Sports Betting: Rethinking Some Old and Cherished Positions

The Supreme Court is hearing a case in December that may well lead to legalized sports gambling in many states.  As the hearing nears, a chorus of voices advocating an end to a federal ban on sports betting are singing what for many of them is a new song that might be titled, “A Change of Heart” sung to the tune of Dylan’s “The Times They Are A-Changin.”  For some, and I am among them,  that changing of minds was far from easy.  Very few things are more difficult than changing one’s mind.

November was a month of mind changing events for me and I suspect many others.  I have been forced to revisit some long held beliefs and rethink them.  It started with Roy Moore, Harvey Weinstein, Kevin Spacey and all of the other men who were accused of sexual harassment.  Clearly, those men were despicable and should be hounded out of public office and positions of power. The efforts to force Moore off the ballot and keep him out of the Senate appeared to be just to me.  However, a dilemma developed for me when Al Franken was accused.  If Moore is not fit to serve in Congress, then how could Franken be fit?

The second event that drove me to reexamine my beliefs was the death of Charles Manson.  Manson died at age 83 after 48 years of incarceration for some of the most horrendous murders of the 20th century.  He had been sentenced to death, but was saved from execution by the California Supreme Court when the court ruled against the death penalty.  I supported the decision that the death penalty was too extreme.  But after a half-century of Manson’s very public life in prison I questioned my own belief.  The family of his victims suffered all of those years he enjoyed notoriety.  In retrospect, would justice have not better have been served with his execution?

 The trend toward legalizing sports betting outside of Nevada has also caused me to rethink my previous position.  Opinions on the subject are changing before my eyes and increasingly it is becoming clear to me that I might have been wrong all of these years.  On December 4th the United States Supreme Court is hearing Christie v. NCAA.  To those that support New Jersey it is a states’ rights issue; to the opposition it is a case of illegal gambling.  In 2011, the voters in New Jersey approved sports betting.  The National College Athletic Association and the professional sports leagues sued claiming New Jersey’s law violated federal law.  The NCAA won the case at each level of adjudication and New Jersey appealed each decision to the next higher court and finally to the Supreme CourtThe NCAA and the NFL are still adamantly against legal sports betting, insisting it is against federal law and a danger to the integrity of sports.  However, the NBA, NHL and MLB are leaning towards a time when making a wager on sports is legal and well regulated at the state level.  In support of a move to legalization, the American Gaming Association has been diligent in lobbying for federal legislation and its efforts are beginning to have an impact.  Many in Congress are starting to support the idea; several states have already taken steps to prepare for the opportunity to legalize, regulate and tax betting on sporting events.  Globally, sports betting is popular and now it seems the U. S. might be on the verge of embracing it.

The money wagered on professional and college sports is often credited with the popularity of the games.  Fans who wager on a game are eager to either buy a ticket and go to the game or pay for a premium service to watch it at home.  However, as most people know, most of those wagers are illegal because sports betting is legal only in the state of Nevada.  Under current federal law, Nevada is in sole possession of the sports gambling turf.  That fact is the rationale behind my long-held desire to maintain the status quo.  But as the issue goes to the Supreme Court I find myself singing a different tune; maybe it is time to open up legal sports betting to the entire country.  If the court strikes down the federal ban, the decision does not legalize sports betting; rather is clears the way for other states to pass their own sports betting law as New Jersey has done.  The decision could be very important because it deals with the issue of states’ rights and that is much broader than simply sports betting.

A decision in New Jersey and Governor Christie’s favor would not be good for Nevada sports books and casinos.  If other states legalize sports betting it will have a major impact on Nevada gaming revenues, especially during the Super Bowl, March Madness, the World Series and the NBA finals.  But whatever the cost to Nevada, it is the right thing for the court to do and the correct decision for nation as a whole.  Nevada has enjoyed an unfair advantage for years; regulating sports betting like all other forms of gambling should have remained the privilege of the states to regulate.  November was difficult for me, letting go of long-held and cherished beliefs is painful, but sometimes necessary.

Advertisements

The Joys of Living in China’s Shadow

Macau is an intriguing casino destination filled with gamblers, scammers and legal uncertainty.  The casinos generate significantly more casino revenue than any other place on earth. Macau gaming revenues are forecasted to hit $36 billion in 2018; that is three and half times the annual gaming revenue of the entire state of Nevada.  The reason is simple; Macau lives in the shadow of China and its 1.8 billion increasingly affluent citizens.  Macau’s billion-dollar plus gambling palaces play host to millions of Chinese looking for a place to spend their money.  The Chinese love of gambling is legendary and that makes Macau as close to gambling heaven as it is possible to get.

There is however, a downside to Macau’s favored location.  The government of China is the city’s absentee landlord.  China tells those who govern Macau and regulate casinos what it expects.  There is nothing transparent about the situation.  One can never be certain what China expects or what new dictates it has issued.  Macau Chief Executive Fernando Chui visits China when summoned and he has a Chinese representative to advise him.  When he speaks, the echo of China can be heard.  In the last couple of months he has issued a number of ambiguous statements.  He is promising to “review and strengthen” the gaming rules and guidelines and “hold specific audits on the problems found” in junket operations.  Those are hardly exact statements and Chui has not given even a hint about his intentions or his instructions; all that can be said for sure is that some things are going to change.

The vagueness of impending regulatory changes can be anxiety creating.  Each time a new official statement is published analysts at major brokerage houses advise caution and warn investors of a potential downturn in the market.  The situation is made worse by the hidden nature of China’s influence.  The Communist Party of China has just finished a major conference.  President Xi emerged from the meeting firmly in control of the party and of China.  Xi has a grand vision for China and among other things, his vision includes Macau.  Macau has a role in “new silk road” and in the new region that includes the major province closest to Macau.  Macau is also part of a plan to bring international visitors and currency to China.  The city has become too important to China to allow self government and that includes casino regulation.

 As we approach the time to begin the license renewal process, the influence of China looms larger and larger.  In 2020, the first casino licenses in Macau come up for review.  No clear guidelines have yet been published and that leaves the future of each license clouded by doubt of its viability.  The uncertainty of the situation must cause the owners and managers of casino companies as much anxiety as it does to analysts and investors.  So, why would anyone want to be in business in Macau?  Clearly, casino owners do want to remain.  All of the operators have made billion dollar investments recently to build new properties or improve existing ones.  But in the face of the uncertainty I ask again why?

The question has fascinated me for years.  But I think I found the answer this week; 280 million customers.  The Sands’ Venetian just celebrated its tenth anniversary.  Sadly Sands Chairman Sheldon Adelson was unable to attend; he fell on his way to the festivities and broke his ribs.  At 84-years old, the fall is not a minor event and could be life changing.  But he promises to visit as soon as he is able to travel.  Why would an 84-year old man with broken ribs want to travel half way around the world?  The answer is the same – 280 million customers.  The chief operating officer of the Venetian filled in for Adelson at the anniversary celebration.  He told the gathered dignitaries that 280 million people had visited the Venetian in ten years. He also said that there were an additional 220 million visitors to the Sands China.  Wow! Five hundred million people have visited Sheldon’s casinos in Macau in a decade.  I suspect that is why he and the other operators put up with the hassle.  There is no place else on earth a casino can expect to have than many customers eager to make a wager.  Living in the shadow of China does have its upside.

When Will the First New Casino Open in Pennsylvania?

Pennsylvania is to have more casinos, but it is anyone’s guess when they will open. On October 30th, Pennsylvania Governor Tom Wolf signed a bill to increase gambling dramatically in the Keystone State.  The bill was part of the legislation passed during the budget process.  Pennsylvania has a $2.2 billion deficit. The additional gaming is intended to reduce the deficit, but the lion’s share of the deficit will be financed by borrowing $1.5 billion.  The gaming bill is only expected to generate $200 million annually in fees and taxes.  However, gambling already provides the state with $2.4 billion in revenue annually- $1.4 billion in taxes on casino play and $1 billion from the state lottery.  Although, the gaming bill was passed to help balance next year’s budget, it may take longer than that before the cash rolls into the state’s coffers.

The gambling bill, House Bill No. 271, authorizes ten mini-casinos, gambling at airports, video gaming terminals in truck stops, online casinos, online lottery products and sports betting when and if it becomes legal under federal law.  Each aspect of the expansion will have its own timeline.  For the mini casinos, communities have until December 20th to opt out; thus far seven potential sites have opted out and others are searching their souls. Several communities have indicated they are very interesting in hosting a casino.  After the opt out deadline, the state’s existing casinos can bid on one of the licenses – combining the slot machine and table game licenses will make the minimum bid $10 million.  If there are any licenses left over, the bidding will be opened to other interested parties.  Once a bid has been accepted by the state, the operator can begin construction.  In the meantime; the control board has to write the regulations that will govern casino operations.  The tax rate on slot machines will be 54 percent; in today’s world that could dampen the casino operators’ enthusiasm.  No one, except the lawmakers and governor expects to see new casinos in the state before 2019.  The Pennsylvania Gaming Control Board had this to say about the process, “Satellite casinos have a new auction process before we even get to awarding the license and the location and doing the background investigation. And that process is really not going to take place until mid next year or so.”  The board is referring to regulatory process, not the time necessary to raise the money and build a casino which can only begin after the board finishes its work.

The slots in the truck stops, airports and the online gaming both for casinos and lottery will have separate timelines.  The quickest to hit the marketplace will probably be the lottery’s online offerings.  There will be fewer regulatory requirements and the lottery commission does not need outside investments or approvals.  The online casino gaming should be simple once the regulations have been written, but each casino will have to separately assess the viability of going online; as with every other form of gambling, Pennsylvania wants a hefty share of the profits in taxes and that limits the value of going online.

Eight airports are eligible to offer gaming.  They are being described as interactive gambling parlors, but the legislation appears to authorize slot machines like those in airports in Nevada.  Each city with an eligible airport has to give its approval.  In addition, the gaming board has to approve the operations and the operator.  In theory, the airports could be up and operating within a year if the gaming commission is able to write regulations and issue the necessary licenses within that time frame.  Each new form of gaming that requires additional regulations and licensing puts further stress on the resources of the state’s regulatory agency and will slow down the process.  In Illinois, the process of writing the regulations and approving the VLTs for play took two years.

The last of the new gaming options is truck stop gambling.   The legislation anticipates 1500 to 2000 video gaming terminals – slot machines; each eligible facility can have five VGTs.  Thus the lawmakers were planning on no more than 400 truck stops to qualify.  However, one of the lawmakers that opposed the bill, said the definition was so broad that one could “drive a truck through it” and “most convenience stores” would also qualify.  The bill was 675 pages long so it is highly unlikely that the lawmakers read and understood the entire bill.  That lack of understanding will continue to complicate the process, especially when new surprises are discovered.

A week after the bill had passed, local media discovered one of those surprises.  It seems that Mount Airy Casino Resort got special treatment. In general, the bill said that a new casino could not be located closer than 25 miles to an existing one, unless the new casino and the existing one are owned by the same entity.  However, for Mount Airy the distance requirement different; new casinos must be at least a county away.  The states: “A category 4 slot machine license may not be located in a sixth-class county which is contiguous to a county that hosts a category 2 licensed facility.” That sentence guarantees that Mount Airy remains the closest casino to the New York market.  Only the lawmakers that inserted those words appear to have known of their existence.

It has only been two weeks since the governor signed House Bill No. 271.  It is impossible after such a short period of time to assess the impact, anticipate the timelines or even to fully understand the content of the bill.  At this point, all we have are questions and probably some doubts.  The investment firm, Moody’s, wonders if the end result will help or harm the existing operators; by asking the question the company is saying the expansion will add to overall revenues of the state, but harm the existing casinos.  Penn National is threatening to sue over the bill’s discriminatory nature and there will probably be other law suits over the definition of truck stops.  As Nelson Rose once famously said about the National Indian Gaming Act, “no one knows what the bill means until it has been litigated.”

Governor Tom Wolf signed the bill because the state needs money, not because he is pro-gambling.  However, much like Pat Quinn in Illinois, Wolf may forget about the expansion of gambling and the budget in the near future.  Five candidates have already declared their intent to oppose Wolf in the 2018 election.  He is not going to have much time to shepherd the new gambling options through the approval process when he is locked in battle for his office.  So, while the governor fights for his office, it will be left to Pennsylvania Gaming Control Board to set the timeline for each of the elements of the grand gambling expansion in Pennsylvania.  When will the first casino open in Pennsylvania?  It will open after the regulators finish their preparatory work and the operators complete the financing and construction; in other words, not in the near future.

A New Mayor Proclaims A New Era In Atlantic City

While the voters in New Jersey selected a new governor, the citizens of Atlantic City selected a new mayor.  Immediately after being elected mayor, Frank Gilliam proclaimed a new era for the city. The Democrat mayor-elect is replacing the unlucky Republican, Don Guardian who was a one-term mayor whose time in office was marred by a financial crisis.  Under his watch five casinos closed and the state took over control of the city’s finances.  For Guardian and Atlantic City, it was a tumultuous four years.  But it would be unfair to place much of the responsibility for the city’s financial woes on the mayor; Guardian inherited a city under siege. When he took office the casinos in Pennsylvania were eating the lunch of the city’s casinos month after month and year after year. In 2013 the year before Guardian took office, gaming revenues fell 6.2 percent to $2.9 billion.  In the six years preceding his first term, gaming revenue fell by nearly 50 percent.

By 2014, the situation had become untenable for the weakest casinos.  In January the Atlantic Club shut its doors and by the end of the year three more casinos had gone out of business.  It was Don Guardian’s first year in office.  The loss of four casinos and the relentless decline in casino revenue created a financial crisis for the city.  The city and mayor struggled through 2015 looking everywhere for a ray of hope, but none was to be found. In October 2016, the former Trump Taj Mahal became the fifth casino to close, leaving the city with just seven operating casinos.  But things got worse. In November, New Jersey Governor Chris Christie sent in his shock troops to take over the city.  Christie argued the city administration did not take the situation seriously enough and failed to make the difficult decisions that needed to be made.  The state cut the city’s budget, sold some of its assets, reduced the number of city employees and attacked the city’s employee benefits program.  It was a very dark day for Guardian, who had very few good days.  There was, however, some good news at the end of Guardian’s time in office. Hard Rock bought the shuttered Taj Mahl and is spending $400 million to refashion it as a Hard Rock casino.  Also, online gaming had become a significant source of income for the state and the Atlantic City casinos.  In September, online gaming revenue was $20.4 million, up 25 percent.  Still, those bright spots were over shadowed by the less than pleasant events that dominated Guardian’s four years in office.

Guardian was philosophical about his loss in the election.  He said the city has a new mayor, but the sun will come up tomorrow as it always does and he would go on with his life.  In making his comments after conceding the election, he sounded almost relieved.  By contrast, the new mayor sounded overjoyed to take the office as he proclaimed a new era for Atlantic City.  Gilliam is inheriting a better situation than his predecessor.  New Jersey has a new governor. Philip Murphy, a Democrat and former Wall Street banker, is replacing Chris Christie.  During his campaign, Murphy promised to end the government takeover of the city.  Besides a more favorable governor, the new mayor can look forward to Hard Rock opening in six months and he can anticipate continued growth of online gaming.

However, there are some other things on the horizon that could make the last couple of years of Frank Gilliam’s first term as dark as Don Guardian’s time in office.  Philip Murphy said he would support additional casinos outside Atlantic City and closer to New York City.  That would not be good for Gilliam or Atlantic City.  But, most threatening is a law just signed by Governor Tom Wolf of Pennsylvania.  The new law authorizes ten mini-casinos, slot machines at the airports, slot machines in truck stops and online gaming.  None of those things will happen in 2018 or maybe even in 2019, but by 2020 Pennsylvania is going to have added significant new competitive pressure on Atlantic City.  And to make matters worse, by then, Massachusetts, New York and Connecticut will have additional casinos, too.

Frank Gilliam is not a novice having been on the city council since 2009.  But I suspect he does not fully appreciate the importance of Pennsylvania to the financial well-being of Atlantic City.  The city is not an island isolated from events in neighboring states.  For the first thirty years of the casino industry, the casinos in Atlantic City were alone  in a sea of customers.  Customers came to the Boardwalk from all up and down the Eastern Seaboard, but the majority of them came from Pennsylvania.  The expansion of gaming in the states of New York, Massachusetts, Maryland, Connecticut and even Maine is important to Atlantic City.  But no state is more important than Pennsylvania.  Frank Gilliam may think it is a new era, a new day in Atlantic City.  However, in my opinion, Pennsylvania, not the mayor of Atlantic City controls the destiny of AC and if a new era is dawning, it is dawning in Pennsylvania, not on the Boardwalk.

Losing the Paddle Wheel and the Captain

Riverboat gaming is undergoing change, evolving away from its beginning.  Riverboat gambling states are revisiting the legislation and regulations hoping to make the casinos safer and more competitive.  Riverboats are the product of difficult financial conditions in the late 1980s and early 1990s.  States on the Mississippi River or one of its tributaries considered riverboat gambling reminiscent of the 19th century to stimulate struggling economies.  The first state to pass a riverboat gambling law was Iowa in 1989, although the first casino did not open until April 1, 1991.  In the 1980s, Iowa was reeling from a farm crisis and loss of manufacturing jobs; in one three-year period unemployment doubled.  Many lawmakers were willing to try anything, even gambling to solve the problem. “The riverboat gambling concept came from Davenport.  Davenport was struggling economically, and we thought it would help their economy,” Don Avesnos, a former Speaker of the Iowa House said.   However good the idea may have seemed to its advocates, it had an equally convinced opposition:  “Everybody just thought everything would go to hell.  We’re going to have crime and prostitution and stealing and people going bankrupt,” said Sen. Wally Horn, D-Cedar Rapids.  The debate was heated, but the pros carried the day and riverboat gambling became law.  Other states were quick to follow suit.

The growth of riverboat gaming was part of the second wave of gaming expansion in the United States.  It started in 1988 and included historical communities and riverboats. By 1994, Colorado and South Dakota had authorized limited gaming in small historic mining towns while Iowa, Mississippi, Indiana, Louisiana, Missouri and Illinois passed riverboat gambling legislation.  Riverboats and mining towns had one thing in common; casinos and gambling were kept as far away from population centers as was possible.  In the eyes of the lawmakers in those states, putting gambling up in the mountains or floating on a river or lake would confine the sin.

That expansion was successful; the casinos made money, created jobs and paid substantial taxes.  Other states looked at the successes and coveted those results, leading to a third wave of expansion.  That wave was not confined to rivers or mountain locations and it put extreme pressure on the riverboat and mountain casinos. At the same time, Indian gaming began what has become the most significant growth trend in gaming.  The American Gaming Association recently reported that Indian gaming has grown 300-fold from $121 million a year in gross gaming revenue in its early 1990s to $30 billion in 2016.  The combination of Indian gaming and expansion into Ohio, Pennsylvania, Michigan, Maryland, Massachusetts, Kansas and New York put an immense amount of competitive pressure on those states with limited access to casinos.

As the competitive pressures increased so did the lobbying efforts to relax the restrictions on the floating and remote mountain casinos.  Operators in those states asked politicians and regulators for permission to expand their offerings, reduce the taxes and move into better locations.  The lobbying efforts worked, at least partially.  The historic town casinos were allowed to raise the wagering limits, extend the hours and add additional gaming options.  The riverboats wanted easier access, no entry fees, a reduction in the tax rate and most importantly, to be able to come ashore.

 Each state approached the issues differently. For example Indiana under pressure from Pennsylvania, Ohio and Illinois made a series of changes; boats were no longer required to have a crew and be capable of actually sailing, taxes and entry fee were adjusted and in 2015 a bill allowing the casino to build on land became law.  But competition was not the only issue that stimulated debate to bring casinos onto land.

Hurricane Katrina, not competition, caused the change in Mississippi.  Katrina hit Mississippi in September 2005 nearly destroying the casino industry in Biloxi. The casinos were closed for two months as a result of the storm.  Casinos in Biloxi were built on barges and as a result were very vulnerable to the fury of the storm.  The devastation overwhelmed the opposition and Mississippi easily decided to allow casinos to be built on land.  The wisdom of the change was evident during Hurricane Nate that hit Biloxi 12 years after Katrina. It was not as powerful as Katrina and the damage was minor.  Nate did less damage largely because new construction regulations made casinos less vulnerable to storms after Katrina.  Mississippi revised the idea of isolating the sin to protect the innocent and found the innocent were better protected in a casino on land than one sitting in the bay.

Those two ideas, adjusting to an increasingly competitive environment and protecting casino customers from the fury of Mother Nature are continuing to push the process forward.  Tropicana Evansville, the first casino in Indiana to move onto land, opened on October 20, 2017.  The casinos in Ohio and Pennsylvania have taken 40 percent of the revenue from Indiana casinos; to survive they will need help from the state, entry fees, taxation. Land-based operations are a good beginning.

Louisiana is next in line to address paddle wheels and captains.  The state is as vulnerable to tropical storms as the Mississippi Gulf Coast and that puts its casinos frequently in harm’s way.  Its casinos are also feeling the impact of casino expansion in other states.  Riverboat gambling was a good idea in its time, but that time is passed.  During one of the discussions in Indiana, a Republican lawmaker, Ed Clere, summarized the issue very well; “We see all the signs of increasing competition.  It’s our responsibility as legislators to make gaming policy for the long term and for two decades we’ve been making gaming policy in a reactive and ad hoc fashion.”  It is time to get rid of the paddle wheels and captains; those riverboats are not safe in extreme weather and they cannot compete with the land-based casinos being built all around them.

Illinois VLTs Now Exceed Casinos in Taxes Generated

Illinois has just seen a changing of the guard; in fiscal year 2017 VLT tax revenue exceeded that of the state’s ten casinos for the first time.  The change has been a long time coming, but it is here to stay.  The act that created a legal VLT industry in Illinois was signed into law by Governor Pat Quinn in 2009.  Quinn was in a difficult position; he had been the lieutenant governor when his predecessor was impeached, thrusting him into the seat of power. It was a very difficult time for Illinois.  The state was facing a large budget deficit and billions of dollars of infrastructure projects were desperately needed.  Quinn did his best to balance the budget by cutting expenses and raising taxes, but for the capital projects he needed more money than could be found by trimming expenses or increasing income or any other tax. To the new governor, video lottery terminals seemed like the perfect solution.  Tapping into the potential revenue stream would be easy and quick; no new bureaucracy would be needed, nor would the state have to find mega-casino companies willing to spend millions for licenses and then billions building new casinos.

The early estimates of the number of VLTs that would instantly spring up around the state and the money that would follow into the treasury made the idea a no-brainer.  The first projections anticipated 60,000 VLTs and $500 million in annual revenue to Illinois.  Sadly, for Quinn and his ambitious infrastructure plans things did not work out.  Quinn was midway into his second term in office before there were any VLTs in the state and revenue being generated was insignificant.  The governor’s friends and advisors had obviously missed something when making their projections.  They missed the potential glitches in the process.

There had been too many unexpected delays. First, it had taken nearly three years for the Illinois Gaming Board to approve the games and license the first operators.  And even more significantly, the process for individual communities to opt in was much slower than anyone had anticipated.  The local option was one of the key elements in the legislation; fulfilling that requirement put a damper on the governor’s revenue goals as many communities opted out initially.  The first time the Illinois Gaming Board reported revenues for VLTs was September 2012.  In that month, there were 13 locations with a total of 61 games generating a total of $90,030.30 in revenue and $22,512.66 in taxes for the state. After nine months the revenue had grown to an average of $10 million a month with taxes averaging $2.7 million.  In September 2013, the number of businesses with VLTs had grown to 2,469 and 10,210 units; revenue for that month was $29.6 million with $7.4 million in taxes.  But there still wasn’t enough to fund Quinn’s projects.

However, I suspect by then Quinn had forgotten his plans.  In he was in a fight for his job.  He lost the fight when voters chose Bruce Rauner to be governor of Illinois.  But even without a champion in the governor’s mansion, the number of VLTs in Illinois continued to expand month after month.  The process was aided when many of the cities that had originally turned up their noses at the idea of slot machines changed their mind.  Statewide, more than 100 municipalities either overturned bans or approved new ordinances allowing video gambling by the end of 2016.  The score card after five years is beginning to at least resemble Pat Quinn’s original plan.  In September 2017, there were 6,249 establishments housing 27,681 video gaming devices that generated $109.9 million in revenue and paid $27.4 million to the state for the month.

 In fiscal 2017, the state collected $296 million.  That number will continue to grow, although the growth rate is slowing.  Illinois may eventually reach 35,000 and possibly even 40,000 VLTs.  And if it does the tax revenues will be approaching the $500 million that Quinn’s advisors predicted.  But by then, Illinois may be in the administration of its third VLT governor.  So after eight years, video gaming appears to have been a good idea for the state’s treasury.

It has however, been a bad idea for the casino industry in Illinois.  With the growth of VLTs in the state casino revenue has dropped and of course as the casino revenue drops so do the tax payments.  The people responsible for VLTs in Illinois did not consider the potential impact on the casinos or casino taxes.  As politicians always seem to do, they just totaled up the new revenue without contemplating any revenue loss.  And again as is usually the case, the majority of those politicians have moved on to other careers, leaving the problems to someone else.  In the meantime, the casino industry in Illinois is under a great deal of pressure from excessive taxation and internal competition.  In the last 15 years, each time Illinois has needed more money it has looked to gaming.  The lawmakers have raised the taxes and fees and added video gaming.  It would be nice to say that it is only an historical trend, but that would not be true.  The legislature considers expanded gaming each time it meets.  Killing the golden goose while in search of a brighter shining goose appears to me to be a normal part of the political process.  When the 2018 legislative year begins, we can anticipate more of the same.  For the casinos in Illinois it can only get worse; the number of VLTs will continue to grow and so will the state lawmakers’ appetite for more gaming revenues.

Global Gaming Gets Unique Coverage

The 2017 version of Global Gaming Expo, G2E ended on October 5, 2017.  By all accounts it was a success, even in the face of the carnage at the Route 91 Harvest concert.  In that attack 58 people were killed and hundreds more were wounded while attending the concert in Las Vegas.  However the show did go on as life must always do in the face of tragedy.

G2E functions as the premier gathering place for the gaming industry. It is a venue for networking, exchanging information and an opportunity to see the latest industry products on parade.  Traditionally, G2E has offered a glimpse of what to expect on the casino floors in the following year.  The slot machines that will capture the majority of the sales in the coming year are there to be seen and evaluated for the first time.  But there is much more than slot machines to see on the exhibition floor.  Every major vendor of casino related products and services is there vying for attention.  Additionally, there are seminars where the most important issues of the day are discussed.  When it is over, attendees leave Las Vegas exhausted, but with the feeling they have a better grasp of gaming industry issues and products.  They are ready to go home and get to work bringing the ideas and products to their casinos.

This year was no exception; those who attended G2E 2017 were on the leading edge of the discussions on enhanced security, esports, skill-based slot machines and much more.  They were also on the leading edge of another trend that is affecting the industry.  Although most might not have noticed the paradigm switch, media coverage is changing.  Print journalism is abandoning gaming coverage and internet sources are stepping in to fill the gap.

In the years that I have been following the annual show one of the most significant changes that I have seen is in media coverage.  A few years ago, newspapers from Atlantic City, Philadelphia, Biloxi, Miami, Detroit, New Orleans, Hartford, Chicago, Reno and of course Las Vegas had reporters on the scene.  They reported on the major trends and products from the exhibition, adding any local color they could find.  In fifteen years of doing the Adams Daily Report, I have relied on those papers for the articles on G2E.  On any given day, I could depend on at least five well-written, in-depth stories from G2E.  However, by G2E 2017, the situation had become very different. The Las Vegas Review-Journal and Sun were the only newspapers covering the event.  The other newspapers that formerly sent reporters have discontinued gaming as a separate beat. They no longer have reporters dedicated to the industry and certainly no budget for G2E.

This year, the electronic media was there instead and CDC Gaming Reports had the highest profile at the show.  CDC had ten people working the floor, writing articles and taking pictures.  At the end of each day, CDC published electronically its “From the Floor – G2E 2017.”  From the Floor had ten to twelve articles and commentary summarizing the seminars and describing the products on display.  The CDC coverage included Buddy Frank on slot machines.  Buddy was doubly qualified to be there; he is both a former slot director and a reporter.  As a slot director, Buddy has purchased hundreds of slot machines; each year he attended G2E looking for the best games to put on his casino floor and because of that experience, Buddy knows slot machines.  His insights into the slots at G2E 2017 would be valuable to anyone trying to make sense of the dazzling displays.   But Buddy was not alone in making a real contribution to understanding the dynamics of G2E, each member of the CDC team added important perspectives.  In the interest of full disclosure, I have been associated with CDC and Jeffrey Compton for 15 years.  CDC distributes my Adams Daily Report; in fact the report was originally Jeff’s idea. 

Fifteen years ago, print media was still viable and in most gaming jurisdictions it covered gaming extensively.  The reporters were experienced journalists and knew the casino industry in their area well.  However, over the years all of those reporters moved on either to other beats or to other careers as newspapers downsized and relied more heavily on wire service stories.  Media covering gaming distributed via the internet has moved into provide the kind of coverage that print media once did.  CDC has become a leader in gaming coverage, distributing three separate news reports every week day and additional reports on the weekend.  Still, it was a big step moving to full coverage of G2E with original contentMy congratulations to all for a job very well done.


Disclaimer

This is a personal blog and the information in articles posted here represents my personal views. It does not necessarily represent the views of people, institutions or organizations that I may or may not be related with, and is not sponsored or endorsed by them unless stated explicitly. Comments and other public postings are the sole responsibility of their authors, and I shall not take any responsibility and liability for any libel or litigation that results from information written in or as a direct result of information written in a comment. All trademarks, copyrights, and registered names used or cited by this website are the property of their respective owners. I am not responsible for the contents or the reliability of any articles excerpted herein or linked websites and do not necessarily endorse the views expressed within them. I cannot guarantee that these links will work all of the time and have no control over the availability of the linked pages.

Pages

December 2017
M T W T F S S
« Nov    
 123
45678910
11121314151617
18192021222324
25262728293031