Economic Impact Study — 2009

Introduction

PCI Gaming operates three primary locations, Wind Creek Casino and Hotel in Atmore, Alabama; Riverside Casino in Wetumpka, Alabama; Tallapoosa Casino in Montgomery, Alabama. These locations are in, respectively, Escambia, Elmore, and Montgomery counties. The three properties operate over 3000 Class II electronic bingo games 365 days per year, 7 days per week.

Wind Creek Casino in Atmore Alabama is the newest and largest of the properties. It opened in January of 2009 and it required a capital investment by PCI Gaming of over $200,000,000. The property sits on approximately 35 acres. The gaming area is a 225,000 square foot facility with 57,000 square feet of gaming floor with approximately 1600 electronic gaming machines. The Wind Creek property also includes a 160,000 square foot hotel with 236 beautiful rooms supported by room service 24/7. And in the very first month of operation one very lucky customer won a jackpot of over $600,000. Wind Creek has fine restaurants, first class entertainment and a luxurious spa. All of these elements require hundreds of employees and support staff and purchasing from local and regional vendors.

When assessing impact of the economic activity of Wind Creek and the other properties, we separate construction impacts from ongoing operational impacts. In 2009, there were 2,111 jobs created as a direct result of capital spending in Alabama. Of those jobs, 1,678 jobs were created directly in the three counties in which PCI Gaming operates. And when the ongoing operational jobs are included, the total jobs in general areas of Escambia, Elmore and Montgomery counties grew from 2,963 in 2008 to 3,703 in 2009, or an increase of 25%.

The Riverside Casino in Wetumpka Alabama overlooks the Coosa River. It has a casino of over 39,000 square feet with approximately 900 Class II electronic bingo machines, a fine restaurant, an entertainment lounge and a smoke shop. Riverside has also recently constructed a new five story parking garage. The Tallapoosa Casino is located in Montgomery Alabama. The casino is 21,000 square feet with approximately 500 Class II electronic bingo machines. But even with this relatively small size, Tallapoosa pays out nearly $50,000,000 per month in winnings.

In summary, the three PCI Gaming operations have approximately 2500 gaming machines and pay out nearly $180,000,000 per month.

The Economic Impact of Poarch Creek Casino Gaming in Alabama and Beyond

In 2008 the total number of jobs created by the PCI Gaming enterprise was 4,904. In 2009 that number increased to 7,869, an increase of 60%. When calculating the number of jobs created by economic activity, we generally divide the jobs into three groups: Direct Employment, Indirect Employment, and Induced Employment.

Direct employment is primarily based on employees hired or contracted directly by the enterprise. These can be full time and part time and contractors. The numbers we post are categorizes as FTE's or Full-Time Equivalents. Indirect employment or jobs are jobs supported by the use of business services and/or the purchases of products; for example, the purchase of food for restaurants, maintenance services for facilities, purchases of hardware or software, gaming supplies, and other goods and services. Induced employment or jobs are salaries and payrolls supporting, for example, local restaurants, gas stations and hotels, use of banks and grocery stores, computer stores and other various service and product companies that supply direct or indirect employees, contractors, customers and visitors.

In 2008, PCI Gaming engaged in purchases of goods and services for operations and capital projects for a total approximate value of $128,000,000. In 2009, that dollar value increased by 65% to $210,650,237. Showing over $82,000,000 in spending growth by the PCI Gaming enterprise provided even more jobs and other economic stimulus for a substantive number of people and communities involved in capital projects work and sales of goods and services to PCI Gaming.

Paying Taxes and Reducing Costs to Governments and Their Taxpayers

In December of 2009 there were approximately 225,600 people officially unemployed in Alabama with a civilian labor force of approximately 2,059,000. In 2008, PCI Gaming was responsible for 4,635 jobs in Alabama. In 2009, that number increased 61% to 7,460 jobs. That means without the PCI Gaming enterprise there would be over 3.3% more unemployed job seekers in Alabama. The unemployed are eligible for both state and federal benefits, as well as their reduced incomes limiting their local purchases and taxes paid. In 2009, local, state and federal governments did not payout $39,343,672 because of the PCI Gaming contribution to the economy, and without that contribution they would have been required to spend taxpayer funds. And when compared to 2008, PCI Gaming saved those governments (and their taxpayers) an extra $27,046,672 or 220% more in savings. As a note on this savings, one of the reasons for the very substantive increase in these savings is that Congress granted substantially extended unemployment benefits and because of the deep recession, the average period of time for an unemployed person to find a new job was unusually long.

Of course the gaming business requires strong management and oversight and there are costs associated with that management and oversight. But part of Indian Gaming Regulatory Act of 1988, gaming enterprises are required to pay fees to regulators to cover the cost of oversight. PCI Gaming pays thousands of dollars in fees to the National Indian Gaming Commission to cover the costs of regulations so that taxpayers are not burdened with that expense.

In 2009 the employment and purchasing and other economic activity of PCI Gaming was responsible for paying $37,854,961 in federal income taxes, which is 68% more than in 2008. As we all know, Social Security/Medicare taxes are above and beyond federal income taxes. In 2009, PCI Gaming economic activities were responsible for the payment of $38,612,060 of Social Security/Medicare taxes; that is a 66% increase over tax payments for 2008. When we consolidate the total contribution to the treasury of the governments' bottom line, PCI Gaming contributed an astounding $115,813,693 which is 100% more than in 2008. In this era of higher and higher government spending and ever growing government deficits it is clear that PCI Gaming is a strong contributor to reducing government deficits and government payments and government expenses.

*Even though there was a nominal increase in capital project spending from 2008 to 2009, because of the mix of that spending the number of jobs created was marginally reduced.

As is clear from the numbers above, 2009 was a banner year for growth and expansion for PCI Gaming. With the grand opening of Wind Creek, direct employment was up substantially, 40%. The numbers also show that the overall increased economic activity from business growth contributed substantially to overall employment in Alabama. From the buying of goods and services to the increased gaming activities and the increased dollar value of entertainment, lodging and dining, it can only be said that PCI Gaming in 2009 certainly delivered a true economic stimulus to Alabama.

The primary capital project for the past two years has been the development and construction of the Wind Creek Casino and Hotel in Atmore, AL. PCI Gaming invested more than $225,000,000 in the Wind Creek project. And as the reader has seen, since opening in January 2009 Wind Creek has been a sparkling success for PCI Gaming and its customers and vendors. PCI Gaming direct or indirect activity was responsible for over $144 million dollars in spending on goods and services.