Indy Gaming: Station Casinos disputes disciplinary complaint allegations but is replacing its sports betting system

Good morning, and welcome to the Indy Gaming newsletter, a weekly look at gaming matters nationally and internationally and how the events tie back to Nevada.

If a colleague or associate emailed this newsletter to you, please click here to sign up and receive your own copy of Indy Gaming in your inbox. - Howard Stutz


Less than a month after Nevada gaming regulators filed disciplinary action against Station Casinos over serious glitches in the company’s sports wagering system, the casino operator said the matter should be dismissed.

The company is also dumping the system and replacing it with new software.

In an answer to a two-count complaint filed by the Gaming Control Board on Sept. 13, attorneys for Station Casinos and its parent Red Rock Resorts said the company voided approximately 348 betting tickets wrongly issued for events where the outcome was already known.

Neither customers, the company nor the state “achieved any monetary gain or suffered any monetary loss as a result of the ostensible wagering transactions,” Station Casinos said in a 10-page response filed with the Control Board on Oct. 7.

The company said it disagreed with the “characterization” of the incidents listed by the regulators, who asked the Nevada Gaming Commission to impose a yet-to-be-determined fine.

“Because the Board cannot cite to a violation of any specific gaming statute or regulation by Station, because Station took actions in defense of the integrity of the gaming industry in order to stymie patrons seeking to game the system, and because there were no economic consequences whatsoever as a result of the ostensible transactions, there is no legitimate legal basis for disciplinary action against Station in this case,” Station attorneys wrote.

Still, the company’s troubled sports betting system, provided by Stadium Technology Group, is headed to the scrap pile.

Gaming software provider GAN Limited on Friday announced an agreement to build out the sports betting infrastructure for Station Casinos for the company’s retail sportsbooks, betting kiosks and the STN mobile app.

GAN announced the deal hours before a planned “investor day” with analysts and shareholders. GAN Vice President of Investor Relations Robert Shore termed the contract a “significant milestone” for the Southern California-based technology provider because it will be its first with a Nevada casino operator. The company currently provides technology for Station Casinos’ free play social gaming platform. 

GAN’s sports betting platform is being used by sports betting operators in six states. The company provides the sports wagering technology for casino and racetrack operator Churchill Downs in five states, including recently launched operations in Arizona.

In Nevada, the GAN sports betting system still requires regulatory technical certification and licensing by the Control Board and the Nevada Gaming Commission.

The company, however, has caught the attention of the investment community as it moves to expand its presence in the ultra-competitive U.S. sports betting market. Currently, 28 states and Washington D.C. have legal and regulated sports betting, with four more states ready to launch.

B. Riley Securities gaming analyst David Bain suggested GAN’s move into Nevada could provide a showcase opportunity for the upstart company. He estimates Station Casinos has roughly 40 percent market share of the Las Vegas locals sports betting revenue.

Bain calculated the agreement as being worth $5 million in revenue annually to GAN starting in the second half of 2022.

Jefferies gaming analyst David Katz said GAN’s sports betting system offers additional tools and data services for operators.

“We believe the company's business-to-business offering presents a meaningful opportunity, as we expect expansion within the U.S. should support the company's product line,” Katz told investors in a research note.

Macquarie Securities gaming analyst Chad Beynon, who met with GAN officials during this month’s Global Gaming Expo, told investors the company is pushing into expanding sports betting markets in Canada and Latin America.

“Management continues to speak to a full pipeline and highlighted a meaningful level of conversations not only around new client opportunities but also displacement of incumbents,” Beynon wrote in a post G2E research note.


The view of the $1 billion Las Vegas Convention Center expansion on Tuesday, June 8, 2021. (Jeff Scheid/The Nevada Independent)

LVCVA land sale could lead to a Las Vegas casino ‘unlike any other’

Count Bo Bernhard, executive director of UNLV’s International Gaming Institute, among the supporters of a South American gaming company that wants to build a casino on the Las Vegas Strip.

Last week, the Las Vegas Convention and Visitors Authority agreed to sell a 10-acre parcel at the Strip and Elvis Presley Boulevard for $120 million to CB Investment SpA, a company owned by South American businessman Claudio Fischer. 

The agreement requires the company to develop a resort or hotel on the site, which was part of the 26-acre Riviera Hotel site the LVCVA acquired in 2015 for $182.5 million. The Rat Pack-era resort was demolished a year later and the site now houses the Las Vegas Convention Center’s $1 billion West Hall expansion.

“We’ve been working for the past two-and-a-half years to market and sell the 10-acre parcel,” LVCVA CEO Steve Hill said at last week’s board meeting. “Towards the end of 2019, Claudio made an offer the LVCVA was prepared to accept in early 2020, then the pandemic hit. The conversations resumed in late 2020, early 2021 and that is what led us to where we are today with this land sale.”

Fischer is co-founder of Sun Dreams, the largest casino resort operator in Latin America, with 19 properties in Chile, Argentina, Panama, Colombia and Peru. The hospitality-focused company has gaming, hotels, 66 food and beverage outlets and convention centers.

Bernhard doesn’t know Fischer, but said he had visited both Sun Dreams and Monticello, the company’s primary Chilean resort, multiple times. He said the company would “bring a new flavor to the casino experience” in Las Vegas.

Bernhard compared the South American casinos to the Rio Resort’s once-popular “Masquerade Show in the Sky” aerial parade at the off-Strip casino. The show has been closed since 2013.

“Their casino floor is unlike any in Las Vegas,” Bernhard said. “Think of the Rio show in the sky but at ground level. It’s a party unlike any other in global gaming. They will add real creativity and fun to the Strip.”

Bernhard also noted executives from the company graduated from the International Gaming Institute’s annual Executive Development Program.

Fischer’s business portfolio ranges from casinos to residential and commercial real estate, primarily in South America.

Hill said Fischer has long been interested in Las Vegas. He and LVCVA Chief Financial Officer Ed Finger traveled to Chile to meet with Fischer a few months before the pandemic hit. 

“We visited his flagship property, the Monticello, south of Santiago, Chile,” Hill said. “The property is beautiful and features a convention center, arena, and a hotel and casino in a really great setting.”

He added that Fischer has long had an interest in Las Vegas.

“Several of our companies here in town know Claudio, know him to be a very credible operator and someone who we would welcome to Las Vegas,” Hill said. “We think Claudio would be a great neighbor.”

The LVCVA plans to use proceeds from the sale for LVCVA capital projects, including the next phase to renovate older portions for the Las Vegas Convention Center’s 3.2 million square-foot campus.


Photo of The Cosmopolitan Las Vegas
The Cosmopolitan Las Vegas as seen on May 5, 2011. Allen McGregor/Courtesy under Creative Commons

Analyst wants to know if Penn National wants to operate a Strip resort

Does regional casino operator Penn National Gaming still have eyes for Las Vegas? The answer to that question may come on Nov. 4.

In an Oct. 14 research note to investors, J.P. Morgan gaming analyst Joe Greff brought up Penn’s purported interest in owning a Strip resort as one of a half-dozen items he will be paying attention to when the regional gaming company releases third-quarter results.

Penn National operates 43 casinos in 20 states, including M Resort in Henderson and two small casinos in Jackpot, located in the northeast corner of Nevada near the border with Idaho.

“Penn recently indicated interest in buying a Las Vegas Strip property? Is this interest still alive and how would it tie into its other businesses?” Greff wrote. The analyst didn’t respond to an emailed question on when Penn executives made that remark.

At least one property in which Penn National took an interest is off the market. The company was taking a hard look at the Cosmopolitan of Las Vegas, a source close to the casino operator told The Nevada Independent. “It’s a unique property,” the source said.

On Sept. 27, Blackstone announced it was selling the Cosmopolitan to an ownership group for $4.055 billion with MGM Resorts International paying Blackstone an additional $1.625 billion to operate the resort under a lease agreement.

In March 2020 — at the outset of the pandemic — Penn sold Tropicana Las Vegas to Gaming and Leisure Properties in a deal valued at $337.5 million. Penn, which bought the Tropicana in 2015 for $360 million, is still operating the casino under a lease agreement.

In April, Bally’s Corp. agreed to buy the resort for $308 million but the transaction is still awaiting Nevada regulatory approval. 


An employee prepares a roulette table during opening night at Resorts World Las Vegas on Thursday, June 24, 2021. (Jeff Scheid/Nevada Independent)

Commercial casino industry nationwide headed toward a record year

The gaming industry’s nationwide post-COVID rebound didn’t slow down in August.

For the sixth consecutive month, commercial casinos in 25 states recorded more than $4.4 billion in gaming revenue, according to statistics compiled by the American Gaming Association (AGA).

Through August, the nation’s 2021 commercial gaming revenue was more than $34.15 billion, already surpassing the nearly $30 billion generated during COVID-19 ravaged 2020 and 18 percent ahead of the same period in 2019.

In 2019, commercial casinos collected $43.6 billion in gaming revenue, the highest-ever annual total.

Gaming revenue increased in 20 of the 25 states compared to August 2019. Four states saw modest revenue declines, but Louisiana casinos suffered a 28.2 percent drop after Hurricane Ida forced many of the state’s southeastern casinos to close toward the end of the month.

After the first eight months of 2021, 19 of 25 commercial gaming states are tracking ahead of 2019 gaming revenue levels, including Nevada, which is up 8 percent and on pace to crack the $12 billion annual revenue figure the casinos statewide have reached just three times, the last being in 2019.

According to AGA reports, gaming revenues from traditional land-based and riverboat casinos during August accounted for $3.92 billion of the monthly total. Sports betting revenues of $217 million from 22 states and Washington D.C., and online gaming revenues of $305 million from five states during August accounted for 11.7 percent of the nations’ commercial gaming revenue in the month.


Aliante race and sportsbook in North Las Vegas on Monday, Aug. 31, 2021. (Jeff Scheid/Nevada Independent)

Other items of interest

New Jersey became the first state to report single-month sports wagers of more than $1 billion, according to the New Jersey Division of Gaming Enforcement. The $1.01 billion figure in September was fueled by wagering on college and professional football.

Analysts said New Jersey’s large population and the state’s proximity to New York City helped boost the numbers. New York does not allow mobile sports wagering but many New York City residents have opened sports betting accounts with racetracks in Northern New Jersey and Atlantic City casinos and will often cross into The Garden State to make wagers. According to New Jersey gaming regulators, more than 90 percent of the wagers during September were placed through mobile devices.

“By embracing mobile sportsbooks and making sports betting more accessible than even Nevada, New Jersey has now achieved an important milestone of more than $1 billion wagered on sports in a single month.” Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, which studies the gambling industry, told the Associated Press.

New Jersey allows remote registration for mobile sports betting. Nevada requires customers to initially register their mobile sports betting accounts in person at casino sportsbooks.

Nevada’s single-highest month for sports wagers was in October 2020, when sportsbooks took in $659.6 million. According to the Gaming Control Board, Nevada sportsbooks have taken 36.7 percent more in sports wagers through August, compared to the same eight months of 2019, which saw a single-year record of more than $5.3 billion in sports bets.

Sandra Douglass Morgan (Photo courtesy of the Nevada Gaming Control Board)

Former Gaming Control Board Chairwoman Sandra Douglass Morgan was named to the board of directors of Las Vegas-based Allegiant Travel Company, the parent of Allegiant Airlines.

Morgan, an attorney who operates her own legal consulting firm, was the first African American woman to chair the Control Board after being appointed by Gov. Steve Sisolak in 2019. She spent two years as chairwoman and led the passage and implementation of cashless wagering regulations. Morgan also spearheaded the adoption of regulations that ensured all Nevada gaming licensees adopted policies prohibiting discrimination and harassment. Morgan was a member of the Nevada Gaming Commission before being named to the Control Board.

"She is a dynamic leader with a proven ability to navigate today's most complex industry issues, from labor regulations to cybersecurity,” Allegiant Chairman and CEO Maurice Gallagher said in a statement.

Morgan, who has held legal and government relations positions with MGM Resorts International, the city of North Las Vegas and AT&T Service, currently serves as an independent director with Fidelity National Financial.

The announcement last week of an easing on travel restrictions for vaccinated international visitors was met with optimism on the Strip. The White House said the new policy covers both air and land-border travelers, who will need to be fully vaccinated and show proof of vaccination.

A nearly empty baggage claim area at McCarran International Airport on Friday, May 15, 2020. (Jeff Scheid/The Nevada Independent)

Before the pandemic, McCarran International Airport had direct flights to and from 11 different countries. Through August, international airline passenger volume is down 87.2 percent compared to 2019, when McCarran saw more than 3.8 million international travelers, an average of more than 316,000 passengers per month.

Analysts have pointed to the lack of direct international visitors into Las Vegas as a missing component in visitation and gaming numbers. Through August, the only direct international flights to and from Las Vegas originated in Canada and Mexico.

The change in policy was saluted by American Gaming Association CEO Bill Miller. 

“Kudos to the Biden administration for setting a concrete date for reopening international travel,” Miller wrote on Twitter. “Come Nov. 8, the American gaming industry is excited to welcome international guests once again.”

Indy Gaming: Casino operators and investors concerned about Macau plans for gaming license overhaul

Good morning, and welcome to the Indy Gaming newsletter, a weekly look at gaming matters nationally and internationally and how they tie back to Nevada.

If a colleague or associate emailed this newsletter to you, please click here to sign up and receive your own copy of Indy Gaming in your inbox. — Howard Stutz


Macau casino operators finally got an answer to their question on the Special Administrative Region’s plans for the gaming license renewal process. 

The response caused a wipeout of more than $18 billion in stock market value by investors during a single trading session after analysts downgraded their view of the Macau market, according to Bloomberg News.

Las Vegas Sands, Wynn Resorts and MGM Resorts International have waited more than a year for the Macau government to explain the extension process for all six Macau casino licenses—the three concessions and the three sub-concessions— which expire in June 2022.

Stakeholders weren’t expecting government oversight to tighten, but Macau Secretary for Economy and Finance Lei Wai Nong last week announced a 45-day regulatory overhaul that did not exactly receive positive reviews.

Jefferies gaming analyst David Katz said the release “raised more questions than answers.”

J.P. Morgan gaming analyst Joe Greff lowered his firm’s ratings on Macau casino operators following what he called the “uncertainty and opacity” of the policy. Greff said Macau is encouraging – “sort of requiring” – casino operators to spend more on non-gaming projects, both in Macau and on neighboring Hengqin Island as a consideration for a license renewal.

J.P. Morgan gaming analyst Joe Greff

At the same time, the government hasn’t provided guarantees the licenses will be renewed.

“Operators didn’t have much clarity on timing regarding concession renewals, though this does not seem like a big concern,'' Greff said.

However, the government indicated a “potentially negative” policy change, pointing toward “incrementally heightened scrutiny” on casino operators’ capital management and daily operations.

“We think this adds in renewal risk and uncertainty to Macau, whose fundamentals already have been murky and incrementally difficult to analyze,” Greff said.

The top executives for Nevada-based Macau casino operators spent much of last week assuring analysts and investors they could work with whatever the government finally decides.

For Las Vegas Sands, unlike Wynn and MGM Resorts, Macau has a much higher importance to the company, which will soon be Asian-facing with six casinos in Macau and the Marina Bay Sands in Singapore. Its $6.25 billion sale of the Venetian, Palazzo and Sands Expo and Conference Center on the Strip closes later this year.

In March, Sands Chairman and CEO Rob Goldstein said the company had invested $15 billion in Macau since the early 2000s.

Macau’s casino industry – once considered the world’s largest in terms of revenue production – has been on a downward trajectory since 2013, primarily due to economic troubles in China and operating and travel restrictions brought on by COVID-19 since the start of 2020.

Macau casinos last year produced $7.56 billion in gaming revenue, a decline of 79.3 percent from pre-pandemic 2019 when casinos collected $36.6 billion from gamblers. Macau’s record year for gaming revenue was $45 billion in 2013.

Last year was the first time the region collected less than $10 billion in gaming revenue since 2006, four years after the government ended the gaming monopoly in the former Portuguese colony and opened the market to U.S. based casino operators.

Macau’s total gaming revenue is down 69 percent through the first eight months of 2021, compared to 2019.

Greff focused his concern on two sections of the secretary’s announcement. One area seeks stricter control on capital, recommending license holders could only distribute profits to shareholders after getting pre-approval from the government.

“While it’s unclear how strictly the government would control their capital, we believe the hefty dividends of pre-COVID-19 days, especially those from Las Vegas Sands and Wynn, would likely get scrutinized if not restricted,” Greff said.

Also, Macau government plans to introduce a government representative for each license holder, in order to directly “monitor and control day-to-day operations and protect the interest of society.” Greff suggested this rule could potentially be at the expense of the casino operators’ own interests.

“Our concern is that this could still weigh on valuation multiples,” Greff said.

He wasn’t the only analyst expressing worries about the Macau situation.

Macquarie Securities gaming analyst Chad Beynon said Las Vegas Sands, Wynn and MGM Resorts were hurt financially by the U.S.-China trade war that developed over the last several years under former President Donald Trump.

“As we move forward, we still believe the group of concessionaires will maintain their position in the market,” Beynon said in a research note. “This could happen through slightly different ownership structures, higher commitment/investment rates, or some sort of combination. We don’t expect the most draconian situation to occur.”


Gaming Hall of Fame: Jeffrey Silver cleaned up the industry; Mark Yoseloff advanced technology

Jeffrey Silver of Dickinson Wright

Jeffrey Silver had yet to celebrate his 30th birthday when Gov. Mike O’Callaghan appointed him to the Nevada Gaming Control Board in 1975.

That didn’t stop him from coming face-to-face with legendary organized crime figures that federal law enforcement hoped to weed out of the Strip’s casino business.

Silver, who grew up in Las Vegas and only left to attend college and law school, was a criminal prosecutor in the Clark County district attorney’s office when he decided against seeking a job in private practice to apply for an open position on the three-person Control Board that oversees the agency tasked with regulating Nevada’s gaming industry.

Silver’s investigation and questioning of Frank “Lefty” Rosenthal eventually led to the Control Board voting to deny a gaming license for the reputed mob associate to operate the Stardust on the Strip.

Legal battles stretched the case for more than three years before the now classic confrontation at a Nevada Gaming Commission hearing between Rosenthal and Commission Chairman Harry Reid. The scene was played out in the film, “Casino.”

Silver learned how deeply the mob disliked him when FBI agents allowed him to read a nine-page transcript of a wiretapped conversation between two hitmen.

“The guys were talking about the ‘asshole’ who worked at the (Control Board) and they should kill this ‘Silverstein’ guy,” Silver recalled. “I was getting all puckered up until I got to the last page where they said they couldn’t do it because it would create too much heat. The FBI guys had a good laugh.”

His nearly four years at the Control Board helped plant the foundation for corporate investment into gaming, which began in earnest in the 1980s.

Silver, 75, who is of counsel for the Dickinson Wright law firm’s gaming and administrative law practice in Las Vegas, is one six individuals who will be inducted into the American Gaming Association’s Gaming Hall of Fame during a reception on Oct. 4 at the Global Gaming Expo.

His 50-year legal career touched all facets of the gaming industry, including regulatory oversight, casino operations and legal representation. Silver and a partner managed their own law practice for 29 years before the firm split up and he joined Dickinson Wright in 2015.

Silver recalled the days when Nevada was so small that he simply sent a letter and his resume to O’Callaghan inquiring about the open control board position. About seven days later, he received a phone call from the governor, who said gaming agents would conduct a background check on him. A week later, O’Callaghan called back and told Silver the job was his — but with one condition.

“He said I needed to come up and meet him since we had never met,” said Silver, who flew to Northern Nevada the following Saturday and was picked up at the airport by then-Control Board member John Stratton, “although I didn’t know who he was at the time.”

The Los Angeles Times article on the first Burger King in a Strip casino.

Silver’s three-and-a-half years at the Control Board led to an appointment as chief operating officer and general counsel for the Landmark Hotel-Casino in Las Vegas after the property went into bankruptcy. He also spent a year as CEO of the Riviera when the Strip property was also in bankruptcy. Silver managed the Strip resort for owner Meshulam Riklis.

In both instances, Silver was able to turn around the properties’ finances by cutting costs and instituting a more stable management structure.

He is still recognized for his most “notable” management decision at the Riviera: He contracted with Burger King to bring the fast-food restaurant chain to the casino. Silver said he got the idea after seeing the lines of tourists crowd into a McDonald’s across the Strip from the Riviera.

That move led to a national story in the Los Angeles Times, calling Silver the “Burger King of Las Vegas.” Silver said the restaurant “was successful. I showed everyone that a former regulator knows how to run a casino.”

Silver, along with Gaming Laboratories International CEO James Maida and former Shuffle Master Chairman and CEO Mark Yoseloff, who is the founder of the UNLV Center for Gaming Innovation, represent the Hall of Fame’s Class of 2020. Because of the cancelation of last year's G2E because of COVID-19, the Hall of Fame selection for 2020 was put off until this year.

Delaware North Chairman Jeremy Jacobs, IGT Vice President of Global Business Development and Tribal Ambassador Knute Knudson, Jr., and Seminole Tribe of Florida General Counsel Jim Shore represent the Class of 2021.

Shuffling into game design

Mark Yoseloff inside the Konami Gaming Laboratory in 2013. / UNLV Photo Services / R. Marsh Starks

Yoseloff spent 12 years growing Shuffle Master from beyond table game management systems into a table game development company (Shuffle Master is now part of Scientific Games).

But retirement didn’t sit well for a person with a Ph.D. in mathematics, especially after hearing then-Gov. Brian Sandoval announce during a State of the State address that Nevada needed to embrace innovation.

That sparked Yoseloff to approach UNLV about creating a gaming laboratory to boost innovation in the casino industry. Utilizing a grant from Sandoval’s Office for Economic Development in 2013, Yoseloff launched UNLV’s Center for Gaming Innovation as a place for students to learn and fuel game development. The program is housed within the school’s International Gaming Institute.

“My desire was to see this center become as important for gaming and games as Stanford University is for computer sciences,” Yoseloff said. “There is even more going on today with the program than ever.”

The center has been showcased by national media outlets, which has highlighted UNLV as a center for gaming innovation.

The proof is the results. The center has filed 40 patent applications on behalf of student-designed games. Of those applications, 20 have resulted in issued patents and 18 gaming products designed by UNLV students have been commercialized and are being used in casinos.

Yoseloff said 12 former UNLV students hold innovation or game design positions with gaming companies while three student-run start-up companies are operating. The patented products “have generated or are projected to generate” more than $500,000. UNLV provides financial and technical support for the development of the games. Under an agreement, the school receives 20 percent of revenues with the bulk going to the students.

Yoseloff said he is “most proud and the most satisfied” by the work he has overseen at the center than anything he’s accomplished in his career, which included several game design and start-up operations that were to gaming industry companies.

“The center continues to grow and flourish and that’s important for the industry,” he said.


Other items of interest:

A woman walks into the baggage claim area at McCarran International Airport on May 15, 2020. (Jeff Scheid/The Nevada Independent)

The announcement Monday that airline travel restrictions will be eased in November for international visitors who are vaccinated against COVID-19 could be good news for Strip resorts. The White House said the new rules would cover the United Kingdom and the European Union. Travel industry leaders hope the changes will increase bookings around the late fall and winter holidays. The international terminal at McCarran International Airport has been all but dormant since the pandemic began 17 months ago. International travel to and from Las Vegas declined 79.5 percent in 2020, with just 781,280 international travelers passing through the airport, down from 2019’s 3.8 million. In 2019, McCarran had nonstop service to and from 11 different countries, including the United Kingdom, France, Germany, South Korea, China and Israel. In July, McCarran recorded just 64,425 international passengers with direct flights from two countries, Mexico and Canada.

AGA CEO Bill Miller. (Photo courtesy AGA)

American Gaming Association CEO Bill Miller doesn’t expect next month’s Global Gaming Expo to reach the 27,000-person attendance figures the show saw in 2018 and 2019. However, he believes the gaming industry's largest tradeshow and conference will have a more engaged, albeit smaller audience. Last year’s G2E was canceled amid the COVID-19 pandemic but sessions were held virtually. Miller said the Oct. 4-7 event at the Sands Expo and Convention Center will be the first time in two years casino industry decision makers and gaming equipment suppliers are meeting in mass. “G2E has always been about the new products, machines and technology and the hands-on comparisons. You can’t do that on a Zoom call,” Miller said. “I’m bullish on where we are today,” he said in reference to pre-registration numbers. “I think a smaller G2E is more effective in some ways.”

Note:  Miller and MGM Resorts International CEO Bill Hornbuckle are participating in a panel discussion on the future of online gaming at IndyFest 2021, our two-day virtual conference on Oct. 2-3. For more information and tickets, follow this link.

Connie James, Scientific Games

Gaming equipment provider Scientific Games named Connie James as chief financial officer last week. She is currently CFO of the Las Vegas-based company’s gaming division. The move comes as Scientific Games looks to sell its legacy lottery business and sports betting operation the company spent billions of dollars to develop. Prior to appointing James, Scientific Games released financial projections for the lottery business, projecting annual growth of nearly 14 percent by 2022, well above analyst predictions of nearly 9 percent. James, who joined Scientific Games in January 2020, replaces Mike Eklund who resigned to “pursue other opportunities, James has nearly 20 years of gaming experience in financial and operational roles, including 10 years with Australia-based Aristocrat’s U.S. division. “Connie has helped lead the Gaming business through the unprecedented disruptions caused by COVID-19 and played a critical role in our strategic review,” CEO Barry Cottle said in a statement.

BetMGM promoted a pair of wagers placed last week by billionaire businessman Jared Isaacman as the first sports bets from outer space. Sort of. Isaacman, CEO of payment processor Shift4 Payments, was commanding SpaceX's Inspiration4 three-day mission and was 359 miles above the earth when he tapped in the bets on a keypad from the space capsule – $4,000 on the over in last Thursday’s New York Giants-Washington Football Team game (a winner) and $4,000 on the Philadelphia Eagles winning the 2022 Super Bowl (outcome to be determined). But it was all for show. At the same time Isaacman “placed the bets,” sports business and gaming reporter Darren Rovell of The Action Network was at the MGM Grand Las Vegas sportsbook to place the wagers as a “proxy.” Even if the SpaceX capsule was directly above Nevada at the time of the wagers, geolocation would have registered the device as outside the state’s boundaries. The stunt will at least benefit a good cause. All winnings from the bets will be donated to the St. Jude Children’s Research Hospital in Memphis, Tennessee. BetMGM will donate an additional $25,000 to the medical facility.

Rendering of the $500 million Caesars Danville in Virginia

Caesars Entertainment made news last week in two states outside Nevada. The Las Vegas-based company released renderings for its planned $500 million casino resort in Danville, Virginia. The 500-room property was one of four casinos approved by voters in four Virginia cities last year. Danville is located in southern Virginia near the border with North Carolina, and the casino is expected to draw visitors from the Raleigh-Durham and Greensboro communities. Caesars Danville will include 500 hotel rooms, restaurants, entertainment offerings and a casino with 1,400-slot machines and table games, a poker room featuring the company’s World Series of Poker brand and a Caesars Sportsbook. Caesars hopes to break ground on the property in December. Meanwhile, Caesars Sportsbook announced the first sports betting and sponsorship agreement between a gaming company and a university in the Southeastern Conference (SEC). The multi-year deal with Louisiana State University (LSU) includes naming rights to a club at the Baton Rouge university’s stadium and branding throughout the school’s athletic facilities. Caesars, which has already rebranded the Superdome in New Orleans with the Caesars name, expects to launch sports betting in Louisiana when the state goes live this year.

A rendering of the entrance to Chickie's and Pete's at the Sahara.

A Philadelphia sports bar that has been lauded over the years by ESPN will make its Las Vegas debut next month. Chickie’s & Pete’s Crab House and Sports Bar will open its first West Coast location at the Sahara on Oct. 6 with an 8,200 square-foot venue attached to the casino’s sportsbook. The facility will include an outdoor patio overlooking the Strip and more than 50 televisions across the bar and dining areas. Three VIP gaming pods will include two televisions, oversized sectional sofas, video game consoles and a buffet table. Founded in 1977 by Pete and Henrietta “Chickie” Ciarrocchi, the owners added a location at Tropicana Atlantic City a few years ago and Las Vegas has been hinted at since 2018. The restaurant is famous for its “Crabfries,” crinkle-cut French fries sprinkled with a blend of crab spices and served with the restaurant’s white creamy cheese sauce for dipping. 

Indy Gaming: Companies still finding the public markets a willing source to fund new debt

Good morning, and welcome to the Indy Gaming newsletter, a weekly look at gaming matters nationally and internationally and how they tie back to Nevada.

If a colleague or associate emailed this newsletter to you, please click here to sign up and receive your own copy of Indy Gaming in your inbox. — Howard Stutz


Macau’s slumping gaming market didn’t stop Las Vegas Sands from floating more than $1.93 billion in new debt through its Hong Kong-based subsidiary that operates the company’s holdings in the region.

But they weren’t alone in tapping into the investment community last week.

Real estate investment trust VICI Properties (which announced plans to acquire rival MGM Growth Properties last month) issued 115 million shares of stock priced at $29.50 on the New York Stock Exchange, raising more than $3.39 billion. And Caesars Entertainment said it was raising $1.2 billion in new debt.

The three companies have different reasons for shaking up their balance sheets, such as paying down debt or funding expansion efforts.

Caesars, for example, launched Caesars Sportsbook last month through a national advertising campaign. The company plans to spend more than $1 billion to grow its sports betting and online gaming business and acquire new customers.

Ahead of the debt raise, Caesars said in a Securities and Exchange Commission filing that its revenues for the first two months of the third quarter (July and August) were between $1.8 billion and $1.85 billion. The company’s Las Vegas resorts accounted for 37 percent of that total.

“We continue to see Caesars as well-positioned for a leisure-based Strip recovery,” Truist Securities gaming analyst Barry Jonas wrote in a Sept. 9 research note. He added that Caesars’ regional gaming presence in 16 states could protect the company from any “reasonable COVID-19 resurgence.”

Caesars announced its debt raise two days after agreeing to sell the non-U.S. operations of United Kingdom gaming operator William Hill for $3.04 billion to Gibraltar-based online gaming giant 888 Holdings. The casino operator plans to use nearly $2 billion from the sale to pay down debt, resulting in net proceeds of $1.2 billion. Caesars had $14.7 billion in debt at the end of June.

Sands focusing on Asia

Las Vegas Sands is waiting on regulatory approval for the company’s previously announced $6.25 billion sale of its Las Vegas Strip holdings to a combination of VICI and Apollo Global Management.

The debt offering on behalf of Sands China is expected to close Sept. 23, and the company plans to use the proceeds and cash on hand to redeem $1.8 billion in debt that comes due in 2023. The newly acquired debt has a range of maturity dates – $700 million due in 2027, $650 million due in 2029 and $600 million due in 2031. At the end of June, Las Vegas Sands had total debt of $14.42 billion.

Similar to Caesars, Sands provided investors some insight into its Macau operations during July and August in an SEC filing. Its Macau resorts lost $108 million during the two months, which the company blamed on tighter border restrictions that slowed visitation between the Special Administrative Region and mainland China’s Guangdong Province, a key feeder market to Macau’s casinos.

Macau’s total gaming revenue is down 69 percent through the first eight months of 2021, compared to 2019. Analysts said COVID-19 outbreaks across mainland China caused the downturn. As a whole, Macau casinos produced just $554 million in gaming revenue during August, the market’s lowest single-month total since September 2020.

“Admittedly, it’s tough to be near-term bullish on the Macau sub-sector,” JP Morgan gaming analyst Joe Greff told investors in a Sept. 8 research note.

After the sale of the Venetian, Palazzo and Sands Expo and Conference Center, Las Vegas Sands won’t have any holdings in Las Vegas and will be an Asian facing company with six casinos in Macau and the Marina Bay Sands in Singapore.

“Investors who are patient should like (Las Vegas Sands’) laggard profile, both in the share price and fundamental recovery,” Greff wrote in his research note. “The key issue for both Macau and Singapore is travel mobility, which is going to be directly tied to infection and vaccination rates and ensuing travel policies changes, all of which are tough to predict.”

Las Vegas Sands has opened the first phase of The Londoner Macau, which is a $2.2 billion renovation of the Sands Cotai Central complex. The company is also spending $3.3 billion at the Marina Bay Sands to add an all-suite hotel tower, additional convention and meeting space and other non-gaming amenities.

In the SEC filing, Las Vegas Sands noted it had more than $2.56 billion on its balance sheet — $556 million in cash and $2 billion of borrowing availability.

“We view this liquidity position as more than ample to ride out a tough short-term travel impacted period,” Greff said.

Pedestrians walk towards the Palazzo with the under-construction MSG Sphere in the background on Sunday, May 30, 2021. (Jeff Scheid/The Nevada Independent)

VICI buying up the Strip

VICI said it plans to use the proceeds from the stock sale to help fund its part of the Las Vegas Sands purchase. The REIT also is paying $4 billion to acquire 63 acres along the Strip and the 19 acres that house the under-construction $1.8 billion MSG Sphere project. Apollo is paying $1.25 billion to acquire the Venetian Operating Company.

VICI’s $17.2 billion acquisition of MGM Growth includes ownership of the land housing nine gaming and non-gaming properties operated by MGM Resorts International.

Macquarie Securities gaming analyst Jordan Bender told investors in a Sept. 10 research note that the market is unconcerned about any additional debt VICI will have to add to its balance sheet. At the end of June, VICI had total debt of $6.9 billion.

“Management continues to prove its ability to grow the business in an accretive manner while growing revenues,” Bender said. VICI is predicting its current deals, which are expected to close in 2022, will give the company expected annual revenues of $2.8 billion. In 2019, VICI’s total revenues were $900 million.

“We expect (VICI’s) dividend to grow by roughly 30 percent over the same period,” Bender said.

Deutsche Bank gaming analyst Carlo Santarelli, in a research note Monday, said VICI is “underappreciated” relative to other REITs. However, following the acquisition of Sands and MGM Growth, Greff suggested VICI will be among the largest REITs in terms of annual cash flow in the RMZ, a market capitalization index.

“(It’s size) will put the company on additional radars and drive incremental value for existing shareholders,” Santarelli said.

Viva Las Vegas? Seminole Gaming CEO taking part in G2E keynote panel

Seminole Gaming CEO/Hard Rock International Chairman Jim Allen in front of the Guitar Hotel at the Hard Rock Hollywood in Florida. (Courtesy photo)

The appearance of Seminole Gaming CEO Jim Allen on a Global Gaming Expo keynote panel next month could touch off questions about potential Las Vegas expansion plans for the Florida tribal gaming operation.

Allen, who is also chairman of Hard Rock International, is speaking alongside Wynn Resorts CEO Matt Maddox and MGM Resorts International CEO Bill Hornbuckle during G2E on Oct. 6 at the Sands Expo and Convention Center. CNBC anchor Contessa Brewer will moderate the discussion.

The session is billed as a conversation about the ever-evolving commercial and tribal gaming landscape. In that vein, the talk could cover the recent tribal gaming push into Las Vegas.

The Seminole Tribe has owned Hard Rock International since 2007 and has grown the brand into a worldwide gaming, hospitality, dining and entertainment presence. Hard Rock currently has 14 casino properties in the U.S., Canada and Punta Cana in the Dominican Republic.

The tribe lent the Hard Rock name and brand to an off-Strip property that went through several management changes over the course of more than two decades. The property has since been rebranded as Virgin Hotels Las Vegas.

Speculation about a new Hard Rock Las Vegas arose in March 2020 when Hard Rock announced it had acquired the rights to the name Hard Rock Hotel Casino Las Vegas, along with the former property’s music memorabilia, signage and merchandise, intellectual property rights for affiliated restaurant and entertainment trademarks, and website domain names.

Allen, who has spent more than 20 years with Seminole Gaming, said in a February interview it was important to the company to control the brand but offered no hints of a Las Vegas landing site.

“We’re not involved in any transaction at this point,” he said.

After that interview, Connecticut-based Mohegan Gaming & Entertainment – the business arm of the Mohegan Indian Tribe – began operating the 60,000-square-foot casino space inside Virgin Hotels Las Vegas, becoming the first tribal gaming enterprise licensed by Nevada gaming regulators to operate a casino within the Strip corridor.

In May, Southern California’s San Manuel Band of Mission Indians said it would acquire the off-Strip Palms Casino Resort for $650 million from Red Rock Resorts. The transaction is expected to close by the end of the year pending regulatory approval.

Seminole Gaming operates six of the state’s seven tribal casino properties, including Hard Rock Tampa and Hard Rock Hollywood near Fort Lauderdale. In 2019, Hard Rock opened the $1.15 billion Guitar Hotel expansion at the Hollywood resort. The 638-room tower is shaped like the body of a guitar.

Other items of interest

Stanley Mallin, AGA Hall of Fame member. (Photo Courtesy AGA)

Stanley Mallin, the long-time business partner of Las Vegas casino personality Jay Sarno, died Saturday in Las Vegas at age 98. Mallin, who was inducted into the American Gaming Association's Gaming Hall of Fame in 2019, was an essential executive in the opening of two Strip resorts conceived by Sarno: Caesars Palace in 1966 and Circus Circus in 2008. The bombastic and larger-than-life Sarno was the face of the Strip developments while Mallin was the quiet behind-the-scenes operator who managed the properties in the 1960s and 1970s. Sarno was part of the Gaming Hall of Fame’s inaugural class in 1989, but it took 30 years to enshrine Mallin. Oliver Lovat, CEO of gaming industry advisor Denstone, said Mallin was “the last of the great Las Vegas pioneers.” On the Strip, Mallin is still memorialized. Stan Mallin Drive runs parallel to Jay Sarno Way, with both connecting from Frank Sinatra Drive into the back end of Caesars Palace.

Gaming equipment provider International Game Technology has moved its online gaming and sports betting businesses into a newly formed Digital & Betting operating segment. The two businesses were originally part of the company’s Global Gaming division. The move gives IGT three business sectors: Global Lottery, Global Gaming and Digital & Betting. IGT is headquartered in London but has significant production, sales and marketing divisions in Nevada. IGT CEO Marco Sala said Enrico Drago will serve as CEO of the Digital & Betting division. Drago, 44, previously had oversight of IGT’s online gaming, online lottery and sports betting operations. "These businesses have become strategically important to IGT as they afford us the opportunity to leverage the global reach and strong customer relationships of our Global Gaming segment,” Sala said. “The new structure gives us more flexibility in our product and solutions portfolio.”

Trey Wingo and JB Smoove. (Photo Courtesy Caesars Sportsbook)

Former ESPN anchor Trey Wingo made his first appearance last week as the chief trends officer and brand ambassador for Caesars Sportsbook. The sports betting arm of Las Vegas-based Caesars Entertainment launched operations in Arizona earlier this month. Wingo, who left ESPN in 2020 after 23 years with the network, was at Chase Field in Phoenix with Caesars officials, Arizona Diamondbacks representatives, Arizona Gov. Doug Ducey and actor J.B. Smoove, who stars as “Caesar” in the company’s nationwide advertising campaign. Wingo, who hosted NFL Live and for the NFL Draft for the network, will create original sports betting content and analysis for Caesars that will be broadcast across the company’s media channels. Wingo is among a growing roster of former athletes, media personalities, and celebrities who are now “brand ambassadors” for sportsbook operators who oversee the activity that is now legal and operating in 26 states and Washington D.C. “I want to tell the stories behind the odds,” Wingo said.

Caesars Sportsbook did have one hiccup on Sunday. According to the Las Vegas Review-Journal, an outage halted mobile sports wagering in Nevada just before kick-off for the 10 a.m. NFL games. On Sunday afternoon, once power to the apps was restored, Caesars gave two free $25 wagers to its customers and apologized for the inconvenience via email.

BetMGM has come up with a new solution for customers to fund their sports wagering accounts: gift cards. BetMGM, a 50-50 partnership between MGM Resorts International and Entain Plc, said a partnership with payments firm TAPPP will allow gift cards in $25 and $50 denominations to be sold at major convenience and grocery retail chains in states that offer legal sports betting. Currently, the cards are sold in 6,000 locations in eight states. "One of the biggest pieces of feedback we get from our customers is that they want a simple and convenient way to fund their accounts," BetMGM Head of Payments Maria Tomlinson said in a statement. The gift cards help avoid deposit failures, she said.

MGM Resorts still the Strip’s largest casino operator, just not its biggest landowner

The MGM Grand hotel and casino sign

Nearly a decade ago, MGM Resorts International owned much of the Las Vegas Strip.

The company controlled more than 800 acres along the resort corridor, much of which housed 10 Strip resorts, the 67-acre CityCenter complex, a 33-acre concert venue and 23 acres that became The Park dining and retail space and T-Mobile Arena.

“It’s a good time to be the largest landowner on the Strip,” then MGM Chairman and CEO Jim Murren said during a quarterly earnings conference call in 2014. He was responding to news that vacant land across from Wynn Las Vegas, formerly the site of the New Frontier, had sold for between $9 million and $15 million an acre.

Murren told investors that whatever the value ascribed to Strip real estate was a figure that “we like a lot.”

Starting in 2016, the company changed its strategy.

When a pair of recently announced transactions involving CityCenter and totaling more than $6 billion are finalized later this year, MGM Resorts’ land ownership on the Strip will cover just 15 acres. Outdoor festival grounds across from Luxor and Mandalay Bay – the location of the Oct. 1, 2017, mass shooting – is the last piece of the company’s Strip real estate puzzle. Much of that site is slated to be used for parking for nearby Allegiant Stadium.

“We expect to continue executing on our asset-light strategy and utilizing the proceeds from our real estate transactions to enhance our financial flexibility and secure new growth opportunities,” MGM Resorts CEO Bill Hornbuckle said on July 1.

Analysts believe MGM Resorts, which owns a 50 percent stake in BetMGM, the company’s sports betting and online gaming operation, wants to acquire the other half through a purchase of United Kingdom betting giant Entain PLC. MGM made an $11 billion buyout offer for the company in January, but the bid was rejected for “undervaluing the company.”

Under UK law, MGM was precluded from making another offer for six months.

“We believe MGM is still interested in owning the BetMGM business outright given its long-term aspirations in the space,” said Macquarie Securities gaming analyst Chad Beynon, noting the cooling off period ended this month.

Beynon said the company’s land transactions have provided some $8 billion in cash toward the balance sheet, “which could make an acquisition more palatable.”

Also, technology giant IAC/InterActiveCorp, which spent more than $1 billion last summer to acquire a 12 percent stake in MGM Resorts, making it the company’s largest shareholder, was expected to fund a portion of January's proposed Entain deal through a further investment in MGM.

IAC is controlled by media mogul Barry Diller, who joined the MGM board last summer. He said at the time MGM Resort’s potential from its online gaming business drove his investment thesis.

In a presentation to investors in April, BetMGM CEO Adam Greenblatt predicted the company – operating in 10 states and Washington D.C. – will double its jurisdictions by the end of 2022 and produce more than $1 billion in net revenues.

MGM Resorts may discuss continued interest in Entain and expanding BetMGM when the company releases its second-quarter earnings on Aug. 4.

Exterior of the Vdara Hotel and Aria Casino Resort at CityCenter. (File photo)

REITs on the Strip

MGM Resorts began reducing its Strip real estate with the 2016 spin-off of MGM Growth Properties as a publicly traded real estate investment trust. Subsequent deals in the past two years with Blackstone Real Estate Investment Trust converted MGM Resorts from the Strip’s largest landowner to a company operating nine resorts on behalf of the two REITs.

MGM Growth owns all or a portion of seven MGM-operated Strip resorts – MGM Grand Las Vegas, Mandalay Bay, The Mirage, Park MGM, Luxor, Excalibur and New York-New York. MGM Growth also owns The Park and T-Mobile Arena, as well as the casino company’s seven regional casinos.

MGM Resorts controlled 73 percent of MGM Growth following the REIT’s initial public offering. The stake has been reduced over the last five years. In March, the stake fell to 42 percent after the casino company redeemed $1.2 billion in ownership shares.

MGM Resorts is not the only Strip casino operator selling properties to REITs. Las Vegas Sands announced a $6.25 billion sale in March of the Venetian, Palazzo and Sands Expo to VICI Properties, which is paying $4 billion for the real estate and buildings. Apollo Global Management is paying $2.25 billion for control of the operations.

New York-based VICI Properties, which spun off from Caesars Entertainment in 2017 as part of the company’s bankruptcy reorganization, owns the land and buildings associated with Caesars Palace, Harrah’s Las Vegas, and the Caesars Forum Convention Center. In Las Vegas, VICI also has the right of first refusal should Caesars Entertainment sell Flamingo Las Vegas, Linq Hotel, Bally’s Las Vegas, Paris Las Vegas, and Planet Hollywood. Also, VICI owns 27 acres of undeveloped land behind Bally’s, Paris, and Planet Hollywood.

Outside of Las Vegas, VICI has leases with five different operating companies for casinos in 11 states.

“We believe (VICI) is a name that will continue to prove its ability to grow with its existing tenant base and acquire new tenants in both the gaming and non-gaming space,” said Macquarie Securities gaming analyst Jordan Bender. 

Pennsylvania-based REIT Gaming and Leisure Properties, created in 2013 through a spin-off with regional casino operator Penn National Gaming, owns one property on the Strip – Tropicana Las Vegas – which is managed by Penn. Gaming and Leisure is in the process of leasing the operations to Bally’s Corp. in a deal announced in April.

By law, REITs don’t pay federal income taxes. With real estate as their primary source of income, REITs are required to distribute at least 90 percent of their taxable earnings to shareholders. Investors are taxed at their individual tax rate for the ordinary income portion of the dividend.

A couple sits in front of the Bellagio fountains with a sign reading "Thank you for practicing social distancing" on Thursday, June 4, 2020. (Mikayla Whitmore/The Nevada Independent)

MGM Resorts’ REIT deals

CityCenter is the last of MGM Resorts’ Strip properties to fall under REIT ownership.

MGM Resorts said on July 1 it was paying $2.125 billion to buy a 50 percent stake owned by Infinity World, the investment arm of the United Arab Emirates and the company’s longtime partner in CityCenter.

Subsequently, the company said it would sell the underlying real estate to Blackstone Real Estate Investment Trust for $3.89 billion. MGM Resorts will then lease the operations back from the landowner.

CityCenter holdings include the 4,000-room Aria Resort and Casino and the non-gaming 1,200-room Vdara Hotel. Other developments on the site, including Crystals luxury retail center, an empty two-acre parcel and the non-gaming Waldorf Astoria were previously sold to new owners.

Aria and Vdara will be leased to MGM Resorts for annual rent of $215 million.

“Uniting all of CityCenter under MGM Resorts' corporate structure and strategy will allow us to consolidate financial results, build on efforts to strengthen our operating model and guest experience and further our vision of becoming the world's premier gaming entertainment company,” Hornbuckle said in a statement announcing the transactions.

Beynon said the CityCenter deal transformed MGM into “a 100 percent operating company.”

Deutsche Bank gaming analyst Carlo Santarelli added, “We think the fact that the transaction furthers MGM's cash position, while also further simplifying the organizational structure of the company, are firm positives.”

Santarelli said MGM Resorts will earn $1.8 billion in cash following the two transactions. He suggested the funds could be used to reduce the company’s long-term debt, which stood at $13.4 billion at the end of March. Separately, the CityCenter’s debt was $1.73 billion at the end of March.

Deals in 2019 and 2020 furthered the company’s transformation. MGM Resorts sold Bellagio to Blackstone for $4.25 billion. MGM is paying the REIT $245 million in annual rent, but the casino operator retained a 5 percent ownership in the resort.

A few months later, the company sold MGM Grand Las Vegas and Mandalay Bay to a joint venture between Blackstone and MGM Growth for $4.6 billion. MGM Resorts pays $292 million annually to lease back the casinos.

Also in 2019, MGM Resorts sold Circus Circus Las Vegas and its 25-acre site, along with three adjacent parcels totaling 78 acres, to Treasure Island owner Phil Ruffin for $825 million.

MGM’s sale-leasebacks have a positive implication for the market, said J.P. Morgan gaming analyst Joe Greff. There continue to be buyers for Las Vegas Strip resorts.

“We think this bodes well for other operators who are looking to monetize Strip assets,” Greff said. He alluded to Caesars, whose management team has said the company wants to sell one or two of its eight Strip properties.

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Indy Gaming: The Great White North provides the next frontier for Nevada sports betting operators

The famous MGM lion

Good morning, and welcome to the Indy Gaming newsletter, a weekly look at gaming matters nationally and internationally and how the events tie back to Nevada.

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I’m always interested in tips from readers and subjects you would like me to cover. Let me know what you’re seeing in Nevada casinos and gaming markets around the country. Email me at howard@thenvindy.com


BetMGM – the sports wagering arm of MGM Resorts International – announced a multi-year agreement in early June to bring Wayne Gretzky, the National Hockey League’s all-time leading scorer and four-time Stanley Cup champion, aboard as a brand ambassador. 

A few weeks later, Canada’s parliament approved legislation allowing provinces and territories to legalize and regulate single-game sports wagering.

Right away, BetMGM capitalized on its new partnership. Gretzky sent a video message to Canadian sports fans through BetMGM’s Twitter account.

“It’s official. Sports betting is coming to Canada. Get ready,” Gretzky said.

For BetMGM, considered one of the four leading sports betting providers in the U.S., the much-beloved hockey superstar – and native Canadian – is thought to give the company an edge in appealing to the potentially lucrative sports betting market. Some operators value Canada at between $4 billion to $5 billion in annual wagers. As a comparison, U.S. sportsbooks took in $21 billion in wagers last year.

“As we look toward potential expansion into Canada, and elsewhere throughout the United States, Wayne (Gretzky) will bring a unique ability to tell our brand story,” said BetMGM Chief Revenue Officer Matt Prevost.

It’s unclear, however, if backing from “The Great One” will help BetMGM put the puck in the back of the net.

Caesars Entertainment spent $3.7 billion in April to acquire United Kingdom sports betting giant William Hill and its U.S. operations. The company figures to be a factor through the operations of Caesars Windsor Casino Resort in Ontario, which is just a nine-minute drive from downtown Detroit via the Detroit Windsor Tunnel.

WynnBet, the sports betting apparatus of Wynn Resorts, is going public through a merger with a blank check acquisition company controlled by Vegas Golden Knights owner Bill Foley. The deal gives the operation $640 million for investments into new markets, such as Canada.

There is also BallyBet, the newly created sports betting division of regional casino operator Bally’s Corp. The company owns Bally’s Lake Tahoe (formerly Montbleu Resort Casino) and is buying Tropicana Las Vegas. Bally’s has gained a nationwide presence through a licensing agreement that placed its name on Sinclair Broadcast Group’s chain of 19 regional sports television networks.

Nevada sports betting companies will compete in Canada with theScore, a Canadian-based sports betting operator. The two leading sportsbook companies in the U.S., FanDuel and DraftKings, which are currently not licensed in Nevada, also figure to be in the mix.

“We get the sense that there will be multiple operators, though the final tally is not clear and will vary by jurisdiction,” said J.P. Morgan gaming analyst Joe Greff. “We expect most U.S. operators will ramp up efforts to expand into the market, as will (the) hometown team, theScore.”

In the 38 months since the Supreme Court ruling that opened the U.S. to legal sports betting, 21 states and Washington D.C. have launched regulated sportsbooks. The activity has been legalized in another 10 states but it’s not yet operational.

Nevada’s sports betting industry, for decades the only state with legal sports wagering, has not suffered. In fact, sports betting has flourished.

In 2019, Nevada sportsbooks took in $5.319 billion in wagers, an all-time record for the 10th consecutive year.

The pandemic caused the first annual decline in sports wagering in more than a decade during 2020. However, according to the Gaming Control Board, the state is back on pace to set another record in 2021. In May, Nevada sportsbooks broke the month’s records for revenues and total wagers. In March, Nevada took in $640.7 million in sports bets – the third-highest single-month total of all time.

Last year, states with legal sports betting took in a combined $21 billion in sports wagers. This year portends to be another record-setter for the sports betting industry as 11 states have already surpassed $1 billion in total sports wagers through June.

Canada is viewed as a microcosm of the U.S.

Macquarie Securities gaming analyst Chad Beynon said Canada’s population, household income and sports culture that includes six NHL teams, one NBA team, one Major League Baseball team, and the Canadian Football League “makes the country an attractive market” for U.S. operators.

Analysts said Canada also has a high interest in the National Football League.

Truist Securities gaming analyst Barry Jonas said Ontario, which includes Toronto, could be the first province to launch sports betting this year. He said Canada’s largest city – more than 6.25 million people – “would make it comparable to being the fifth-largest U.S. state and potentially the largest North American sports betting market in the near term.”

Executives from theScore told analysts the country could see $5.4 billion annually bet on sports. DraftKings estimates the market for sports betting and iGaming in Canada could be worth up to $8 billion a year.

In a presentation to investors in April, BetMGM CEO Adam Greenblatt predicted the company – currently operating in 10 states and Washington D.C. – will double its jurisdictions by the end of 2022 and produce more than $1 billion in net revenues.

However, he didn’t offer guidance toward its potential Canadian market share.

“Risks around irrational spending in Ontario may be a more immediate concern given the competitive rush we expect upon launch,” Jonas said.

Other items of interest:

Everi Holdings, a Las Vegas-based gaming equipment and financial transactions services provider, pre-announced the company’s second-quarter earnings before July 4 as part of a balance sheet refinancing that includes a $125 million credit line and a $600 million loan. Everi’s quarterly revenue projections of $167 million to $172 million exceeded previous expectations. In a statement, Everi credited increased gaming equipment sales and higher-than-expected volume in cash access transaction services the company provides to casinos. “Ultimately, the upside was broad-based, but largely reflects elements of the business that should recur, which implies the earnings level should remain elevated,” said Jefferies gaming analyst David Katz.

U.S. Bookmaking, a Las Vegas-based sports betting operator overseen by Vic Salerno and Bob Kocienski, is being acquired by Elys Game Technology, a New York-based interactive gaming company, for $12 million. US Bookmaking, which will become a subsidiary of Elys, operates sportsbooks for tribal casinos in New Mexico, Colorado and Michigan, and has an agreement to expand to North Dakota. Salerno and Kocienski each have more than 40 years of experience in legal sports betting. Salerno became the first sportsbook operator elected to the American Gaming Association’s Gaming Hall of Fame in 2015.

Las Vegas-based Union Gaming Group, an investment bank and advisory firm, has been acquired by CBRE Group. Founded in 2008, the firm will merge with CBRE’s existing gaming investment team led by Michael Parks. The combined group will be headed by Bill Lerner, Union Gaming’s co-founder, who will serve as CBRE’s Global Head of Gaming Investment Banking. “We built Union Gaming on our singular commitment and belief in the long-term prospects for the gaming sector,” Lerner said. 

Resorts World Las Vegas isn’t the only gaming property bringing cashless gaming technology to table games. Morongo Casino near Palm Springs, California has partnered with two Las Vegas-based companies, gaming equipment provider AGS and payment technology company NexGen, to add 40 mobile chip devices at the property. The technology allows players to purchase gaming chips through NextGen’s “Fast Cash” system via their mobile devices. “We are confident that demand for Fast Cash will increase as casinos seek to add more cashless, contactless solutions,” said AGS Senior Vice President of Table Products John Hemberger.

Quotable:

“The activity on both Strip and locals casino floors, restaurants, and in common areas, despite the timing of our visit (Monday/Tuesday), was vibrant, and busier than expected given the time of week. Accordingly, and with a strong book of group business poised for the second half of 2021, continued strength in leisure bookings, and confidence in margin retention, the tone of our meetings with operators was upbeat, with few if any caveats of potential caution over the near term.”

— Deutsche Bank gaming analyst Carlo Santarelli, in a late June research note 

Nevada casinos’ take of $1.23 billion in May shatters nearly 14-year-old high

It seems there is something to the “pent-up demand” theory.

Nevada casinos collected a single-month record of $1.23 billion in gaming revenues during May, a stunning figure given that most casinos statewide were still operating under COVID-19 capacity restrictions that weren’t fully lifted until June 1.

The record figure, reported Wednesday by the Gaming Control Board, easily eclipsed the state’s previous single-month high of $1.165 billion recorded in October 2007.

Control Board Senior Research Analyst Michael Lawton said an all-time record on the Strip for slot machine revenues and a healthy month for the Strip’s high-end baccarat business fueled the results.

Lawton said all the sub-markets were up in May, “which can be attributed to strong demand, healthy consumers and leisure travel beginning to rebound.”

The $1.23 billion figure was up 25.3 percent over May 2019. The state is comparing monthly totals to 2019 because casinos statewide were closed in May 2020 during a 78-day shutdown of businesses during the pandemic.

On the Strip, gaming revenues of $655.5 million marked a 26.7 percent increase over May 2019. Strip resorts reported baccarat revenue of $105.9 million in May, an increase of 97 percent from 2019. Casinos played luckier during the month, holding more than 22 percent of all baccarat wagers, compared to a 7.7 percent hold in May 2019.

Record-busting slot machine revenues on the Strip came in at  $358.3,24.5 percent over May 2019.

“Sequentially, gross gaming revenues (on the Strip) showed a nice acceleration,” J.P. Morgan gaming analyst Joe Greff said in a research note. Even without including the baccarat, Greff said the Strip’s monthly revenue totals would have been up 19 percent with wagering volumes increasing 17 percent.

May marked the third straight month that Nevada gaming revenues eclipsed the $1 billion mark. For the first five months of 2021, statewide gaming revenues are up 1.3 percent compared to 2019, when the Nevada casinos collected more than $12 billion from gamblers, which was the first year the state hit such a lofty total since 2007.

Macquarie Securities gaming analyst Chad Beynon said he wouldn’t be surprised if the results from the last three months in Las Vegas carry over into the summer.

“Looking ahead, although a traditionally weaker month of the year, June hosted two noticeable events, the World of Concrete, the (city’s) first major convention on June 8-10, and the Resorts World Las Vegas opening on June 24, the first major opening on the Strip in more than 10 years,” Beynon said in a research note.

On the Strip, despite May’s total number, gaming revenues are down more than 13.6 percent compared to the first five months of 2019.

International travel still down

Baccarat totals for the month aside, the Strip is still missing a key business segment – high-end international customers.

During May, McCarran International Airport reported its highest single-month passenger total since February 2020, the last full month of operations before the pandemic. Still, the more than 3.5 million passengers flying during the month of May still marked a 23.3 percent decline over May 2019.

International travel continues to be a challenge for Las Vegas, with just 50,258 passengers recorded in May, a decline of 85.1 percent —  all of the passenger traffic coming from Mexico. Las Vegas once had direct flights between 11 different countries.

In May, a Senate Subcommittee on Tourism, Trade, and Export Promotion co-chaired by Sen. Jacky Rosen (D-NV) discussed ways to bring back the international travel market.

At last week’s grand opening event for Resorts World Las Vegas, Gov. Steve Sisolak acknowledged the need for international travel to help fill Las Vegas Strip hotel rooms.

Resorts World is owned by Malaysia-based Genting Berhad, which operates several large gaming properties throughout Asia.

“We’ll get international travel back in time,” Sisolak told The Nevada Independent. “It’s a key market. International customers spend more and stay longer.”

Sisolak said he discussed international travel issues with Genting Chairman K.T. Lam, who said the company has international customers who live in California and New York who will come to Resorts World Las Vegas.

For the first five months of 2021, McCarran’s passenger volume is down 41.7 percent over the same time frame as 2019.

Good news outside the Strip

Casinos in downtown Las Vegas recorded their combined second-highest all-time monthly revenue total during May – $75.2 million – an increase of 37.2 percent over May 2019. The figure fell just below April’s single-month record of $76.3 million in gaming revenue.

Analysts have credited the opening last year of Circa Casino Resort as helping to bring additional business downtown. For the year, downtown gaming revenues are up 21 percent over 2019.

In Washoe County, casinos recorded the region’s highest monthly gaming revenue total since August 2008, $91.9 million, an increase of 23.1 percent.

Statewide, Nevada sports betting business set a monthly record during May for both revenues and total wagers. Sportsbook operators took in $477.4 million in bets during the month, an increase of 50.4 percent over 2019, while holding revenues of $27.1 million — a jump of 140 percent.

Mobile sports wagering accounted for 62 percent of all sports wagers in May.

This story will be updated later today with Las Vegas visitation numbers for May.

Sales of sports betting and lottery divisions on the horizon for Scientific Games

Las Vegas-based Scientific Games, which saw a change in control last fall through the stock sale and departure by the gaming equipment provider’s billionaire chairman, said Tuesday it plans to sell its legacy lottery business and a sports betting operation the company spent millions of dollars to develop.

The announcement was not surprising to the investment community.

Scientific Games officials said last year the company was conducting a “strategic review” of its five corporate operations in an effort to reduce a daunting $9.2 billion in long-term debt that has been hanging over its balance sheet. Much of the debt goes back to the company’s $5.1 billion acquisition of slot machine giant Bally’s Technologies in 2014.

Jefferies gaming analyst David Katz predicted proceeds from sales of the two businesses could eliminate more than half of the company’s overall debt.

“Management has stated repeatedly the goal is to deleverage rapidly and unlock value across the business segments,” Katz said.

Scientific Games is considered one of the three largest slot machine providers to the U.S. casino industry, along with International Game Technology (IGT) and Australia-based Aristocrat Technologies. In addition, the company provides equipment and technology to a large contingent of U.S. state-run lottery businesses, where it also competes with IGT.

Truist Securities gaming analyst Barry Jonas predicted that Scientific Games' approach could have “wider ramifications” for the gaming equipment supplier industry as a whole. Other companies, such as IGT and Everi Holdings, could sell off pieces of their operations, for example.

“Scientific Games' new deconsolidation strategy highlights how most operator buying decisions are very specific today, with less opportunities for bundling and more decisions based on quality of each product,” Jonas told investors.

Shares of Scientific Games, traded on the Nasdaq, hit a 52-week high Tuesday of $80.81, before closing at $77.68, up $1.72 or 2.26 percent.

In its announcement, Scientific Games said it would focus its business on three areas: the games division that provides gaming equipment and management systems to the casino industry; development of its online gaming business; and the growth of its social gaming subsidiary, SciPlay.

Deutsche Bank gaming analyst Carlo Santarelli said those three businesses provided the company with a combined $1 billion in cash flow in 2019.

During a conference call Tuesday, Scientific Games CEO Barry Cottle said the digital gaming market, including online casino gaming, could produce annual revenues “comparable” to the company’s land-based gaming revenue stream in just three years. Cottle said the company’s platforms support 24 percent of all igaming business in the U.S. However, Cottle didn’t say whether the growth would occur through new markets or other means.

Scientific Games said it was considering several possibilities for unloading the lottery and sports betting divisions, including an outright sale of both businesses, an initial public offering through a special purpose acquisition company (SPAC) or a strategic combination with another business.

“We have a range of options, but we want to streamline our portfolio,” said Scientific Games Chairman Jamie Odell.

Analysts questioned the announcement’s unusual timing, coming as Scientific Games’ second quarter closes Wednesday. Normally, a company would drop such major news during a quarterly conference call.  Cottle and Chief Financial Officer Michael Eklund, however, hinted that the company could be making another announcement shortly.

“At this point, the market is going to determine the timing, the value (and) the final structure of the deal,” Eklund said. “We are very well advanced in the process. We think we can move pretty quickly.”

Scientific Games has 9,000 employees worldwide, with roughly 4,200 in the U.S., according to its most recent annual report. The company did not say how many employees are working at its corporate headquarters and production facility south of McCarran International Airport.

J.P. Morgan gaming analyst Joe Greff said Scientific Games’ effort to bring down its debt was positive news for the company. Accelerating its debt pay-down will bring its leverage figures “into a level more comparable to (its) peers,” he said.

Scientific Games global headquarters seen Tuesday, June 29, 2021, in Las Vegas. (Jeff Scheid/Nevada Independent)

Ronald Perelman pushed the growth

Scientific Games has been through numerous significant changes and rapid expansion going back to 2013, when the lottery-centric company acquired slot machine developer WMS Industries for $1.3 billion. A year later, the acquisition of Bally solidified its focus on the casino gaming industry, and Scientific Games moved its headquarters from Georgia to Las Vegas. The lottery headquarters remained in Alpharetta, Georgia, which is just outside Atlanta.

Scientific Games was long controlled by billionaire Ronald Perelman, the company’s chairman who owned 39 percent of the outstanding stock through his MacAndrews & Forbes Holding Co. 

Perelman, currently No. 103 on the Forbes 400 list with a net worth of $3.7 billion, engineered the deals in order to drive Scientific Games to the top of the gaming equipment sector.

During that time, the company was led by four different CEOs. Cottle has been in the position since 2018.

Perelman sold his stock and stepped down as chairman last year. Odell, a former CEO of Aristocrat from 2009 to 2017, who had been an advisor to Perelman and Cottle, became chairman and announced the strategic review.

Sports betting and lottery divisions

As the U.S. embraced legalizing sports betting, Scientific Games built an operation that would provide technology and back-of-the-house services. In January 2018, the company spent $625 million to acquire NYX Gaming Group, which created “OpenBet,” a digital sports betting platform. Later that year, the company paid an undisclosed price for Don Best Sports Corp. The company, which provided oddsmaking and real-time sports data, was incorporated into OpenBet.

During the quarter that ended March 31, Scientific Games said it was providing its sports wagering platform to 24 sportsbooks in 12 states with three more locations coming online in the next three months.

The company’s lottery business also has continued to grow. During the first quarter, the company said its instant game lotteries experienced double-digit sales growth in 43 of 45 states where technology and lottery products were provided. Scientific Games said instant lottery game sales in the United Kingdom also increased 10 percent.

“We think the sale of lottery and sports betting makes sense, given the argument could be made that the market has not given either full value relative to (comparisons),” Jonas told investors. He added that both divisions have large contracts with renewal or rate contraction risks.

Jonas suggested “operators” might be the “potential acquirers” of the company’s sports betting division.