Proposal

• Marketing Scheme
• Media Coverage
• Free Travel from Germany and Austria
• Billboards in those countries, en route

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IV. Our Proposal

• Profit Proposal
• Transworld owns 3 casinos in Czech

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IV. Our Proposal

• Amacher Business Plan
• Who are my customers?
• What are their expectations?
• How are we going to exceed their expectations?

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V. Monopolistic Segment of our Business

• Atmosphere
• American Style
• Sports Gambling
• Customer Service Driven
• Dining Featuring an Internationally Diverse
  Selection
  
• Shows/ Concerts
• American Theme
• American Celebrity Actors

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V. Other Means of Differentiation

• Barriers to Entry
• Food
• Complimentary Alcoholic Beverages
• Hospitality/Training
• Travel

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Outline

• I. Political Environment
• II. Economy/ Demographics
• III. Tourism
• IV. Our Proposal
• V. Means of Differentiation
• VI. Potential Problem Areas
• VII. Competition
• VIII. Conclusion

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VI. Potential Problem Areas

• Problem 1 Requirements to Obtain a Casino
  Operating License

• Minimum amount of capital
• Clean criminal record
• Monitoring system
• Fund public benefit programs
• CASINO OWNERS MUST BE CZECH CITIZENS!!!!!!!

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VI. Potential Problem Areas
Response 1 Requirements to Obtain a Casino
Operating License

• American Board of Directors
• Czech Management and Employees
• Work with a Czech Company who holds the Casino
  License.
  
• Manage All Operations and Lease Gaming Equipment
  to the Czech Company.
  
• We receive management fees based on a percentage
  of profits and receive equipment lease fees.

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VI. Potential Problem Areas
Problem 2 Recent casino bombing
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VI. Potential Problem Areas
Problem 2 Recent casino bombing cont

• New legislature making casino licenses more
  difficult to obtain
  
• This incident was limited to a dispute between
  members of an Israeli organized crime group, not
  between rivaling casinos.

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VI. Potential Problems Areas

• Problem 2..Possibly to our advantage?
• Act now Open a casino while gaming licenses are
  still easy to obtain. (A future barrier to entry
  for other companies.)
  
• As a clean and honest company, we have nothing to
  worry about.

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VII. Competition

• Industry Level
• Other Entertainment Competition in Prague
• Opera
• Theater
• Concerts
• Galleries
• Museums
• Clubs
• Cinema
• Planetarium

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VII. Competition

• Casino Level
• Major Competition In Prague
• Casino Admiral
• Largest Casino in the Czech Republic
• The most professional managed casino in town.
• Upscale bar.
• Prime Location on top of the Palace of Culture
• Casino Palais
• Elegant interior makes it a stop among tourists
  who arent even gambling!
  

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VII. Competition
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VII. Competition
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VII. Competition

• Casino Level
• In Prague Few large casinos
• Proposal One extra-large casino
• In Karlovy One small casino
• Proposal One midsize casino
• In Znojmo Two small casinos
• Proposal One midsize casino

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VIII. Conclusion

• Summary
• Czech is geographically desirable
• Favorable political environment
• Increasing tourism, booming industry
• We propose 3 casinos in Czech Republic
• Our atmosphere and style is unique, giving us a
  competitive advantage
  
• We have identified potential problem areas and
  used them to our advantage
  
• Internally Financed
• Long-term objective approach near monopoly status