Lawmakers in Pennsylvania are making a renewed attempt to clear the internet gaming bill this year. A bipartisan bill that seeks to legalize gaming in the state is expected to be soon introduced and will aim to get legislative approval before June 30, which is the deadline for funding the state’s budget
Last year a comprehensive gaming expansion bill that included online gaming had been passed by the House twice but the Senate showed no interest in clearing it. The legislation requires clearance by June 30 in order avoid a budget shortfall of $100 million, which is the revenue earmarked to be received from online gaming.
The latest bill is being introduced by Sen. Jay Costa and his Republican counterpart Sen. Kim Ward who are hoping to get approval from Senate lawmakers after a thorough discussion.
In a statement Costa said,
I think the resistance was a lot of folks not happy with the scope of what the House was trying to get done. The idea was since we had until June 30 to collect the $100 million needed from iGaming, there was no need to pass for the sake of passing until we had the opportunity for a full-blown conversation. If we did it, we wanted to do it right — and that's what we're trying to do.
The difference between the latest version and the last year’s bill is that it proposes a higher tax rate of 25 percent and has included internet lottery sales. The bill has also omitted video gaming terminals that operate away from casinos, which has been a controversial addition last year.
Costa has defended the relatively high rate of taxation stating that the industry would be able to absorb the cost and still be successful. He pointed out that several people had stated that 55 percent tax on slot machines wouldn’t be accepted but it was. However Costa admitted that in the end the final rate would need to be negotiated and said that it would be finalized over discussions in the next few months.
Rep. George Dunbar has taken the lead in authoring a similar bill for the House. Costa said that he expected the gaming expansion package legislation to be cleared by April. Costa also highlighted that the Senate was closely monitoring the situation with respect to reinterpretation of the Wire Act, referring to the recent statements of the new attorney general Jeff Sessions who has said that the reinterpretation by the Obama administration had shocked him. A reversal in its interpretation is likely to threaten the legality of online gaming.
The Aspers casino development planned in Southampton’s Royal Pier is now in the clear after a High Court judge rejected a challenge to the City Council’s decision to award the project to Aspers.
The victory puts the massive waterfront redevelopment program of which the casino is a part, back on track.
The legal challenge came from rival Global Gaming Ventures (GGV) which had a competing offer to construct a casino in the city at the Hammerson shopping development in West Quay Watermark.
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In a statement a city council spokesman said,
The High Court has dismissed the claim made against Southampton City Council by Global Gaming Ventures in respect of the award of the large casino license to Aspers last year. Costs to be paid by GGV have been agreed and there is no cost to the residents of Southampton.
GGV has won similar tenders in the cities of Leeds and Bath and decided to take Southampton Council to court after the council decided to award the casino license to Aspers last year. The company claimed in its suit that since the term Gross Value Added is part of the evaluating criteria, the benefits should have been assessed mathematically.
GGV also noted that the construction activity at the West Quay Watermark was already ongoing while the Royal Pier project is yet to kick off. Additionally GGV stated the council has failed to have an alternative tenant for the project.
Justice Jeremy Baker however rejected its claims and said that the council had made it clear from the beginning of the tender process that the Royal Pier was the ideal location for the license.
Richard Noble, Chief Operating Officer of Aspers said that the company was looking forward to developing a high quality casino in Southampton pointing out that it had already delivered two such projects previously in UK.
Reacting to the judgment, Royston Smith, Tory MP for Southampton Itchen said that the casino was envisioned to be the primary financial driver for the waterfront redevelopment project so it was the right decision. Plans for the casino complex include development of 730 apartments, several restaurants, close to 50 retail outlets shops along with a 250-bed luxury hotel.
The Aspers project is expected to generate around 180 new jobs in the area. Taxation has been set at two percent of its gross gaming revenue. The company will be making an initial payment of £100,000 towards the license and then a further £150,000 on opening. An annual payment of £50,000 will be made for gambling programs.
In a positive start to the new year, online gaming bills are being introduced in several states in America during the ongoing legislative session. This was a positive sign for proponents of the online poker industry in America as not a single state had been able to pass an iGaming bill in 2016.
Lobbying group, the Poker Players Alliance recently highlighted that states of Pennsylvania, New York, Michigan, Hawaii, New Hampshire among others were planning to introduce online gaming bills in the near future.
In Pennsylvania State Senator Kim Ward met with casino executives in early January to discuss the expansion of online gaming. Shortly afterwards Senator Jay Costa tabled a Senate Co-Sponsorship Memorandum that laid out his intention to introduce the legislation. The bill deals with the pending casino tax issue in the state as well as the approval for internet sales for the state lottery along with legalization of internet poker and daily fantasy sports.
In New York, Senator John Bonacic who had been the sponsor of an online poker bill in 2016, once again introduced a similar bill to authorize and regulate online poker. The bill has been referred to the Racing, Gaming and Wagering Committee, which is headed by Bonacic. Washington currently considers gambling to be a felony and all earlier bills have failed to make it through. A recent study has however shown that online gaming revenue will net the state around $100 million annually. The new bill has pointed out that the demographics in the state were similar to that of online players in the state of New Jersey. Possibly prompted by this, the State Senate Commerce, Labor and Sports Committee held a hearing on online poker and daily fantasy sports in mid-January.
In Michigan, the bill introduced by Senator Mike Kowall in 2016 failed without being put to vote. So far in the current year meetings are being held to sort out the holdups including concerns raised by tribal groups. Online gaming bills introduced in Hawaii and New Hampshire were both surprise announcements but there is not a lot of hope for it to be approved in these states given the long-standing opposition to gambling there. Massachusetts is awaiting the results of a study ordered by Governor Charlie Baker in 2016 which is expected in July. A, online gaming bill has been already introduced by State Senate Minority Leader Bruce Tarr but it is likely to move forward only after study results are released.
Melco Crown Philippines (Resorts) Corp, the Philippine subsidiary of Asian casino operator Melco Crown Entertainment Ltd. is seeking to rebrand itself and drop the reference to Crown in its name. The company operates the City of Dreams casino in the dedicated gaming and entertainment complex called Entertainment City in Manila.
The move comes in the aftermath of Hong Kong-listed casino group Melco International Development Ltd controlled by Lawrence Ho Yau Lung gaining a majority stake in the parent company.
Its joint venture partner Crown Resorts Ltd, an Australian casino group has been decreasing its stake in Melco Crown Entertainment over the past few months. The company announced in December that it will be bringing its stake down to just 11.2 percent. A key reason for this strategic shift has been due to Crown’s decision to withdraw from its international ventures and focus solely on its Australian projects.
The move to rename follows the disclosure made by Melco Crown to the U.S. Securities and Exchange Commission last month that a new corporate entity would be announced due to Crown Resorts’ stake reduction. A filing made by Crown Resorts in late December said that once its direct holding in Melco Crown drops below 25 percent it has the right to terminate licenses provided under intellectual property agreements including use of its brand name.
According to a filing submitted with the Philippine Stock Exchange, the new name being proposed by the Philippine subsidiary is Melco Resorts and Entertainment (Philippines) Corp. The modification is subject to regulatory approval. The name change was proposed after a decision was taken at a special board meeting of the Philippine unit. There is no indication as of now if the Crown Towers Manila which is the hotel tower within the City of Dreams casino resort would also undergo a name change.
The change in ownership has also been reflected in board composition of the Melco Crown’s Philippines unit. Three directors including Todd Nisbet, currently the executive vice president for strategy and development at Crown Resorts would be vacating their seats on the Melco Crown Philippines board with immediate effect. Additionally the size of the board has been reduced from nine members to seven.
It was earlier announced that Nisbet would be resigning from the Melco Crown board along with James Packer, the chairman of Crown Resorts who would resign as co-chairman of Melco Crown.
Hard Rock Café International, the U.S-based café and casino group has appointed industry veteran Edward Tracy as the chief executive officer of its newly-set up Japanese unit, Hard Rock Japan LLC.
Tracy retired from his role as the president and chief executive of Macau casino operator Sands China in March 2015 where he played a pivotal role in establishing the group’s presence in Cotai.
After his retirement, Tracy was hired immediately as a consultant.
In a statement Jim Allen, chairman of Hard Rock International said,
As the former CEO of Sands China Ltd and CEO of the Trump Organization, Tracy brings more than 30 years of proven gaming, hospitality and integrated resort experience to Hard Rock. We are confident in Tracy’s ability to lead the company’s efforts in Japan and we look forward to seeing our business continue to grow under his leadership.
Japan recently passed the Integrated Resorts Promotion Bill that has legalized casino gambling in the country allowing for the development of integrated casinos in the country.Industry analysts have estimated that the market can generate gaming revenues of up to $40 billion within a few years of operation.
Hamish Dodds, chief executive of Hard Rock International Inc had confirmed last year that the company was interested in making a major investment into the Japanese market. With the appointment of Tracy and the creation of the Japanese unit, the company has highlighted its commitment to expansion and growth in Asia.
Tracy has over 30 years’ experience in the industry and has overseen the opening of Sands China’s $4.2-billion Sands Cotai resort in 2012 as well as the development of the $2.7 billion Parisian Macao. Prior to his stint with Sands, Tracy was the president and CEO of Capital Gaming, a regional casino management company. He has also served as president and CEO of the Trump Organization, where he managed over 3,000 luxury hotel rooms and gaming space of 240,000 square feet as well as around 12,500 employees.
Hard Rock said that with the passage of the bill in Japan, it would be leveraging the expertise and experience of Tracy in making a serious bid for the licenses when they become available.
Hard Rock International which has operations in over 74 countries worldwide is currently in expansion mode. The company partnered with Melco International Development Ltd to make a joint bid to develop a new casino in the Republic of Cyprus.
Konami Gaming Inc, the Las Vegas-based subsidiary of Konami Holdings Corp, a Japanese conglomerate has said that its current priority is developing products aimed at attracting millennials as customers. The company designs and manufactures slot machines and casino management systems for casinos.
Konami’s new president and chief executive, Steve Sutherland said that future growth will come from products that cater to the interests of millennials. In a statement Sutherland said,
The biggest potential for growth is likely with new player demographics, particularly millennial audiences. Across our industry, operators and suppliers are trying to find the right products to resonate with millennials’ entertainment preferences.
The declining trend of gambling revenue seen by casinos indicates a shift in preferences of the millennial generation. The gaming industry has as a result been faced with the challenge of developing fresh products that can attract millennials to gambling. Millennials typically refer to those born after 1980 who are now in their 20s and early 30s and are said to have more disposal income than earlier generations.
A report from Spectrum Gaming Group LLC, a research and consulting firm specializing in the casino gaming industry stated that one of the top trends of 2017 was that of casinos creating new entertainment facilities such as lounges, skill-based games and other such features.
Another research firm Technavio has stated that the gaming equipment sales for casinos would be influenced by the preferences of these millennials. It pointed out that the increasing digitalization in entertainment including movies and games was a major factor in drawing the interest of millennials.
Sutherland said that the company was concentrating on new creative products that can appeal to a larger audience as well. A focus on multi-station type of games has led to the development of new products such as the Fortune Cup horse racing game and the Crystal Cyclone that has roulette-style bonus feature.
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The Fortune Cup gaming machine combines a traditional horse racing-based mechanical game with digital betting. Additional new products include several skill-based games some of which incorporate musical-rhythmic elements among other exciting features. Sutherland noted that he expects such products find favour with the millennials.
Along with focusing on research and development as a priority, Sutherland also highlighted that the North American arm would be bringing in innovative assets from its Japanese parent company.
According to Sutherland, the year 2017 was likely to be a building year. He believes that given the existing replacement cycle and casino growth, the industry may not see strong growth in the near future.
Vietnam’s gaming laws only allowed foreigners to gamble at casinos in the country and locals were not permitted entry.
The gambling market in the country has done really well during the last few years and as a result legislators recently decided to make a few changes to its gaming laws.
One of the biggest changes was moving forward with a 3 year trial experiment that would allow locals to gamble in two specified casinos based in the northern and southern parts of the country. Should the experiment prove to be successful, legislators might allow more casinos to permit locals to gamble.
The move to allow locals to gamble in Vietnam is expected to hurt Cambodian casinos that are situated near the border, especially in Bavet City, Svay Rieng Province which is near the Vietnam border. The casino is used to receiving a number of Vietnamese gamblers who found it easy to cross the border and gamble on a regular basis.
Cambodia’s casinos are also facing new tax regulations as the government has proposed an amendment to the current gaming law and is expected to increase gambling taxes and set new capital limits. The passing of the new gaming law in Vietnam and the rise in gambling taxes in Cambodia is expected to impact a number of Cambodian casinos and some of them might even have to windup operations.
In a statement, Anthony Galliano, CEO of Cambodian Investment Management said
The government’s ill-timed draft law, which would raise minimum capital requirements for casinos, combined with the Vietnamese decree, is the death knell for the already struggling border casinos. A good deal of these casinos are on life support and what is really needed is government incentives, rather than a regulatory blow, to save jobs and prop up the industry.
The Finance Ministry in Cambodia stated that the casino industry was responsible for generating $43.4 million in gaming taxes from January to November 2016. There are around 70 casinos in Cambodia as of now and 20 of these casinos are located near the border. These 20 casinos were responsible for generating nearly 25 percent of the $43.4 million in gaming taxes.
The deputy director general of the finance ministry, Ros Phearun stated that Cambodia’s casinos may not feel a major impact from Vietnam’s new gaming law in the short term as currently only two Vietnamese casinos will accept locals. However in the long term, Cambodia’s casinos could suffer especially if more casinos in Vietnam get approval to accept locals.
Jack Lam, a gaming entrepreneur from China is said to owe the casino regulator of Philippines a sum of PHP13.9 billion ($279.2 million) in unpaid tax monies with respect to his unlicensed gaming operations in the country, according to a local media report. There is no clarity as to how the amount was arrived at by the regulator PAGCOR (Philippine Amusement and Gaming Corp).
Lam was operating an online gaming business illegally from the Fontana Hot Spring Leisure Parks at Clark. According to his company’s website, the two operations that he has in the Philippines are the Fontana Casino and the Fort Ilocandia Hotel and Casino in Laoag City
Some sources in the media suggest that the amount that’s been arrived at is 1 percent of earnings from his junket operations while according to others it’s 1 percent of earnings from his total operations. One report quoted an internal source as saying that the amount of PHP13.9 billion was only an estimate since PAGCOR would not be able to assess the revenue of an illegal operation.
The key issue is related to identifying the regulator in Philippines responsible for issuing the gaming license for Lam’s online operation. According to Pagcor official Arnell Ignacio Lam’s company has been given formal approval for a casino, phone betting and junket operation but not for an online venture.
The case against Lam has its origins in the arrest of over 1,300 illegal Chinese workers employed at his gaming operation in December 2016. He is alleged to have gone on to try and bribe immigration officials as well as law enforcement officials in an attempt to settle the issue, resulting in the country’s president, Rodrigo Duterte calling for his arrest.
Lam has numerous operations in the gaming hub of Macau. His Jimei Group is said to handle junket operations at the City of Dreams in Macau based on the company’s website. As per a media report, Macau’s casino regulator, the Gaming Inspection and Coordination Bureau (DICJ) recently held discussions with Lam regarding his Philippine ventures. The DICJ said that the intention was to give Lam an opportunity to directly provide information on the issues surrounding his operations there.
The regulator stated that the process was routine since DCIJ was always keen to observe a junket’s operations at home as well as overseas. Paulo Martins Chan, director of the DICJ, said that the regulator has asked Philippines’ gaming body to share information regarding the Lam case.
New Jersey State Senator Raymond Lesniak who is also a candidate in the upcoming gubernatorial race in the state has said that he would take strong action if the Attorney General nominee Jeff Sessions takes steps to overturn the current interpretation of the 1961 Wire Act with respect to online gaming.
In response to a question from a vocal opponent of online poker, Sen. Lindsey Graham during his confirmation hearing, the nominee expressed shock at the 2011 Department of Justice memo that reinterpreted the Wire Act allowing internet gambling to be legalized.
Sessions said that he was unhappy with the decision and would be reconsidering it after careful study.
Lesniak pointed out that internet gaming was now playing a major role in revenue-generation for the casino industry in New Jersey and any threat to it would be challenged.
In a statement Lesniak said,
That's not going to sit well with our Atlantic City casinos, where online gaming is keeping the lights on. It hasn't been a spectacular success, but it certainly keeps the margins going, and it's actually the only increase in casino revenues that we've seen. It's certainly critical to the state of New Jersey and we'd be very concerned if he were to mess around with it.
Lesniak stated that if Sessions introduced a different interpretation to the law, the New Jersey administration would take him to court over it. Lesniak is a long-time supporter of online gaming and had been the one to introduce online poker legislation in 2013 that led to its legalization in the state of New Jersey. He announced his candidature earlier this month for the state’s gubernatorial race.
Current New Jersey governor Chris Christie has been supportive of online gaming. He signed the internet gambling regulation bill and also lent his support to Lesniak's lawsuit that sought to rule the Professional and Amateur Sports Protection Act (PAPSA) of 1992 as unconstitutional. The PAPSA is impeding New Jersey’s efforts to introduce sports betting within the state.
According to Lesniak, if he comes to power not only would such support for internet gaming continue but it would also witness a stronger push from his side. He stated that he would actively participate if the PAPSA gets placed before the Supreme Court while he is in power.
Lesniak also stated that he would push forcefully for casino expansion to North Jersey and for developing Atlantic City as a national gaming hub.
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