Author: Casino Connection Staff

Churchill Downs plans to enter the New Jersey online gambling market could be advanced by a new deal with NetEnt for online casino games.

NetEnt will deliver its full portfolio of online casino games to Churchill Downs, which has targeted early 2019 for the launch of both an online casino site and an online sports betting site in the state. The company has already announced a partnership with Golden Nugget Atlantic City and tech provider SBTech for the launch.

Erik Nyman, managing director for NetEnt’s Americas business, said in a press release that the addition of its games will become an “important contributor” to growth in online casino for Churchill Downs.

The move also comes after NetEnt promised it was working on deals to reverse a slowdown on the company’s UK-based revenue.

Churchill Downs has also applied for an online gaming license in Pennsylvania.

In another story, Rush Street Interactive—which runs the playsugarhouse.com online casino and sportsbook in New Jersey—has apparently switched its partnership on sports betting from Golden Nugget Atlantic City to Monmouth Park racetrack in Oceanport NJ.

Online casino sites in New Jersey must be partnered with an Atlantic City casino, but online sportsbooks can also be partnered with the two racetracks in the state—including the Meadowlands Racetrack—that have sports books.

Golden Nugget’s sports book cannot accept bets on NBA games under New Jersey regulations as the casino’s owner, Tilman Fertitta owns the NBA’s Houston Rockets. The transfer of playsugarhouse’s sports book to Monmouth Park would presumably allow the site to accept wagers on the NBA.

PlaySugarHouse’s online casino site remains partnered with Golden Nugget.

Wyomissing, Pennsylvania-based Penn National Gaming has finalized its $2.8 billion purchase of 12 casinos operated by Las Vegas-based Pinnacle Entertainment. Announced late last year, the Penn-Pinnacle deal had to be approved by 14 different state gaming authorities and the Federal Trade Commission. Penn National Chief Executive Officer Tim Wilmott said, “Our acquisition of Pinnacle Entertainment marks a significant milestone in Penn National’s 24-year history of growth as a public company.” He added Penn National will realize about $100 million in cost savings due to the Pinnacle acquisition. In addition, Pinnacle’s corporate headquarters will remain in Las Vegas.

To resolve any potential federal anti-trust issues, Las Vegas-based Boyd Gaming agreed to acquire the operations of four Pinnacle casinos in three states for $575 million. Boyd now operates 29 casino properties in 10 states. Penn and Boyd lease the Pinnacle casino operations from real estate investment trust Gaming and Leisure Properties, which owns the land associated with the resorts.

One still-pending transaction is Penn National’s partnership with real estate investment trust VICI Properties to jointly acquire Margaritaville Resort Casino in Bossier City, Louisiana for $376 million.

As a result of the deal, Penn National now operates a total of 40 casinos and racetracks in 18 states, with more than 49,000 gaming machines, 1,200 table games and nearly 9,000 hotel rooms. The company employs more than 30,000 people. It’s the second-largest gaming company by properties in the U.S. after Caesars Entertainment, which operates nearly 50 U.S. properties.

“Penn National is poised for continued growth with a portfolio of premiere gaming facilities and more than five million active customers in its player rewards database,” Wilmott said in a statement. “With the expected incremental free cash flow to be generated from our expanded base of operations, we believe we are well positioned to reduce leverage, evaluate additional accretive strategic growth investments and opportunistically return capital to shareholders.”

Boyd is buying Pinnacle’s two Ameristar casinos in Missouri and the Belterra gaming brands in Indiana and Ohio. Boyd Chief Executive Officer Keith Smith said the purchase “significantly expanded our portfolio and enhanced our free cash flow profile at a compelling multiple. We have gained a strong presence in three of the Midwest’s largest gaming markets, with access to millions of potential new customers.”

In September, Boyd completed a $280.5 million acquisition of the Valley Forge Casino Resort near Philadelphia.

GLPI Chairman, Chief Executive Officer and President Peter M. Carlino commented, “The successful completion of this transaction demonstrates our ability to create value for our shareholders through complex and unique structures. Additionally, it shows our readiness to partner with our tenants to help them grow and achieve their own strategic goals. Through this transaction, we have added an economic interest in two additional high quality regional gaming facilities, increasing our annual real estate income by $45.3 million. In Boyd, we have added a new tenant that is highly regarded in the gaming space and is an active consolidator of casino assets and operations Further, in announcing our 2019 dividend guidance, we are pleased to demonstrate our commitment to accretive growth and increasing returns to shareholders.”

Investigations of Wynn Resorts Ltd. and its former CEO by the Massachusetts Gaming Commission’s investigative team and gaming investigators in Nevada are nearing their completion, with the Bay State team likely to issue their report first.

Both probes began in February, scant weeks after the Wall Street Journal first published its expose of Steve Wynn and his history of alleged sexual harassment over several decades, including what had remained hidden until then: a $7 million hush payment to a massage therapist who claimed the gaming mogul had tried to rape her.

While those allegations led to Wynn’s rapid defenestration as CEO from the company that still bears his name, followed by his divestiture of all stocks, the investigations were just ramping up.

During the intervening months Wynn has vigorously denied all sexual wrongdoing while the company’s new CEO insists it is operating under a new corporate culture after several holdovers from the old regime were forced out.

The new regime has cooperated with both investigations while conducting its own internal investigation—which it has shared with Nevada and Massachusetts regulators.

Much is at stake for the company in Massachusetts, where it is building the $2.5 billion Encore Boston Harbor in Everett along the Mystic River, across from the Boston skyline. The license that would be required when the work is completed next June could be withheld by the MGC.

The question of whether the Massachusetts or Nevada teams will finish their probes first appears to turn on several factors. On the one hand, because it has operated in that state for many decades, Nevada investigators have far more witnesses to interview. On the other hand, the Massachusetts Gaming Commission just lost its chairman, Stephen Crosby, who resigned recently under criticism that he had already made up his mind about the culpability of Wynn. Governor Charlie Baker hasn’t yet appointed a successor, although an interim chairman, Gayle Cameron has been approved.

Also a factor is that the states have much different gaming regulations. Massachusetts’ is nearly brand new, while Nevada’s is weighty and old.

The MGC is seen as releasing the investigators’ report, taking testimony from witnesses, including members of the corporation, and hearing the views of the public. That could take several days, according to a spokesman. Then the commission would retire to a closed door session to make its decision.

Nevada operates under a two tiered regulatory system. The three-member Gaming Control Board will consider information presented to it and then determine if regulations were violated and if disciplinary action should be recommended. The five-member Nevada Gaming Commission will be the judge and determine the outcome of any complaint. Although the report will be confidential, the facts will be discussed in a publicly available document.

Another important difference: In Massachusetts Steve Wynn has been removed as a “qualifier” from the casino license. In Nevada an administrative hold has been placed on him, so that he still effectively holds the license pending the outcome of the investigation.

Chubby Checker, one of the icons of early rock ‘n roll, was honored October 10 as Casino Entertainer of the Year at the sixth annual Casino Entertainment Awards, which were presented at the Hard Rock Hotel and Casino.

Bill Engvail was named Casino Comedian of the Year and the Commodores were named Casino Musical Artists of the Year. The Righteous Brothers and Victor Drai were given the Casino Entertainment Legend awards.

Other CEA recipients included:

• Legends in Concert received the CEA for Casino Production Show of the Year.

• Hard Rock Live at Hard Rock Rocksino Northfield Park was named Showroom/Theater of the Year.

• Battery Park at Hard Rock Sioux City received the Casino Arena/Amphitheater of the Year award.

• Monica Reeves, Director of Entertainment, Station Casinos, was named Casino Entertainment Executive of the Year.

• Scott Thomas, CEO, Buzz Entertainment, was named Independent Talent Buyer of the Year.

• Seth Shomes, Vice President and Head of the Casino Division at United Talent Agency, was named Casino Booking Agent of the Year.

From a state legislator who’s gaming legalization bill opened up America to casinos to a man who sparked the racino revolution, the 2018 class of the American Gaming Association’s Gaming Hall of Fame was inducted during G2E last week.

Peter Carlino was responsible for helping to get the racino industry off the ground with Penn National Gaming, growing from one racetrack to a nationwide company that now boasts 38 casino properties. He recently helped to launch the real estate investment trusts in the gaming industry with the formation of Gaming & Leisure Properties Inc., the first casino REIT soon followed by spinoffs from MGM and Caesars.

Richard Haddrill was a longtime CEO of Bally Technologies and encouraged innovation at all levels of technology. He is currently vice chairman of Scientific Games, which acquired Bally’s in 2014. He is also a former chairman of the AGA.

As a gaming regulator in Nevada, Phil Hannifin helped to oversee the removal of organized crime influence over the state’s gaming industry and the ushering in of corporate ownership. As a casino executive, Hannifin worked for Howard Hughes’ Summa Corporation, Harrah’s casino, the original MGM Grand, and became a board member for Reno-based Fitzgerald’s, helping to lead a single-property company to a nationwide seven-casino organization.

 Steve Perskie was a young assemblyman in New Jersey when he authored the Casino Control Act, which permitted gaming in Atlantic City, located in his district. He later served as the chairman of the state’s chief regulator, the Casino Control Commission, helping to reform a bloated organization. He later served as a judge in the state. The success of legal gaming in New Jersey is credited with encouraging the spread of casinos across the country.

According to a new poll conducted by Associated Industries of Florida, 70 percent of likely voters will vote yes on November 6 for Amendment 3, Voter Control of Gambling in Florida. Only 15 percent said they planned to vote against it, and the remaining 15 percent were undecided. The proposal, which requires 60 percent approval to pass, would give Florida voters—not legislators–the “exclusive right to decide whether to authorize casino gambling” in the state. It excludes tribal casinos.

Previously, a poll commissioned by the Florida Chamber of Commerce found 54 percent of voters supported the amendment, 28 percent opposed it and 18 percent were undecided.

The AIF poll was conducted Oct. 8-10 and has a margin of error of 3.1 percentage points. No sample size was given.

As of October 5, Voters In Charge, the political committee sponsoring the amendment, had raised $36.75 million. Disney Worldwide Services gave more than $19.5 million of that amount and the Seminole Tribe of Florida gave $17.8 million. The majority of the remainder of the group’s funding came from No Casinos, a committee chaired by John Sowinski. Voters in Charge has $6.17 million cash on hand according to state records.

Also as of October 5, two groups opposing the amendment, Citizens for the Truth About Amendment 3 and Vote NO on 3, have raised a total of $7 million. The majority of support for Citizens for the Truth About Amendment 3 has come from West Flagler Associates, the parent company of Magic City Casino and the Flagler Dog Track in Miami. The group also received $1.4 million from the Tampa Bay Buccaneers. It has nearly $4.2 million cash on hand.

The National Football League’s Tampa Bay Buccaneers donated to Citizens for the Truth, and so did the Miami Dolphins, under the name South Florida Sod, which gave $500,000. MGM Resorts International and other horse and greyhound racetrack operators also donated.

Other opponents include several Florida lawmakers, such as state Rep. Clay Yarborough, who said gambling “is taking up a lot of time each legislative session whenever we have these proposals put in front of us. We need to be focused more now on important issues like funding greater school safety measures and mental health programs and public safety.”

Another Amendment 3 opponent is Jacksonville cardroom Bestbet President Jamie Shelton, who said, “This is more toward me and what I do here in Northeast Florida. It creates a monopoly for the Seminole Tribe in South Florida, using your constitution as a vehicle to create that.” Shelton said if the proposal passes, his operation would lose 200 jobs and $250 million in tax revenue that goes to education would be lost over the next 10 years. The Florida chapter of the American Legion also opposes Amendment 3, claiming it could affect charitable gaming, like raffles or pull tabs.

If it passes, the amendment would require any future gambling changes to be voted on as a citizens initiative. To be placed on the ballot, they are required to have a number of verified petition signatures equal to 8 percent of the votes cast in the last presidential election; that number also must equal 8 percent of the district wide vote in at least 14 of the state’s 27 congressional district to avoid targeting voters in just one district. For example, Voters In Charge had to get 766,200 verified petition signatures for Amendment 3 to be placed on the November 6 ballot.

Pennsylvania’s Mount Airy Casino Resort submitted its plan for a mini-casino to the Pennsylvania Gaming Control Board, based on its successful bid last February of just under $22 million to qualify for one of the 750-slot, 30-table game casinos created under last year’s gaming expansion law.

Mount Airy’s plan is for a mini-casino as part of an entertainment complex on 100 acres of land in Big Beaver, Pennsylvania, on the Ohio border in Lawrence County. Mount Airy officials initiated discussions with Beaver County officials on workforce development and possible local impact. Under the Category 4 regulations, the operator is required to open the casino by late 2019.

“While the due diligence process is under way, we’re enthusiastic about working with the community on job training and other partnerships,” Mount Airy Marketing and Gaming Operations VP Vincent Jordan told the Beaver County Times. “We are looking forward to communicating our plans and are appreciative of all the help and collaboration we have received from Beaver County officials.”

“It’s great to see another organization and business come into Beaver County who is willing to and will be a great neighbor to our community,” said Daniel Camp, chairman of the county board of commissioners, according to the Times. “I think them being here this early prior to breaking ground is a sign that shows the commitment to the community and the project.

“From the due diligence we have done here, we know what the Mount Airy organization does for the community in Mount Pocono. We’re excited for them to bring that here, along with the family-sustaining jobs they will be providing for workers from Beaver County and all through the region.”

According to the construction plan, the initial phase of the project will include a casino and restaurants, with a second phase of expansion to provide additional entertainment amenities. The project will create an estimated 400-500 permanent jobs and 300 construction jobs.

The dismissal of a lawsuit by Connecticut’s two gaming tribes to try to force the Department of the Interior to dislodge an approval of the amendments to the tribal state gaming compacts—rulings the tribes need to open a casino in East Windsor—means the casino is stuck in the mud. The department has been sitting on the approvals for more than a year.

The East Windsor casino is being proposed by MMCT Venture, a joint authority of the Mashantucket Pequot and Mohegan tribes. The changes to the gaming compacts took note of the fact that the tribes would be operating the first commercial casino in the state’s history. Their existing compacts give the tribes exclusivity to operate gaming in return for paying 25 percent of their revenues to the state.

The fear from lawmakers and the attorney general was that without an amended compact, the case could be made that the tribes were violating the compact by competing against themselves.

The purpose of the third, satellite casino, located near the border with Massachusetts, is to blunt the effects of the recently opened $960 million MGM Springfield, which has begun to drain some customers from the Bay State. East Windsor is about 14 miles from Springfield. The tribes have published studies that estimate that the MGM casino could cost the tribes hundreds of millions of dollars and thousands of jobs.

The Pequot tribe has already seen a 5.2 percent decline in slots revenue since the MGM Springfield opened in August and the Mohegans have seen an 8 percent drop.

At one time the East Windsor casino seemed inevitable. The governor approved it and the legislature passed a bill that made it possible.

But, largely thanks to public and private efforts in and out of the courtroom MGM was able to place effective roadblocks every step of the way. All along MGM claims that its rights under the Equal Protection Clause of the U.S. Constitution were violated when the legislature allowed the tribes to build a casino without opening the license up to competitive bid.

Apparently MGM’s under the radar lobbying with the Department of Interior proved to be strategic, since the Department’s approval is absolutely necessary, unless the legislature goes back and removes the requirement. However, that has been complicated by the fact that since the legislation was approved, MGM has introduced the proposal for a casino in Bridgeport. This had the effect of peeling back a significant part of the legislature from supporting the tribes.

The next step for the tribes is to appeal the federal judge’s dismissal of their case. Meantime, the longer the MGM Springfield operates without local competition, the more it cements its loyalty base—even in Connecticut.

MGM hailed the legal ruling with a statement: “The thorough and unambiguous federal court ruling can only be seen as a clear rejection of the Tribes’ insistent efforts to obtain a no-bid commercial casino license in Connecticut. It has become increasingly apparent that the Tribes’ promises of legal victory, no matter how often they are repeated, prove hollow.”

MGM argues that the state should open itself to competitive bidding if it wants more revenue from gaming: “Connecticut residents are best served by the state spending less time in court and more time on real opportunities to maximize economic development and job creation. That’s why each passing month makes it more obvious that the most productive path forward for Connecticut is to pass legislation calling for competitive bids on any new commercial casino in the state, and to get started on that process.”

Andrew Doba, spokesman for MMCT, told 22 News: Doba said, “We’re still reviewing our options following the court’s decision. Obviously, not what we wanted, but we feel confident that there’s a path forward for us and we’re looking at what those options are for us.”

Meanwhile the state’s congressional delegation was able to persuade the Inspector General of the Interior Department to investigate the department’s handling of the tribes’ requests.

The Mashantucket Pequot Tribal Nation has filed new papers to try to revive the lawsuit. It has introduced new accusations, including that the Department of the Interior bowed to “undue political pressure” that was applied to Interior Department Secretary Ryan Zinke at a “private dinner at a steakhouse in Las Vegas, Nevada,” where he was told by the White House to reject the amended tribal compact.

The papers claim that interference by the White House and the Nevada congressional delegation “tainted the administrative process.”

The papers mention Senator Dean Heller and Rep. Mark Amodei, both of Nevada by name because they were CC’d on the letter that was sent to the tribe informing it that the agreement would not be approved. MGM is based in Las Vegas, Nevada, so their interference is assumed to have been to benefit that company.

Interestingly, the Department did publish the Mohegan tribe’s amended compact in the Federal Register. But the casino can’t open until both compacts are published. The Pequot’s amended compact remains unpublished.

The city of Melrose, Massachusetts will be able to use $100,000 in mitigation funds sent its way by the Massachusetts Gaming Commission to help alleviate expected traffic problems from the Encore Boston Harbor when it opens next June.

The mitigation fund will be used to improve the 2.5 mile commuter corridor along

Pleasant and Washington Streets leading toward MBTA transit station at Maiden’s Oak Grove.

The funds were formally accepted at the most recent meeting of the city’s Board of Aldermen. The grant was awarded even though the city doesn’t directly abut Everett, where the casino is rising.

The casino plans to offer shuttle service for its own employees. A city official told the board: “They’re encouraging their employees to travel to the casino on the Orange Line. And the last step on the Orange Line is Oak Grove, which abuts Melrose.”

Nevertheless, the increased traffic is expected to glut the commuter corridor that leads to the transit station. The MGC agreed with that argument and authorized the grant, a quarter of which is set aside for a study of existing traffic and pedestrian conditions. The rest will go toward implementing the study’s recommendations.

Recommendations that could be made include improved crosswalks, ADA compliant ramps and maybe new or relocated bus stops.

Some of the traffic analysis has already begun in advance of the funding. City officials monitored how the traffic was along the corridor during the summer.

The Alderman who represents the area that contains the corridor said a study he and the Melrose Police Department conducted showed the area already has heavy traffic by pedestrians already.

The Alderman, Shawn MacMaster, added “We’re going to see more foot traffic, and we’re going to see more traffic in general, which I think makes it very clear that there are some improvements that we should be looking at.”

Because Melrose was considered a “neighboring community” instead of a “surrounding community” it didn’t get as much mitigation funding as other cities.

MGM Springfield

In its first month in business the $960 million MGM Springfield earned $27 million, which is under expected results. Of that, $8.8 million came from gaming tables and the remainder from slot machines.

The figures were released by the Massachusetts Gaming Commission, and included those for the other operating casino, Penn National’s Plainridge Park Casino. The combined gross revenues were $41.3 million.

The MGM Springfield reported $9.5 million during its first eight days of operation. The rest of the month’s revenue never approached that weekly high. MGM has projected that it would bring in $418 million for the first year of operation, but at the current rate of less than $1 million per day, that amount is unlikely.

MGM’s National Harbor casino in Maryland generated $41.9 million in December 2016 after only being open for three weeks. Maryland’s population is 6 million compared to 7 million for Massachusetts.

In spite of these discouraging numbers, MGM Springfield President Michael called the opening month’s figures “on track” with expectations. He cited September’s “solid visitor volume” and said hotels and restaurants in the complex had solid numbers of guests “eager to experience what our new resort has to offer.”