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Archives for 2018-09-09
Pennsylvania’s top gambling regulator says that the “novelty has worn off” for Pennsylvania’s casinos and that growth may have plateaued, leaving online gambling as a possible avenue for growth in the state’s gaming industry. What the Gaming Control Board’s head said William H. Ryan Jr., chairman of the Pennsylvania Gaming Control Board, was commenting as part of an in-depth feature at Trib Total Media on the current state of Pennsylvania’s casinos. The story notes that casino revenue growth peaked in the 2011-2012 fiscal year, and that only two of Pennsylvania’s 11 casinos have experienced growth over the next two years (Sands Bethlehem and Valley Forge). Ryan noted that he believes that growth for PA casinos may have topped out, without changes to their economical model and/or streams of revenue: And later: One of the ways to foster growth in the casino sector? Online gambling. Online gambling can help brick and mortar casinos While Sheldon Adelson (casino magnate behind Sands Bethlehem) and company would like you to believe that internet gambling will cannibalize revenue from land-based casinos, that’s really not the case. The most recent research on the subject of online gaming suggests that it can be complementary to brick-and-mortar casinos. The concept also came up at a Senate committee hearing last month, as representatives from both SugarHouse Casino and Harrah’s talked about iGaming’s potential for:
Creating new customers.
Reactivating inactive players.
Cross-promotional possibilities. Then what’s stopping online gambling in PA? In reality, there’s not much stopping it. There is minimal opposition to the idea of iGaming — notably from Sands and some horse-racing interests. The other 10 casinos generally support launching online gambling, to the point that some have already partnered with online platforms. Most interests in the state approve of iGaming in some form, although the proposed tax rate and implementation remain issues that would need to be resolved. In the spring, Reps. John Payne and Nick Kotik — a Republican and a Democrat — made their case for online gambling legalization in an op-ed, and both sides of the aisle have introduced regulation bills. The PGCB said it is more than ready to handle the task of regulating online gaming, if a bill is passed. At the same time, legislation regulating online gambling has not really come up much in the current budget standoff. That’s despite the fact that online gambling has the potential of creating hundreds of millions of dollars in revenue for the state as the state looks to trim huge projected deficits. But if casino revenue growth in Pennsylvania actually has plateaued or continues to dip at some casinos — and the state is still looking for revenue in the coming weeks and months — the solution on online gaming waits in the wings as a fairly non-controversial way to help foster growth in the sector. Photo by It’s Our City used under license CC BY 2.0.
MGM Resorts CEO Jim Murren, who also happens to be the Chairman of the American Gaming Association (AGA), made several interesting comments about the future of gaming during a press briefing in Washington DC on Wednesday. During his remarks Murren touched on three hot-button issues in the gaming industry:
Daily Fantasy Sports (DFS)
Casino expansion outside of Atlantic City Murren on potential online gambling ban The comment that will certainly grab the most headlines was Murren’s assertion, reported by Las Vegas Review-Journal’s Steve Tetreault, that an online gambling ban would not be ruinous to MGM. Murren went on to say that online gaming is “convenience gambling,” adding that MGM is in the “resort-based” gaming business. This statement will likely be unsettling to regulated online gaming advocates, who may take Murren’s remark to mean the company will not fully support regulation or will not oppose Sheldon Adelson’s proposed online gambling ban, the Restoration of America’s Wire Act (RAWA). But that’s only one interpretation of Murren’s online gambling comments. Another way to parse Murren’s words is online gaming is only a small piece of the company’s revenue stream at the moment, therefore the passage of RAWA wouldn’t have much of an impact on MGM’s bottom line. While true, this thinking could also be seen as shortsighted, considering only 3% of the U.S. population has access to legal online gambling at this point. MGM sending mixed signals on iGaming At first glance it appears MGM is heavily invested in online gaming legalization in the U.S.:
MGM is already involved in the online gaming space through Borgata in Atlantic City, the highest revenue producer in New Jersey.
MGM has also applied for and received an online poker license in Nevada, but never launched an online poker site in its home state.
Additionally, the company is one of the driving forces (along with Caesars Entertainment) behind the pro-regulation lobbying group, the Coalition for Consumer Online Protection (C4COP), as well as the Let NY Play online gaming legalization campaign in New York. However, a close look at the company’s actions and statements over the past two years indicates MGM is not as invested as it appears to be. When you examine Murren’s current assertions on iGaming and his previous statements regarding the AGA’s withdrawal from the online gaming fight following the formation of a rift between its members, it appears the company is hedging its iGaming bets. In March of 2014 Murren told the Las Vegas Review-Journal: Two months later the AGA withdrew its support of regulating online gaming, with AGA President Geoff Freeman echoing Murren’s comments from March: Murren reiterated the AGA’s position on the matter in comments yesterday reported by Politico: Murren on DFS Another topic touched on by Murren was DFS, both in terms of the company’s potential plans for entering the DFS space as well as the questionable non-gambling classification of DFS. During his remarks, Murren said the AGA is studying the DFS industry and trying to determine the best way for its members to get involved in the DFS industry. Murren stated they were also examining the potential legal can of worms DFS could open down the road. On this latter point Murren was unambiguous. “Clearly this cannot be ignored, and it is gambling,” Murren stated. Murren’s point of view is that anyone who thinks DFS isn’t gambling is “absolutely, utterly wrong.” “I don’t know how to run a football team, but I do know how to run a casino, and this is gambling,” he said. According to Murren, because of conversations with regulators, MGM has decided to put its plans for DFS on hold for the time being. This is an indication that the AGA and MGM feel DFS regulations are coming down the pipeline, something that would almost certainly upset the DFS apple cart. Murren on Atlantic City monopoly Murren also touched on Atlantic City’s recent troubles (MGM owns half of the Borgata), but expressed optimism for the city moving forward. “The worst, I think, is behind Atlantic City,” Murren said. Murren went onto say that expansion outside of Atlantic City, in North Jersey, would help AC, and the MGM would be interested in developing in a North Jersey casino. “The market opportunity up north is vast,” the executive, Murren said, “If that were to pass, MGM would be interested in pursuing it.” Image Jason Patrick Ross / Shutterstock.com