Virginia General Assembly Passes Casino Legislation

Last Saturday, the General Assembly of the state of Virginia passed compromise legislation that would effectively introduce the state – and Danville – to casino gaming in the near future, that is, if the governor decides to sign it into law.

According to Substitute Senate Bill 1126, the aforementioned legislation, the Virginia Lottery Board is authorized to regulate the yet-to-be-launched casino gaming industry in the state. Before that, there will have to be a framework for licenses and the bill, of course, clearly outlines these licensing requirements. It also specified both the civil and criminal penalties that operators would be subject to in case they violated the terms of the casino gaming law.

Moreover, casino gaming will still be limited to specific areas or cities that will meet the criteria that are outlined in the bill. For the selected cities, a referendum will have to be held so that the residents can vote on whether they agree to the establishment of a gaming facility. This is expected to be done by the end of 2020 which implies that it will certainly take a bit of time before casino gaming makes it to some places in the state. For instance, as it stands, Richmond and Norfolk have been identified as potential sites for a casino owned and operated by the Pamunkey Indian Tribe.

Recommendations and Taxes

A clause of the bill requires that a recommendation for casino gaming in the state to be filed with the concerned parties by the Joint Legislative Audit and Review Commission by November 1 this year. This is further complemented by a re-enactment clause for the referenda provisions outlined by the bill. However, unless the bill is re-enacted by the 2020 session of the General Assembly, no referenda can occur. Also, unless the Joint Legislative Audit and Review Commission’s findings and recommendations with regards to casino gaming are published by the specified date, there will be no referenda.

As for taxes, if passed, the bill would impose a tax range of between 13 and 15 percent of the adjusted gross revenue of the state’s licensed casino operators. This would be based on the operators’ annual adjusted gross receipts.  The bill will further outline how the tax proceeds will be disbursed after collection.

As mentioned earlier, the Virginia Lottery Board would be responsible for regulating the gaming industry and this will involve actual development of the rules that conform to the provisions of the gaming act. The time period for this has been set for between January 1, 2020, and June 30, 2020. One of the prime considerations is the establishment and implementation of a voluntary self-exclusion program that will allow individuals to protect themselves from gambling-related harm.

Mississippi Casino Revenue Spikes with Sports Betting Debut

According to the Mississippi state revenue department, the state’s overall casino revenue rose sharply in August with the debut of sports betting – figures released by the department show that gamblers lost a whopping $181 million across the state last August, an 8 percent increase from the $168 million that was recorded during the same period a year ago.

Only $645,000 of the revenue was lost on sports wagers, though, with a total $7.7 million wagered on sporting activities in the first month of legalized sports betting in the state. Licensed operators in the state took a total of $6.3 million in sports bets, a figure that is expected to increase significantly as more sport betting industries launch in the United States. The handle corresponds to about $644,000 in revenue for the casino and about $77,000 in tax income for the state.

Baseball Takes the Lead

As it turns out, the most popular sport as far as sports betting revenue is concerned was baseball whose wager clocked in at around $3.3 million bets for the month of August. It was followed by American football which brought in $1.3 million and $1.4 million in parlay betting.

The figures for September are anticipated to be even bigger as the football season goes full swing – Mississippi Gaming Commission Deputy Director Jay McDaniel reveals that through September 19 gamblers had already wagered $17.8 million implying that the total amount that will be wagered this month will fall somewhere between $35 million and $30 million.

Casino executives and regulators in the state are optimistic about sports betting being a good thing in terms of their income projections. They hope that more money will be lost on their casino games and more gamblers will be staying at their casino hotels and eating at their restaurants. Over the long term, the officials expect that the casinos will be able to win at least 6 percent to 7 percent of what is wagered.

Good News for Operators

As it stands, several well-known gambling companies currently offer sports betting in Mississippi but the first operator to go live with a sports betting offering when it was legalized on August 1 was MGM. The other companies such as Caesars Entertainment did not launch their sports betting services until later that month – Caesars chose to partner with SBTech for its sports betting operation. SBTech just launched earlier this month while William Hill just received its licenses and will be going live with Eldorado to cover the Mississippi sports betting market.

Macau Casino to Reopen After Typhoon Mangkhut

Late last Saturday, Macau authorities announced a blanket suspension of operations in the city’s casinos ahead of Typhoon Mangkhut, a storm that was expected to reach category 10. The 33-hour shutdown of the world’s biggest gambling hub caused a stock retreat that is estimated to have cost operators as much as $186 million in revenue.

“The suspension of gaming operations is for the safety of casino employees, visitors to the city and residents,” read the government statement.

Even though the decision had a huge impact on casino revenues, it did receive a considerable amount of support from various stakeholders including junket operators and other industry officials who believe that Macau’s casino industry is “still in positive growth territory.”

“This is the first time in Macau history that all casinos halted operations, to ensure the safety of employees,” said Stephen Lau, president of Power Macao Gaming Association, an organization that represents casino workers in the region. “We are seeing the government and casino operators no longer just put profit over the employees’ interest.”

Thankfully, almost all the casinos in the region begun operating again at 8 a.m. local time on Monday. The Union of Gaming Securities Asia Ltd. estimates that the 2-day shutdown is expected to cost Macau from 1.1 billion to 1.5 billion patacas in lost gaming revenue which is a pretty big deal since it is the first time that gambling activities have been shut down in the casino hub since licenses were handed to operators in 2002.

September Revenues to Take a Hit

The disruption caused by the storm is certainly bound to dampen casino revenue in Macau – this has already been confirmed by Govertsen and other analysts who have already lowered the hub’s outlook. According to Govertsen, September’s revenue growth rate is likely to be affected by as much as 7 percent points – this almost cuts in half the analyst’s previous forecast that there would be a 15 percent increase.

The storm is perhaps the biggest obstacle that the gambling hub has had to face in two years after an industry rebound that has been gaining the interest of investors. Unfortunately, the investors are now getting increasingly worried over a pullback in spending by high roller casino gamblers especially due to the economic slowdown that China has been experiencing. This is further elevated by concerns and question about the country’s trade war with the United States.

“Investor sentiment could remain weak and volatile for now, given macro uncertainties and likely earnings revision by the street, exacerbated by this typhoon/suspension news,” JPMorgan analyst DS Kim wrote on Sunday. “September could be a month to forget.”

Casinos Finally File Petitions for Pa. iGaming Licenses

A decent number of Pennsylvania-based casinos have finally forwarded applications for the state’s online gaming licenses. This was reported by the Pennsylvania Gaming Control Board (PGCB) last Monday shortly before the window for the first phase of the licenses application process came to an end.

Each of the 9 casinos that have applied for the online gaming licenses had to part with a whopping $10 million for a comprehensive gaming license that included online poker, online table games, and online slots. The last-minute submissions have effectively put an end to the wild speculations that the Keystone State’s casinos would forego online gambling due to the uninviting landscape of high fees and taxes that the state will be imposing on the online gaming revenue as well as the restrictions on skins and on-property wagering.

The casinos that have applied are:

  1. Parx
  2. Stadium Casino
  3. Mount Airy
  4. Sands Bethlehem
  5. Hollywood Casino
  6. Valley Forge
  7. Harrah’s Philadelphia
  8. Rivers Casino
  9. SugarHouse Casino

The Monday, July 16 rush to file the license petitions saw the number of casinos that sent applications rose from three at the end of last week to nine. As it stands, only four casinos – Mohegan Sun, Presque Isle Downs, Meadows Casino and Lady Luck Casino – did not apply for the discounted licenses but the next phase of the licensing period is already on. The four casinos, therefore, have the option of applying for the individual non-discounted licenses at a fee of $ million per category, an option that will only be available until August 14.

Phase three of the online gaming process may or may not occur as it is dependent on whether all the available licenses are sold out or not. In case, there are some left after August 14, the Pennsylvania Gaming Control Board said that it “may set a time for when it would begin accepting petitions from qualified gaming entities to conduct interactive games in all or some of the categories.”

A Significant Gamble

The licenses were clearly a huge gamble for the Keystone State’s lawmakers and gambling regulator particular because the casinos had already declared their opposition to the accompanying tax rates – 16 percent on the casinos’ wins for online poker and online table games, and 54 percent for online slots. These rates are, by far, the highest in any state and four times higher than the rates in New Jersey, where online gambling has been a thing for a while.

“While we remain disappointed with the state’s exorbitantly high tax rate, we have decided to proceed with the hope that we can continue to work to bring the tax in line with what other gaming jurisdictions around the world have instituted. Simply put, we’ve chosen to have a seat at the table in which we can share with the state our results and continue to educate them on why a competitive tax rate is ultimately a win-win for the state and the operator,” Eric Schippers, the Penn International Gaming spokesman said.

Casino Workers to Receive Sexual Harassment Panic Buttons

Two of the largest casinos in Las Vegas, Caesars Entertainment and MGM Resorts International, will soon be issuing its housekeepers, cocktail waitresses as well as other employees with panic buttons that will allow them to call for help in case they experience sexual harassment or abuse while on the job. This move follows the July 4 establishment of contracts for about 38,000 workers by the Culinary Workers Union Local 226, at the properties owned by the two casino operators.

According to a report by Fox 5 Vegas, the contracts “include language that requires panic buttons for workers like housekeepers who work alone in guest rooms and may be subjected to sexual harassment or other crimes.”

An Extra Sense of Mind

These car remote sized panic buttons are gaining a lot of popularity in hotels as a tool to give their employees an extra sense of mind as they go about their work. In fact, a number of cities, including Washington D.C., Chicago and Seattle have gone as far as passing citywide mandates that require hotels and other similar entertainment facilities to provide their housekeepers with panic buttons.

“We are here to do our jobs and provide incredible, world-class customer service for our guests,” MGM Grand housekeeper Maria Landeros said in a press release issued by the Culinary Union. “We are not here to be abused or have people think that just because it’s Las Vegas, anything goes.”

A recent survey carried out by the Culinary and Bartender unions revealed that 59 percent of cocktail servers and 27 percent of the hotel housekeepers have undergone at least one incident of sexual harassment by guests, their managers, and other people while on the job. The survey that involved the input of 10,000 workers further showed that 72 percent of cocktail servers and 53 percent of hotel housekeepers said that they had at in one or more instances felt unsafe due to actions of the guests in their workplaces.

“I was carrying a heavy tray full of drinks on the casino floor, and a high roller at the dice game grabbed me by the neck with both of his hands and forced me to kiss him for good luck,” recounts Debra Jeffries, a cocktail server at Caesars Entertainment-owned Bally’s. “I have permanent nerve damage from that incident and I live in pain every day.”

The results of the survey prompted the unions to advocate for the proposed stronger safety protections to be included in the contracts they were negotiating for. The Culinary and Bartender unions managed to reach a tentative agreement with MGM Resorts Entertainment and Caesars Entertainment thus putting a citywide walkout after their contracts expired on May 31.

The new contract has language that calls for better and greater security measures including sexual harassment, workplace safety as well as issues that revolve around technology, immigration and subcontracting.

Hard Rock, Ocean Resort Finally Go Live in Atlantic City

The long-awaited grand openings of two of Atlantic City’s revitalized entertainment establishments that were set for Thursday, June 28, came a little earlier than expected when both Ocean Resort Casino and Hard Rock Hotel and Casino opened their doors to customers a day earlier. On Wednesday, both casinos were given the go-ahead to proceed with full operations by the New Jersey Division of Gaming Enforcement, and they did just that while still pleading with the people to come back for the festivities that were planned for Thursday. There will also be a weekend beach concert which will contribute to the close to one million visitors that the city is expecting to host over a four-day stretch.

“Atlantic city is truly back in the game,” said Atlantic City Mayor Frank Gilliam, speaking at the second casino grand opening. “This is truly a collaboration of folks, realizing that (this) is an important part of not only Atlantic City history, but world history.”

Ocean Resort Casino owner and Chairman, Bruce Deifik, expressed a lot of joy on Wednesday after the Division of Gaming Enforcement cleared the casino – his joy is perhaps the reason why the casino went live a day before its initial launch date.

“I would like to sincerely thank everyone involved in this process — particularly the New Jersey Department of Gaming Enforcement, which has been an extremely helpful and collaborative partner throughout this process — and am excited to now start welcoming guests to the new Ocean Resort Casino,” Deifik said.

The former Revel casino held a ribbon cutting on the Boardwalk that was attended by actor, singer and die-hard New England Patriots fan Mark Wahlberg.

Hard Rock Hotel and Casino, on the other hand, held a mass guitar smashing ceremony inside its concert arena. This was attended by almost 8,000 fans and helping to christen the ceremony was “Black Panther” star Michael B. Jordan.

“Today is the bridge to the revitalization of Atlantic City,” Jim Allen, CEO of Hard Rock International, said right before the ceremony begun. “We believe this project will create a new day in the evolution of Atlantic City. We have spent $500 million renovating this building. We promised you we wouldn’t just paint it and put up a guitar.”

The past two years have been somewhat of an extended stretch of brutal occurrences for Atlantic City – during this period, five of its 12 casinos closed down and now online nine (including the reopened ones) remain. There is a lot of optimism following the rejuvenation and reopening of Hard Rock and Ocean Resort Casino.

Federal Regulators Finally Clear Path for Tribal Casino

A proposed joint tribal casino venture in Connecticut is finally back on track thanks to the federal regulators who have finally moved to clear the way for the tribal operators. The tribes, who are currently operating the Mohegan Sun and the Foxwoods Resort Casino, have partnered for this venture that is set to bring the first commercial Connecticut casino in East Windsor.

“The Department of the Interior has made effective the Tribal-State agreement amendments which it was obligated to do months ago.   We are hopeful that this development allows the project to now move forward in the interest of tribes and the state.  As the Inspector General continues its investigation, that timing will no doubt become a new focus,” said some of the state lawmakers in a statement.

So far, one of the few things that remain is a notice that is set to be published on June 1 by the United States Department of the Interior detailing how the concerns pertaining to the partnership have been satisfied – the Mohegan tribe’s revenue sharing agreement with Connecticut will remain intact even once they partner with Mashantucket Pequots-operated Foxwoods Resort Casino. The Department of the Interior’s Bureau of Indian Affairs (BIA) on May 31 announced that a revised gaming compact between the state’s government and the Mohegan tribe would be taking effect.

Meeting the Requirements of State Law

While the amendment did not mention the state’s compact with Foxwoods Resort Casino, Andrew Doba, the tribal joint venture’s spokesperson on Thursday confirmed that the Department of the Interior had taken everything into account and thus it would be publishing a similar notice for the Mashantucket Pequots in the “very near future.” Once these notices are published, the last requirement of the Connecticut state law that was passed last year will have been satisfied – the law permitted, for the very first time, the expansion of casino gambling in other places other than the tribal lands.

“Our goal has never changed,” Doba commented. “We want to do right by Connecticut and to preserve the strong relationship between our tribal nations and the state. Today’s decision is the latest step in our overall goal to preserve thousands of good paying jobs and millions in state tax revenue.”

Both the Mohegan’s and Mashantucket Pequot’s gaming compacts received major amendment last year with the tribes being incentivized to provide the state of Connecticut with 25 percent of gaming revenue from the East Windsor casino. Despite this being a pretty straightforward arrangement, the BIA slow rolled that process thus prompting the state and the tribe to sue the federal regulators over the same in December last year.

Apparently, the delay was influenced by serious lobbying by MGM Resorts who felt that they had been denied the opportunity to establish a rival casino in Bridgeport. The recent development that favors the tribes has not triggered any notable reaction from MGM Resorts this far, even though the disgruntled operator has proven its willingness to use any legal means to thwart the East Windsor project.

Members of the Las Vegas Culinary Union Threaten to Strike

For the first time in over thirty years, Las Vegas casinos could watch thousands of employees walk off the job after members of the city’s culinary union voted in favor of a strike that will take effect anytime next month. This move will have a crippling effect on the city’s famous resorts.

According to CNBC, the union’s grievances include an increase in wages and jobs security – the latter was a major highlight of these demands as it required that the workers be assured of protection against the increased use of technology at hotel-casinos and that the laws and language against sexual harassment be strengthened. This was supported by about 99 percent of the union’s members. Some of the properties that are set to be affected by the strike include the renowned Caesars Entertainment Corporation and MGM Resorts International.

The last time something like this happened was in 1984 when the casinos and their workers were at loggerheads due to the management’s efforts to reduce labor costs and the attempts to ease workplace restrictions. The strike which lasted 67 days cost both the workers and the city lots of money – therefore when a similar thing nearly happened in 2002, a deal was made quickly before everything got out of hand.

So far, no negotiations between the union and the individual casinos have begun even though the contracts belonging to the 50,000 workers who are also members of the culinary union are set to expire on May 31. Suppose this continues beyond the contracts’ expiration date, the strike will certainly have a profound effect on the city especially because the striking workers who include guest room attendants, bartenders, porters, bellmen, cooks, cocktail servers, kitchen server and food servers all of whom are vital parts of the casinos’ operation.

The Strike Is a Last Resort

The union’s spokesperson, Bethany Khan, said that it is seeking better training for workers as jobs continue to gravitate towards more technological applications and a larger share of casino profits. Also among the union’s demands was better worker safety protections that were fueled by the October 2017 concert mass shooting that left 58 people dead and countless more injured. This also includes protection against sexual harassment which has, by all means, become a focal point of the Las Vegas reckoning.

“A strike is a last resort,” the Culinary Union’s secretary-treasurer Geoconda Argüello-Kline said. “We want to come to an agreement, but the union and workers are preparing for a citywide strike if contracts are not settled by 1 June. We support innovations that improve jobs, but we oppose automation when it only destroys jobs. Our industry must innovate without losing the human touch. That’s why employers should work with us to stay strong, fair, and competitive.”

From existing reports, only MGM Resorts International has responded to the planned strike with a statement that read:

“A vote such as this is an expected part of the process. We are confident that we can resolve the outstanding contract issues and will come to an agreement that works for all sides. In fact, MGM Resorts and the Culinary and Bartenders Unions have scheduled talks for this week and next.”

Macau Gambling Tycoon Stanley Ho to Retire from SJM Holdings

Stanley Ho, the 96-year-old Macau casino tycoon and billionaire will be retiring as the chairman and executive director of SJM Holdings after a June 12 shareholders meeting. This announcement was made in a Thursday statement that was issued to the Hong Kong stock exchange. The statement further confirmed that Ho will become chairman emeritus after his retirement while his 53-year-old daughter, Daisy Ho will take over the reins of the casino empire.

Working alongside Daisy Ho, who is already the company’s board, will be Stanley Ho’s fourth wife Angela Leong and Timothy Fok, who is the son of Henry Fok, Stanley Ho’s former business partner. Both Angela and Henry will be appointed to the roles of co-chairmen and executive directors.

The “Godfather” of Macau Casinos

Ho has been very instrumental in turning Macau into a gambling haven with gaming revenues surpassing even Las Vegas. This is why he is considered to be the “godfather” of the casino business in the former Portuguese colony on China’s southern coast.

“Dr Ho has justifiably been acknowledged as the founding father of Macau’s gaming industry, which has for some time been the largest in the world in terms of revenue,” SJM said.

He still remains to be one of the Hong Kong’s most renowned businessmen despite recent struggles that included the recent drop in Macau gaming revenues following a 2012 corruption crackdown that was launched by President Xi Jinping.

SJM Holdings has been working hard to lure gamblers back to Macau with one of their most recent grand offerings, the Grand Lisboa, set to launch next year. Already, the company’s shares jumped as much as 11, the highest in three years, on Friday in early trading in the Hong Kong stock exchange amid a rally in casino stocks.

Dr Ho’s retirement will be the second in a one year span – last June, the flamboyant tycoon stepped down as chairman of Shun Tak Holdings Ltd., with, Pansy Ho, one of his other daughters assuming the position.

Steve Wynn Plans to Sell Entire Stake in His Casino Company

According to Wynn Resorts press, former chief executive of Wynn Resorts and casino magnate Steve Wynn sold his remaining eight million shares in the company, a move that saw him sever his ties with the gambling powerhouse that he started 16 years ago. Wynn sold his shares – amounting to 11.8 percent stake in the firm – for $2.1 billion just a day after he sold about 4.1 million of his shares for approximately $740 million.

The shares sale also comes a week after Wynn Resorts reported that Mr Wynn and his ex-wife, Elaine Wynn had scrapped a shareholder agreement and this denied them the right to sell their stakes. Elaine Wynn has a 9.26 percent in the company.

Galaxy Entertainment, a renowned Macau casino operator and one of Wynn’s competitors offered to buy 5.3 million Wynn Resorts shares for $175 a share during the same period. The agreement will give Galaxy Entertainment a 5 percent stake in the company that currently operates resorts in both Macau and Las Vegas.

Galaxy Entertainment and Mr Wynn delivered a joint statement after the sale on Wednesday with Francis Lui, Galaxy Entertainment’s vice chairman pointing out that the company had been given the opportunity to “acquire an investment in a globally recognized entertainment corporation with exceptionally high-quality assets and a significant development pipeline.” Matt Maddox, a Wynn Resorts’ chief executive pointed out that they are welcoming the sale since both companies have similar core “operating philosophies and values.”

Following a Wall Street Journal report that mounted a number of sexual misconduct allegations against him, on February 6 Steve Wynn stepped down as CEO and chairman of the casino and hotel company. Wynn, of course, denied the allegations with the same Wall Street Journal quoting him saying:

“The idea that I ever assaulted any woman is preposterous.”

Wynn Resort shares have already taken a hit, a four percent drop to be precise, after news of Steve Wynn’s plan to divest reached the public.

Scroll Up