Author: Casino Connection Staff

The issue of expanding casino gambling into northern New jersey will likely have the support of the next New Jersey Governor supports as both major candidates for the office said they were in favor of expansion at their last scheduled gubernatorial debate.

Democrat Phil Murphy and Republican Kim Guadagno said they favor expanding casinos outside of Atlantic City into the northern part of the state.

New Jersey voters, however, overwhelmingly defeated a referendum to allow the expansion last year. Supporters of expansion have vowed to bring the issue back before voters, but will have to wait at least one more year before a new referendum can be put on the state’s ballot.

Supporters had hoped to gain approval to allow two new casinos at unspecified locations in the state, though the Meadowlands and Jersey City were considered the leading contenders. However, a strong advertising campaign by opponents of the plan—including casino interests in Pennsylvania and New York—helped defeat the referendum.

Murphy and Guadagno—speaking at the last scheduled gubernatorial debate before the election—both voiced support for the casino expansion.

Murphy, who is leading the race in opinion polls, said he was a strong supporter of the plan

 “It’s a huge job creator, and we’re desperate for jobs. No. 2, if it’s not in North Jersey, before we know it, it will be on the west side of Manhattan,” he said during the debate.

Murphy said new casinos could send significant revenue to Atlantic City to help the city increase non-gaming attractions. That provision was part of last year’s pitch for two new casinos to be built in northern New Jersey. Though it lacked specifics, the plan was to have new casinos contribute revenue for development of non-casino attractions in Atlantic City.

Murphy also said the state must remain competitive with neighboring states that allow casino gaming.

“My fear is if there’s a casino on the west side of Manhattan, they won’t send one red cent to Atlantic City. I’d rather that gaming, and those jobs created, be in New Jersey,” Murphy said.

Guadagno also supports expansion, but said the state should wait until Atlantic City’s finances are stabilized before revisiting the issue.

“Once Atlantic City is stabilized, yes, I believe we should put on the ballot the question of whether we have gaming up north. And I agree, if someone is going to get the jobs, we should get the jobs,” she said during the debate.

The state currently controls Atlantic City’s municipal finances and has been working to reduce the city’s massive debt and return it to fiscal stability. While the candidates both supported casino expansion, they differed on what role the state should continue to play in Atlantic City.

Murphy said he wants to return control of the city’s finances to local officials, but have the state continue to provide assistance.

“Atlantic City has gone through hell and back,” he said. I would undo that state takeover. But we’d be there on the ground working with the local elected officials to keep the progress we’ve seen in Atlantic City and a whole lot more.”

Guadagno, however, said the state’s intervention into the city has been positive, such as development tax credits offered by the state which Murphy has criticized.

“The only thing that keeps Atlantic City alive now and attracts businesses to Atlantic City are those tax credits,” she said. “That’s why Atlantic City is on the way back.”

Standard & Poor’s Global Ratings have upgraded Atlantic City’s bond rating slightly as the city—through New Jersey’s fiscal control of the resort—has settled most of its casino tax appeal cases.

The ratings agency upgraded the city bonding rating from CCC to CCC+. The new rating means the city’s bonds carry substantial risks, a slight uptick from the former rating which said the city’s bonds were extremely speculative, according to the Press of Atlantic City.

This year, the state—which took over the city’s finances in November 2016—settled more than $300 million in casino tax appeals for $139 million.

“The upgrade and stable outlook reflect our opinion of the city’s improving financial performance and settlement of significant unfunded tax appeals,” said Timothy Little, S&P Global Ratings credit analyst. “Additionally, while current and projected cash flow statements have not been provided, the city and state have indicated they will continue to make debt service payments on time and in full, including $6.4 million due by Nov. 1 of this year.”

In February, the state agreed to a $165 million tax appeal for $72 million with Borgata Hotel Casino and in August, the state settled more than $137 million in tax appeals with various casino properties for $67 million.

“By settling outstanding tax appeals for a fraction of what was demanded by casinos and reducing overly generous union salaries and benefits, the state has taken action in a way that the city was unable or unwilling to do,” Lisa Ryan, spokeswoman for the state Department of Community Affairs told the newspaper. “However, there remains more work to be done, and we cannot lose sight of the fact that the city’s operating budget will be hampered by structural challenges that started many years ago and will take significant time to fix.”

Also, ratings agencies aren’t exactly bullish on the city’s casino industry as the prospect of Hard Rock International re-opening the former Trump Taj Mahal—and the possible re-opening of the closed Revel casino in the future—has many worried that the city will again see its casino industry oversaturated, which could lead to more casino closings in the resort.

“While there could be short-term economic and budgetary gains, they are unlikely to improve state credit quality. With declining tribal gaming revenues in Connecticut and the erosion of the Atlantic City gaming monopoly in New Jersey, long-term risks from commercial casino gaming are an ongoing credit risk,” according to a Standard & Poor’s report. “As states in the region continue their gambling expansion, coupled with the region’s weak demographic trends, the likelihood that these revenues will meaningfully supplement state revenues over the long term diminishes and will have long-term credit implications.”

The new Deputy Secretary of the Interior, David Bernhardt, wouldn’t commit to supporting a new rule that many tribes support: updating the Indian Traders rule. The deputy secretary is what one senator called, “the COO” of the department. The Bureau of Indian Affairs reports to him.

Bernhardt, in his first appearance before tribal leaders, at the National Congress of American Indians (NCAI), at Milwaukee, Wisconsin, did not promise to push for updating the rule. “I’m not convinced that we won’t,” he added.

Randy Phelan, vice chairman of the Mandan, Hidatsa and Arikara Nation (MHA), explained why so many tribes want the rule, which would end the practice of dual taxation on reservations. In Phelan’s state of North Dakota, both the federal government and the state tax energy resources.

“The state of North Dakota is draining our taxes,” Phelan told Bernhardt. To date, North Dakota has collected $1.2 billion from the reservation’s energy industry. That’s much less than what the tribe itself has collected.

Bernhardt promised to try to learn more about the issue.

Some members of Congress have warned the Trump administration not to get involved in this fight between the tribes and the states.

Meanwhile, the Bureau of Indian Affairs continues to hold several consultations and listening sessions with tribes on the proposed rule.

Ron Allen, chairman of the Jamestown S’Klallam Tribe, urged the administration to “move on this thing as fast as possible.” He stressed the importance of being clear that only tribes can tax on Indian land.

Aaron Payment, chairman of the Sault Ste. Marie Tribe of Chippewa Indians, told Bernhardt that adopting the rule would generate economic activity on reservations and create jobs. He thus subtly reminded him of Trump’s state goal of being pro-business.

The administration recently asked tribes to submit examples of economic opportunities they missed due to worries of being doubly taxes.

NCAI’s general counsel, John Dossett urged members to respond to the survey.

One member of the department, Gavin Clarkson, deputy assistant secretary for policy and economic development for the BIA, is enthusiastic about the proposal. Several months ago, according to the Bismarck Tribune he told a tribal energy symposium: “Together, we’re going to prove that it is in everybody’s best interest for taxes collected at MHA to stay at MHA and be collected by MHA and by nobody else.”

Other Interior officials have commented that state dual taxation has prevented many projects from happening.

At the same time, a number of tribal leaders are lambasting the Trump administration for adding steps to what they already consider an onerous process for putting land into trust.

However, critics of the ease in which tribes had under the Obama administration in taking land far from their reservations and putting it into trust are less scathing.

Tribal leaders spoke their minds at a so-called “listening session” in Milwaukee, Wisconsin scheduled so they could give feedback to members of the Bureau of Indian Affairs.

The man doing the listening, and little of the talking, was John Tahsuda, acting assistant secretary for Indian Affairs, whose job was to run the Bureau until last week’s appointment of Tara MacLean Sweeney, a member of the Native Village of Barrow and the Iñupiat Community of the Arctic Slope, as his boss.

The listening session was also the occasion for the National Congress of American Indians’ 74th annual meeting in the Wisconsin Center.

Yavapai-Apache Nation Vice Chair Larry Jackson, Sr. declared, “We’re talking about doubling the burden on tribes in an already burdensome process. It’s about creating a burden on the tribal nations.”

Outgoing National Congress of American Indians President Brian Cladoosby, who is also chairman of the Swinomish Tribe, said, “What I as a tribal leader am seeing is more burdens, more hoops to jump through.”

Ron Allen, chairman of the Jamestown S’Klallam Tribe was even more critical: “The timing is terrible. That’s the kind of Christmas present you’re going to give us? I don’t think so.” He said that tribes would have to take their grievances to Congress.

He predicted that the proposed rule changes would make it easier for those he called “anti-Indians” to file lawsuits to stop land being put into trust. He urged the administration, “get the hell out of the way,” of tribal sovereignty.

Tahsuda, who is a member of the Kiowa Tribe, did speak a bit. “To my mind, we are trying to streamline the process,” he said. He said the proposed change would create a “two-phased” review for tribes that seek to put land into trust that isn’t adjacent to their reservations.

During a speech to the group of hundreds of tribal leaders, he said, “We understand that there is a need for jobs in Indian Country and this administration offers an important and encouraging opportunity for creative approaches for drawing businesses and economic development to our tribal communities.”

Tribes would be obliged to submit data on tribal unemployment, and be able to show the economic benefits of putting the land into trust. They would also be required to show that they worked with local governments, and how their acquisition might affect local economies.

Gus Frank, chairman of the Forest County Potawatomi Community, was the only tribal member who supported the changes. He said that it would prevent a tribe from acquiring land and opening a casino on what was another tribe’s homeland.

More sessions are scheduled later this year in Seattle, Sacramento and Phoenix.

Moving the focus to Washington D.C., the bureau will soon undergo grilling by the House Subcommittee on Indian, Insular and Alaska Native Affairs. Tahsuda will testify about H.R. 215, the American Indian Empowerment Act, which would allow tribes to take land out of trust and be placed in “restricted fee” status.

The purpose of the bill, says author Rep. Don Young of Alaska is to give tribes more control over their homelands. “The land will keep its immunity from civil regulation, state and local taxation, and likely state criminal jurisdiction,” he wrote in a memo.

Previously the BIA opposed the bill. Tahsuda could signal a change.

The previous administration helped put more than 500,000 acres into trust, and restored another 1.87 million acres through the Land Buy-Back Program for Tribal Nations.

A restructured and re-energized Caesars Entertainment has begun to flesh out its growth plans for Las Vegas and other key markets.

As outlined in a corporate presentation to investors and analysts in New York last week, highlights include ongoing renovation of more than 10,000 Las Vegas hotel rooms, a ramp-up of the company’s Total Rewards loyalty program and plans for monetizing the Caesars brands through a variety of partnerships worldwide.

President and CEO Mark Frissora indicated plans are progressing for a $300 million-$500 million convention center slated for completion on the Las Vegas Strip in two years on land currently used as parking lot east of the High Roller thrill ride.

“The convention center is going to be 300,000 square feet,” he said. “It will be very functional; it will host small and midsize meetings. We’re not doing exhibit space.”

The company also said it is finalizing strategies for the development of seven acres in front of Caesars Palace, 39 acres adjacent to The Linq and another 50 acres near Bally’s, Paris Las Vegas and Planet Hollywood.

Internationally, he emphasized Caesars’ commitment to constructing a China-facing destination resort in South Korea and said the company wants to be in the running for a casino license in Japan and in Brazil, if legalization becomes a reality there.

He also said the company is looking for new ways to grow its global footprint through the licensing of its best-known brands―Caesars, Harrah’s, Horseshoe, Rio, Planet Hollywood, Total Rewards and the World Series of Poker among them. The company is looking for 16-17 percent management fees from prospective branding partners and possibly equity stakes and profit-sharing as well.

“Our brands are powerful and wanted by developers all around the world,” Frissora said. “We’ve never done this before.”

Celebrity dining concepts and A-list entertainment will continue to figure prominently in the company’s domestic marketing arsenal, hand in hand with a focus on expanding Total Rewards and developing other strategies to appeal to the growing millennial demographic on both the gaming and non-gaming sides of the business.

One strategy will include an aggressive program for displaying food and game offers to customers as they emerge from concerts, using discounted offers to increase spending at other sites within the properties.

Christian Stuart, executive vice president of gaming and interactive entertainment, said gaming floors are being revamped with new proprietary side-bet games on tables and fresh slot machines that will include skill-based components.

He noted that a new mobile gaming platform has been launched and said the company is working with Gamblit, GameCo and Competition Interactive for new skill-based offerings designed to be available for free on social platforms so that players can easily transition to paid games once in the casino.

In related news, Caesars Entertainment Operating Co. Inc., the company’s largest subsidiary, has secured a $265 million term loan two weeks after exiting a comprehensive restructuring under the protection of U.S. Bankruptcy Court that has slashed some $10 billion of its debt.

The funding will be added to existing resources valued at around $1.43 billion and used to repay senior secured notes issued by the holding companies for Harrah’s Philadelphia Casino and Racetrack, the company said.

Frissora said the loan, combined with other recently announced refinancing packages, will reduce CEOC’s debt by a further $290 million.

Plot “worthy of a spy thriller”

Steve Wynn, chairman and CEO of global gaming operator Wynn Resorts, has been linked to a plan to deport a Chinese businessman seeking asylum in the U.S.

According to the Wall Street Journal, Wynn personally delivered a letter from the Beijing government to President Donald Trump, asking him to send dissident Guo Wengui back to China. Wynn is heavily invested in the Chinese territory of Macau; in 2016, his properties there accounted for more than 60 percent of Wynn casino net revenues, according to the company.

The Journal called the alleged plot “worthy of a spy thriller.”

Guo, described by CNBC as one of the top 80 richest people in China, is also a member of Trump’s exclusive Mar-a-Lago club in Palm Beach, Florida. He fled his home country in 2014, and on April 19 China’s foreign ministry said Interpol issued a “red notice” for his arrest. Guo was called a “vocal critic of alleged government corruption in China.” But he is also under investigation for crimes including bribery and rape.

According to the Journal, in a June meeting in the Oval Office, Trump referred to Guo as a “Chinese criminal” who deserved to be immediately deported. “We need to get this criminal out of the country,” Trump said.

In May, the UK Guardian reported, a group of Chinese security officials visited Guo in New York and issued threats about critical tweets he’s sent about the government. They also reportedly tried to persuade him to return to his homeland. Guo apparently did not bend to the pressure, and in fact recorded his conversation with the Chinese officials and posted part of it online. The FBI later got involved, and ordered the Chinese agents to leave the country.

Wynn Resorts Marketing Director Michael Weaver told the Journal in a written statement, “The report regarding Mr. Wynn is false. Beyond that, he doesn’t have any comment.”

A Justice Department representative made it clear that if Wynn acted in the manner described, he was violating the law. “It is a criminal offense for an individual, other than a diplomatic or consular officer or attache, to act in the United States as an agent of a foreign power without prior notification to the attorney general,” the representative told the Journal.

Governor to study gaming provisions before acting

The Pennsylvania legislature passed a budget reconciliation bill to balance the state budget that has been in place since July 1, in a package that includes legalization of online gaming and daily fantasy sports, plus a variety of other gaming expansion measures that include authorization of up to 10 satellite “mini-casinos” in areas without current land-based casinos, tablet gaming at airports, and video gaming terminals, or VGTs, at truck stops.

The bill now goes to the desk of Governor Tom Wolf, who has opposed some of the gaming expansion measures in the past. Wolf commented that he will take a few days to study the gambling proposals before making his decision on whether or not to sign them into law.

Tucked inside a massive bill that relies on borrowing, legalized fireworks sales and new taxes on natural gas drilling and online retail sales, the gaming expansion package, projected to generate $200 million in revenue against the $2.2 billion budget deficit, was the last and most contentious portion of the package.

While Wolf’s signature would legalize online gaming, whether or not land-based casinos apply for iGaming licenses remains to be seen. While the iGaming provision sets a revenue tax of 14 percent for online poker and table-game revenue, online slot games—the most profitable form of iGaming—would be taxed similar to land-based slots at 52 percent, a rate most Pennsylvania operators have called a non-starter that would prevent them from seeking an iGaming license.

The online gaming provision would allow licensed commercial casinos—both in Pennsylvania and outside the state—to apply to the Pennsylvania Gaming Control Board for licenses to provide gambling websites for PC and mobile applications for use by people within the state. License fees would be $4 million each for online poker, table games and slot games, or $10 million for all three.

The iGaming provision also would extend to the Pennsylvania Lottery, which would be authorized to offer keno and other games online, including existing instant-ticket and raffle games. The lottery would be prohibited from offering casino-style games online.

Lawmakers included the online lottery provision to boost lagging sales. The Pennsylvania Lottery ended the recent fiscal year with an $18 million deficit, the first shortfall in the lottery’s 40-year history.

The VGT provision represents a compromise many thought would be rejected by Republican House leaders, who have been pushing for as many as 10 VGTs at each of thousands of liquor-licensed establishments across the state—a proposal that has been vehemently opposed by the state’s current casino licensees as unfair competition that ignores the billions they invested in the state’s gaming industry.

The VGT provision in the legislative package passed by the Senate on Wednesday and by the House on Thursday would allow only five machines at locations that meet a specific definition of a truck stop, with revenue split between the state, license holders, terminal operators and host municipalities.

Among the bill’s other provisions:

• Daily fantasy sports betting would be regulated and taxed, charging DFS operators a $50,000 license fee and taxing revenues at 15 percent.

• The state’s two resort-style casinos, which are limited to 750 slots and require patrons to spend at least $25 in the resort for entry to the casinos, would be relieved from those requirements of the 2004 gaming law for a fee of $2.5 million on slots and $1 million on tables.

• The 2004 provision limiting majority owners of one casino to a one-third stake in a second casino would be repealed.

• Casinos could apply to the gaming board to offer sports betting for a license fee of $10 million, should the federal ban be repealed. Online sports betting would be permitted.

• Casinos could apply to operate interactive gaming parlors at Pennsylvania airports, with consent of the local airport authorities. Eight international and regional airports in the state would be authorized to offer online-style gaming on tablets.

• The casino host fee to local governments, struck down last year by the state Supreme Court, would be reinstated at a flat $10 million annual fee to local governments. Operators of smaller casinos have said they will challenge the new fee on the same basis as the old fee—smaller casinos would pay a higher percentage of their revenues in taxes than their larger competitors.

• Each of the state’s 10 larger casinos would be authorized to bid on a satellite casino license that would allow up to 750 slot machines and 10 table games at a location that is outside a radius 25 miles from an existing casino. Under the bill, bidding would start at $7.5 million with table-game licenses costing an additional $2.5 million. License fees and taxes would go to local and state governments, public schools and civic development.

Even before the Thursday House vote, there were already threats of lawsuits to block the law if signed by Wolf. The Reading Eagle reported that Penn National Gaming is considering filing a lawsuit against the state over the 25-mile buffer zone for satellite casinos. Penn Vice President of Public Affairs Eric Schippers commented that two-thirds of the gamblers at the operator’s Hollywood Casino in the Harrisburg area come from more than 25 miles away, because Hollywood is the only casino in the mid-state region.

“We’re considering our legal options because this would have a uniquely punitive effect on our casino, more so than any other casino in the state,” Schippers told the Eagle. “We’re out in central Pennsylvania alone, so again, we could be surrounded by licenses that would have a profoundly negative impact on our casino and could result in job losses and cannibalization of our business.”

Schippers also called the 470-page gambling package an “ill-conceived plan that has been rushed through.”

That same sentiment was expressed by some lawmakers. “We will become a gambling state without parallel,” said Rep. Steve McCarter, according to the Associated Press. Others complained that there was too little time to study the complicated package of legislation, which some said was loaded with perks for individual districts. Philadelphia-area Rep. Margo Davidson called it “corporate welfare for casinos and special carve-outs for special people.”

Among those carve-outs was repeal of the casino ownership limit, which would render moot a lawsuit holding up construction of Philadelphia’s second casino over ownership stakes of one of the principals. One perk favors Delaware County area development projects that would benefit from taxes on Harrah’s Philadelphia, and another would give extra money to counties with lower-performing casinos.

Rep. Scott Petri, chairman of the House Gaming Oversight Committee, complained about the definition of “truck stops” in the VGT provision. In an interview with the Associated Press, Petri said the definition is “so broad, anything you think of as a convenience store is a truck stop. You literally could drive a truck through the definition and its ability to be misused.”

Shawn Scott’s campaign to persuade voters to allow him to be the only person to build a third casino in Maine is just two weeks away from being decided by the ballot box. Question 1 would authorize a casino in York County.

Scott, an out-of-state gaming entrepreneur with several companies based off-shore, was the man who introduced casino gaming to Maine, back in 2003. Now there are two casinos, in Bangor and Oxford. Scott wants to be allowed to build a third, in York County. That’s in a state of 1.3 million.

Although Scott’s sister, Lisa Scott, spearheaded the $4.3 million effort to qualify a casino initiative, she eventually left as the official head of Progress for Maine, she left when the state’s ethics commission began peppering her for documents relating to the donors for the campaign. Shawn Scott then became the public face of the Question 1 effort.

Critics accuse Scott of trying to buy an election, get a license, and then sell it for a big profit, as he did in 2003 when he sold his rights to a casino to Penn National Gaming.

Maine Governor Paul LePage has blasted the casino proposal, calling it “a stacked deck,” and adding, “It’s a stacked deck. Once again, Maine’s referendum process has been hijacked by big money, out-of-state interests hoping to pull the wool over your eyes.”

He charges that the third casino will merely drain away profits from the two existing casinos, without generating any new economic activity. The campaign claims that a York County casino will create $45 million in state tax revenue. It would create 2,165 permanent jobs and 2,767 temporary construction jobs, while generating $64.4 million in earnings from operation of the casino, and more than $100 million in earnings from construction.

The Question 1 campaign is being shepherded by the same consulting firm that took the Brexit vote over the finish line in Great Britain about a year ago. The campaign has already spent $1.5 million on the election.

Last week the Progress for Maine announced a new supporter: the Aroostook Band of Micmacs. The campaign unveiled an ad featuring the band’s Vice Chief Silliboy, who declares, “I believe that a gaming facility in Southern Maine would benefit most of the people throughout the state,” and claims the casino will enable his tribe to pursue new economic development.

Campaign spokesman Rebecca Foster commented, “We’re excited to have the support of the Aroostook Band of Micmacs, particularly since Question 1 will create new economic benefits for Native American tribes and residents throughout Maine,” adding, “A gaming and entertainment center in York County creates so many opportunities for taxpayers, job seekers and business owners across the state. We hope Maine voters will join us in voting Yes on Question 1 to keep jobs, tourism and tax revenue in Maine.”

The Aroostock Band, and other tribes in the state receive funding from any casino operating in the state. Question 1 would give them $1 million a year. Other beneficiaries would be veterans, property tax relief and senior citizens.

Scott’s career has been controversial. He has opened casino hotels and racinos, but also been denied license and sued multiple times. His career in gaming appears to have been born in the 2003 campaign when voters approved what would eventually become the Hollywood Slots in Bangor.

He sold that license for $51 million after state regulators raised “significant issues about the application including the fact that some of the people intimately involved had significant criminal records.”

Several years later he pulled off a similar feat in Louisiana where he obtained the rights for a casino after spending $10 million and sold it for $130 million.

Scott altered his playing field to the international level—until last year when it was unveiled that he had been behind an effort in neighboring Massachusetts. An effort that fell afoul of Bay State ethics regulators for failing to report the source of donations—a similar mishap to what has befallen the Maine campaign.

Commission on Governmental Ethics and Campaign Practices has been investigating the campaign’s finances for several months, and will make a recommendation by October 31, which could include fines for providing inaccurate or late reporting information.

Scott was asked last week on a call-in radio show if he intends to sell the license if his efforts succeed. He said he intended to operate the casino himself.

He said, “We don’t have any intention of cashing out and leaving. We want to be here for the long haul, we want to develop this project.”

When the radio talk host asked why Scott sold his license in 2003, he answered “Bangor turned out to be a win-win for everybody and it’s producing still $37 million a year in tax revenue. Sometimes in life businesses don’t work out but in the Bangor case that was a win-win for everyone.”

Maine lawmakers want to change the referendum process, calling the Progress for Maine campaign the “poster child” for a process that has jumped the rails.

Senator Roger Katz, chairman of the Legislature’s Government Oversight Committee, declared last week that the campaign twists the Maine Constitution’s intent when it created the referendum.

“It is wealthy interests, often from out of state, that are now the movers and negotiators of citizens’ initiatives and we really need to get back to the basics of why we have this process in the first place,” said the senator. His committee has invited Scott and others backing the initiative to appear before it, but they declined.

Senator Katz called it “kind of ironic” that Scott would refuse to speak to his committee, but would go on a radio talk show. He ticked off Scott’s run-ins with gaming regulators in several other states and in Thailand, and said his efforts in Maine “ought to make Maine people’s blood boil.”

Scott’s initiative is written in such a way that only he or his company could apply for a York County gaming license, which some experts estimate could be worth $150 million.

This year several lawmakers failed to pass two bills that would have amended the initiative process, including increasing the number of signatures required to put one on a ballot, and to require that the signatures come from a wider geographical distribution.

Some legislators point out that the legislature could amend or repeal any measure passed by initiative.

Not all lawmakers oppose Question 1. In an op-ed last week Tom Saviello, a state senator and Lance Harvell, a state representative, declared, “We can’t turn down new state revenue, 5,000 jobs, a boost in tourism and help for the struggling harness racing industry.”

They added, “There will be no hidden taxes. If anything, property taxes may go down as a result of this initiative. Question 1 conjures up $11 million a year for Maine’s Department of Education, $3 million for tuition relief, $3 million in property tax relief, $2 million to the General Fund, and more than $1 million for drug education and addiction prevention. This is meaningful revenue coming at no expense to the state nor the citizens of Maine. Casinos already give the state roughly $50 million a year in similarly tax-free returns, and we now have the chance to almost double that.”

The $2.5 billion Wynn Boston Harbor rising in Everett, Massachusetts on the banks of the Mystic River is starting to take shape, aiming toward a June 24, 2019

As fall deepens the construction site is a bee hive of activity, of cement trucks, earth movers, workers in hard hats in vehicles and on foot—more than 1,000 of them. As busy as it will ever be, Wynn is spending about $2.5 million a day.

The section farthest from the river will include the hotel and casino “back-of-the-house” functions, such as offices, employee dining and laundry. That work is the most completed, and is safely enclosed from the elements.

The casino itself is closer to the river and is built over an underground parking structure.

The floor is nearly poured for this section as is the mezzanine level that will give a panoramic view of the gaming floor and its thousands of slot machines.

The hotel lobby will overlook the river. Two large escalators will connect the lobby to the mezzanine. At their base owner Steve Wynn plans to install the Jeff Koons sculpture of Popeye he purchased for $28 million, and which is currently housed in Las Vegas resort.

The tower itself will be 27 stories. Currently it is rising at a rate of one story per week. Soon the signature Wynn bronze glass skin will begin crawling up the sides.

But it doesn’t stop at the water’s edge, because currently barges are dredging the river bottom to remove pollutants and make the water safe for ferry boats.

The developer is also restoring the salt marsh that once existed here centuries ago.

Construction will continue through the winter.

The Delaware Video Lottery Advisory Council (VLAC) is again ready to recommend that state lawmakers cut the table-game revenue tax from its current 29.5 percent to 15 percent, according to comments by the council’s chairman to a local TV news organization.

Created in a 2003 law, the VLAC includes state Lottery Director Vernon Kirk, supplier representatives, and presidents of the three racinos—Edward J. Sutor of Dover Downs, Patti Key of Harrington Raceway and Bill Fasy of Delaware Park. The council is charged with making recommendations to Delaware lawmakers on ways to improve state revenue from the three casino properties.

For each of the past several years, the council has recommended slashing revenue taxes and fees for the racinos to compensate for business lost to new competitors in Maryland and Pennsylvania. Sutor, president and CEO of Dover Downs and current chairman of the VLAC, told local news channel WBOC 16 that this year’s recommendations, due in a January report, will most definitely include a cut to the tax on table-game revenues.

It will be a revival of a recommendation made in each of the past several years—that the tax on table revenues be reduced from the current 29.5 percent to 15 percent, which would be more in line with the tax charged in neighboring states.

“We can’t sustain ourselves losing money,” said Sutor, who noted that when fees and labor costs are factored in, the three racinos are actually losing money on their table game operations, which is in line with the VLAC reports of the past three years.

In last year’s VLAC report to lawmakers, the council described the justification for a table tax reduction.

“Delaware has the highest table game tax rate in the country,” the report stated. “Maryland’s rate is 20 percent, Pennsylvania’s rate is 14 percent, and New Jersey’s is 8 percent. With annual license fees, Delaware’s effective revenue share rate on table games is almost 40 percent, and combined with the overhead required in terms of payroll costs makes table game operations unprofitable for the state’s three casinos.”

Delaware Governor John Carney, in an interview with WBOC 16, acknowledged that his government is trying to determine some tax relief for the casinos, but that it is too early to talk about individual proposals.

“It is really hard, because it probably means changing the formula in some kind of way that benefits them to the detriment (of the state) to a certain extent,” Carney said.

In just the past three years, the table-tax proposal has been included in the council’s recommendations but has failed in the state Senate. It was inserted then removed from SB 220 in 2014, and then it was included in SB 30 in 2015 and SB 183 in 2016, each of which died without reaching a floor vote.

Meanwhile, in anticipation of the arrival of table games before the end of the year, the Casino at Ocean Downs in Berlin, Maryland is recruiting potential candidates to become dealers. A state program is funding a tuition-free dealer school. Ocean Downs General Manager Bobbi Sample said, “When students successfully complete a class in blackjack, they will have the opportunity to audition to become a dealer here at Ocean Downs. They will continue their education at the school and learn how to deal other games and expand their opportunities.”

The new dealers and table games will be stationed at a 35,000 square foot expansion at the casino. “Construction of the expansion is moving forward. Our goal is to open the expansion and table games by New Year’s Eve,” Sample said.

Ocean Downs opened in September 2011 as the first of four of the original locations the Maryland legislature approved for casinos in different geographic areas of the state. Since then the casino has offered 800 video gaming machines, including traditional slots and simulated electronic table games. The casino has remained the sole gaming facility among the six in Maryland that does not offer live table games.

The completion of the $75 million Tiverton Casino by Twin River has been delayed for three months due to a slow permitting process and construction restrictions by the town of Tiverton, Rhode Island says the developer.

The voters of the state and the town approved of moving Twin River’s casino from Newport to Tiverton, although the town’s vote was very narrow. At that time, the developer promised an opening of July 2018 for the casino, which is opening a few hundred feet from the Massachusetts state line, and is a gauntlet thrown in the face of the MGM Springfield.

Under recent questions by the city council, Twin River pushed back the opening to October 2018.

The company’s lawyer last week sent an email to the Tiverton Casino Subcommittee, outlining new scheduling possibilities. “His assessment reflected the challenges of the site, the in-depth zoning and planning process which occurred after the referendum and the wishes of the town to restrict hours of construction operations,” said a spokesman for Twin River. There is also a problem getting timely delivery of materials—and of the city refusing to extend the number of hours that workers can work.

The spokesman said that once the building is enclosed, late this year, it will have a better idea of when the casino can open. “If we can advance the likely October 2018 opening date, we will,” said the spokesman.

The state isn’t happy about the delay, because it was planning on an additional $26.4 million. Gaming is the state’s third source of revenue. According to the Department of Revenue, the state will lose $2.2 million for each month the casino is delayed.

Building crews are doing site and foundation work at the casino location. Plans are for a 77,500-square foot casino with 1,000 slots and 32 gaming tables. There will also be an 84-room hotel and two-level parking structure.

Florida state Senator Tom Lee recently announced he may introduce a constitutional amendment to ban greyhound racing in the state. Lee, a member of the Constitution Revision Commission and a candidate for chief financial officer of Florida, has spoken with several dog racetrack operators to “take their temperature,” an industry lobbyist said.

Lee is reviewing what effect ending greyhound racing might have on jobs. Besides live races, they also are simulcast and wagered upon across the U.S. Lee said, “It wouldn’t be optional. This isn’t decoupling. This would be a mandatory ban for dog racing in Florida, to just prohibit it.”

Decoupling refers to changing the state law requiring dog and horse tracks to run live races in order to offer card rooms and other gambling; tracks still could offer dog races if they choose to.

Lee’s proposed amendment must be filed by October 31 under state law, which also requires a Constitution Revision Commission to be formed every 20 years to review and recommend changes to the state constitution. Any amendments placed on the 2018 statewide ballot must be approved by 60 percent of voters.

The Cordish Companies last week completed the exterior phase of construction on the Live! hotel in Maryland the placement of the final steel beam in a traditional “Topping Off” ceremony. The 350,000-square-foot luxury hotel, located adjacent to Live! casino, features a 17-story hotel tower, 310 guest rooms, an event center, meeting spaces, a day spa/salon, and David’s Café, a 24/7 dining establishment. It is the first hotel in the country to carry the Live! brand.

Located within the Arundel Mills Commercial District next to Arundel Mills Mall, Live! Casino & Hotel will offer guests premier gaming entertainment at one of the country’s top commercial casinos, along with luxury accommodations and world-class customer service. Live! also operates Live! Lofts, a boutique hotel minutes from the casino. Together, the properties will offer guests 560 rooms for overnight accommodations and multiple spaces for events and private meetings.

“We are now one step closer to creating an experience that does not currently exist in the region today,” said David Cordish, chairman of The Cordish Companies. “Nowhere else can you find this mix of dynamic gaming, first-class accommodations, entertainment, dining, and retail, plus our trademark customer service. Guests know that when they come here, they are treated like part of our family.”

The Cordish Companies has developed such iconic hospitality destinations as Charleston Place Hotel in South Carolina, and the Seminole Hard Rock Casino Hotels in Tampa and Hollywood, Florida.

Live! Hotel and Live! Lofts are the first two hotels to carry the Live! moniker and round out The Cordish Companies’ portfolio to include both luxury and boutique hotel accommodations. Expansion of both brands is planned across the United States and internationally.

“We can do things differently because we are a family-owned company,” said Blake Cordish, vice president of The Cordish Companies and head of the real estate division. “The combination we are now offering with the luxury Live! Hotel, Live! Lofts boutique hotel, and one of the nation’s top casinos is unmatched. We are especially excited to be introducing this concept in our family’s hometown, where we have received so much support and worked very hard to give back to the community.”

With completion scheduled for early2018, Live! Hotel will feature comfortable guest rooms designed with a modern, contemporary flare; along with public spaces showcasing floor-to-ceiling windows, high ceilings accented with striking chandeliers, and wood and polished marble throughout.

The Grand Event Center will house a 1,500-seat concert venue with built-in performance stage and banquet seating for up to 800 guests. Dining options include David’s Café, with dishes inspired by Chairman David Cordish’s world travels. Guests can relax at the Live! Spa luxury day spa & salon, featuring high-end products, a full menu of spa services, and a state-of-the-art Fitness Center.

Live! Hotel represents a massive additional investment in Anne Arundel County, additional gaming revenue and taxes to the State of Maryland, approximately 400 new jobs for local and regional residents, approximately 550 construction jobs, nearly 1,000 new parking spaces, and numerous new vendor opportunities for local, minority, women-owned, and veteran-owned business.

Tutor Perini Building Corporation currently serves as the general contractor. The Cordish Companies has also assembled a team of contractors, project architects and designers for the project, including Klai Juba Wald Architects, McLaren Engineering Group, Laurence Lee Associates, Cleo Design Corporation, Selbert Perkins, Corsi & Associates, Lynne Curry Spa Consulting, Giovanetti Schulman Assoc., and EDSA. Together, these celebrated firms are responsible for creating some of the most luxurious casinos, resorts and hotels in the world.

Table-game dealers at Horseshoe Casino Baltimore will receive an hourly pay increase of at least 10 percent under a newly ratified contract negotiated with parent Caesars Entertainment by the National Gaming Workers’ Coalition, a group of five unions representing around 1,000 gaming and food and beverage workers.

Under the new five-year contract, 570 table-game dealers will receive increases of $6.30 per hour, plus up to an additional $1.75 an hour depending on their knowledge of various games. For casino employees who count on tips for the majority of wages, base pay will increase from the current $3.72-$10.76 per hour to $4.66-$11.20 per hour beginning this month. Further increases will occur in October 2021, with that range ending up at $14.76-$31.39 per hour.

The contract also entails an improved health contract—a Kaiser Permanent plan that requires no deductibles, replacing a plan requiring deductibles of up to $3,300 per year.