Brendan Bussmann

Macau: The Future Beyond the VIP

Fifteen years ago, on May 18, 2004, Las Vegas Sands Corp. opened Sands Macao and changed the course of casino gaming in the region.

Macau was once considered a secondary gaming market that catered to a small base of customers from Hong Kong and Guangdong, China. However, Sands Macao and subsequent entrants demonstrated that by providing high-quality gaming, dining and lodging environments, markets will respond.

In the case of Macau, markets responded enthusiastically. In 2005, the city’s casinos generated $5.9 billion in gaming revenue, and by 2018, the industry had generated $37.9 billion.

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The Importance of Data in Sports Betting

As sports betting expands into new markets within the United States, operators and state governments are growing eager to capitalize on the opportunity.

In addition to Nevada, seven states now offer some form of sports betting in the post-PASPA (Professional and Amateur Sports Protection Act) world. This number will likely grow as 2019 continues to unfold, as a supermajority of states plan to look into the opportunity for sports betting within their borders. Global Market Advisors has previously estimated the sports betting market at $139 billion, but that figure is contingent on how the market is crafted in each state.

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Research Brief: Education on Sports Betting

Since the repeal of the Professional and Amateur Sports Protection Act (“PASPA”) by the U.S. Supreme Court, seven states have legalized and launched sports betting. These states include Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, Rhode Island, and New Mexico, in addition to Nevada which has been operating legally for decades. Each state has tailored their own sports betting regulations to meet their unique market dynamics. While some states have not instituted the most ideal tax rates or structures, these states are adding a new revenue source to their existing gaming and lottery product.

Nearly 30 states have introduced sports betting related language as of the writing of this brief, and others are expected to follow suit in the coming weeks and months as they look either to pass legislation or to study the opportunity that sports betting could provide to their state. Many of these states have already started to hold hearings or are continuing the debate from last year. As these states continue these conversations, they should take two things into consideration. The first is that integrity, first and foremost, is upheld in the legislation and regulations that are established for sports betting. It is never in a fee or royalty that is paid to anyone that is not taking the risk of operating a sports book. Second, there should be no rush to enter the market, as first-to-market status has already been achieved. At this point, it should be about taking the time to get things right by creating a robust, competitive market in a strict regulatory environment.

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Sports Betting Across America: A 2019 Legislative Preview

As 2019 begins, states across the country are looking at their legislative agendas. Every state’s legislature will meet in 2019 and there will be several issues that will be discussed,some of which will revolve around gaming and lottery. One thing that will likely be discussed in every state is the potential for sports betting. This is an important opportunity for state lotteries to expand their portfolio of games and connect with the next generation of players.

Many states are assessing the expansion opportunities for the lottery. This may include the use of video lottery terminals, iLottery, or other forms to sell their existing products through the internet, kiosks, or other means. The potential for sports betting to enhance funding for good causes is another option that many Lottery Directors across the country are hoping their state legislators are considering. Commercial casino and online gaming operators also recognize the economic potential of sports betting, and are lobbying state legislators to implement a license-and-regulate model that would enable them to offer sports betting.

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Research Brief: Reversal of the 2011 Wire Act Memo

Late in the afternoon of January 14, 2019, the U.S. Department of Justice (“DOJ”) issued a new
memo reversing its stance on the Interstate Wire Act of 1961 (“Wire Act”). This 23-page memo
issued by the DOJ’s Office of the Legal Counsel (“OLC”) dated November 2, 2018, stressed that
all forms of gaming apply to the Wire Act. It reversed an earlier DOJ memo issued in 2011 that
stated that the Wire Act only applied to sports betting.

The action, which at best can be described as reversing a reversal, raises several concerns for the
gaming industry, especially for online gaming that occurs in the states of Nevada, New Jersey,
and Delaware, with active startups underway in Pennsylvania. The decision also may have
serious implications for mobile gaming, sports betting, daily fantasy sports (“DFS”), lottery, and
potentially even internet/social media marketing programs. Global Market Advisors (“GMA”)
had predicted for some time that the reversal of the 2011 Memo would occur during the Trump
Administration through the efforts of the Committee to Stop Internet Gaming (“CSIG”).

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10 Trends – Rating the Rising Sun

Japan may look like it will be a sleeping giant in 2019, but the upcoming year may prove to be the most critical year in Japan’s march toward integrated resort development. Japan took a major step forward this year with the passage of the IR Implementation Bill and the Basic Bill on Gambling Addictions Countermeasures.

Next year will be one of the more critical years in the process as Japan contemplates the largest land-based gaming opportunity since Singapore in the mid-2000s. While outside observers may not see significant progress, a regulatory framework will be established in 2019 that will likely include more than 300 regulations. These regulations will determine the true market potential and scope of Japan’s three integrated resorts.

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Research Brief: U.S. House Hearing on Sports Betting

Today, The United States House of Representatives Judiciary Committee held a hearing entitled “Post-PASPA: An Examination of Sports Betting in America.” The subcommittee on Crime, Terrorism, Homeland Security, and Investigations, chaired by Representative Jim Sensenbrenner (WI-5), heard testimony from five stakeholders related to sports betting. This included, in the
order presented:

• Jocelyn Moore, Executive Vice President, Communication and Public Affairs with the
National Football League
• John Warren Kindt, Professor with the University of Illinois
• Sara Slane, Senior Vice President of Public Affairs with the American Gaming Association
• Jon Bruning, Former Nebraska Attorney General and Counselor to the Coalition to Stop
Online Gambling
• Becky Harris, Chairwoman of the Nevada Gaming Control Board

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Sleeping Giant: Brazil is one of the few strong opportunities for IR development

While most of the gaming world is focused on Japan as the next emerging market, a battle continues south of the Equator to legalize gaming in Brazil. This untapped market could serve as the cornerstone for gaming development in the region if it were to become a fully regulated market. With the world’s fifth largest population, Brazil serves as one of the few strong opportunities left as an emerging jurisdiction for integrated resorts.

Brazil is one of the few large countries that does not have legalized gaming, and local stakeholders have come to believe that it puts them at a disadvantage to compete as a tourism destination at the international level. Like many potential gaming jurisdictions, local politicians see the case for integrated resorts as a way to generate tourism and economic development.
One of the best cases of this that is still used in jurisdictions like Japan and Brazil is the growth that Singapore saw with the addition of Marina Bay Sands and Resorts World Sentosa in 2010. Brazil, which is coming off of hosting the Olympics two years ago, looks to continue to build its tourism with IRs serving as a base to attract individuals to the region.

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Responsible Gaming in Japan – Bill to be key to Japan’s Gaming Market

As Japan continues to look at the development of integrated resorts (IR), many people engaged and following the market are focused on the IR Implementation Bill. While it is important to know the regulatory framework, it is just as important for operators and interested parties to understand the importance of responsible gaming measures. This second bill that has sometimes been overlooked in recent months focuses on this topic.

Japan has the fortunate position of being able to use the Republic of Singapore, which launched its quest for IRs roughly 15 years ago, as a guide. Not only do they have Singapore’s Casino Regulatory Authority as a model for the regulatory body, they also have the National Council on Problem Gambling (NCPG) as a reference point as they develop an atmosphere of responsible gaming.

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Home Stretch in Japan

For nearly 20 years, Japan has gone through several false starts and iterations in its attempt to legalize integrated resorts. In December 2016, Japan took its first official first step toward legalization with the passing of the IR Promotion Bill. Later this spring, Japan is poised to take the final step in this process with the introduction of two bills that will help solidify the initial act: the IR Implementation Bill and the Basics Bill on Gambling Addiction Countermeasures.

The government of Japan has been contemplating what items to include within these bills in its quest to create an environment that maximizes the potential benefit realized by the country in terms of investment and tourism as well as to attract quality operators to the market.

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