Research Library

Research Brief: U.S. Senate Judiciary Committee – Protecting the Integrity of College Athletics

Today, the United States Senate Judiciary Committee held a hearing titled “Protecting the Integrity of College Athletics.” The full committee, chaired by Senator Lindsey Graham (R-SC), heard testimony on two major topics in college athletics, Name Image Likeness (“NIL”) and sports betting. These are two issues that, while extraordinarily important in college athletics, the NCAA clearly lacks the proper education to understand their true impacts. The hearing was divided into two panels with a total of seven testimonies on these two major topics:

Panel I: Name Image Likeness
• Dan Radakovich, Athletic Director, Clemson University
• Professor Matt Mitten, Executive Director of the National Sports Law Institute, Marquette University School of Law
• George Wrighster III, Former Member of the National Football League Players Association (“NFLPA”) Board of Representatives
• Dr. Mark Emmert, President of the National Collegiate Athletic Association (“NCAA”)
• Ramogi Huma, Executive Director of the National College Players Association (“NCPA”)

Panel II: Sports Betting
• Bill Miller, President and CEO of the American Gaming Association (“AGA”)
• Heather Lyke, Director of Athletics at the University of Pittsburgh

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Free to Play

As the sports arena fell silent due to the coronavirus, a host of new sports and games sparked the curiosity of sports fans and bettors, such as esports, Belarusian soccer, Russian ping
pong, Taiwanese baseball, darts and more. However, the main professional leagues and other U.S. sports have moved to free-to-play (F2P) as a way to stay engaged with fans during this unprecedented and uncertain time.

F2P is an opportunity for players to engage with games and products for fun or practice, sometimes in real time. F2P offers the same entertaining gameplay offering bonus rewards or prizes found in real-money games while allowing game producers, brands, and operators to cultivate new customers.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming July 2020

As we hit the midpoint of the year as well as over 100 days into the Great Shutdown, sports are still navigating uncharted waters as they look to reemerge. NASCAR, UFC, and boxing have dominated the airwaves in addition to baseball from Asian-based leagues. Sports betting revenues have remained well below average in states across the country including Nevada that, for the second month in a row, redacted the number in its monthly report. Some states continue to see decent numbers as they are able to incorporate online gaming revenue into the mix, while other jurisdictions are using this time to get things in place as they have emerged during the pandemic.

Major professional sports are just starting to figure out how to come back. This includes the soon-to-start NBA that is beginning its social distancing efforts in Orlando. The NHL will be heading north to finish its season, after what was viewed as its favorite hub city in Las Vegas was overlooked because of a spike in coronavirus cases and a media blitz by the local culinary union that did more to dissuade visitation than to protect workers and guests. The biggest question continues to be on the football season that just saw the NFL cut its preseason from four games to two, as well as major college football programs trying to figure out how to start fall camp while testing their student-athletes and staff as they return to campus.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming June 2020

While sports betting revenues remain low during the Great Shutdown, sports are beginning to return to the scene, and while there may not be fans in stadiums, there is a wealth of opportunities to keep fans engaged and restart sports betting revenue generation around the U.S. While April and May will still be fairly dismal in terms of numbers and performance, it is important to lay the groundwork now for the return of sports in the near term. This will not only make the argument that sports will hopefully unite society during this challenging time, but it can also influence and motivate other states to consider legalizing sports betting to compete against the illegal market.

Foreign sports such as European soccer continue to dominate the sports airwaves, but other familiar sports are beginning to emerge through the world of COVID-19 testing and social distancing. This includes the first out of the gate with the UFC, followed by NASCAR which has now hosted a series of races. The return of golf was highlighted over Memorial Day weekend with “The Match” featuring Tiger Woods/Peyton Manning vs. Phil Mickelson/Tom Brady.

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Reform to perform: Shutdown provides rare POGO opportunity

As the brick and mortar gaming world fell silent in response to the coronavirus, many online gaming operations continued throughout the pandemic. However, the Philippine Amusement and Gaming Corporation (PAGCOR) and President Rodrigo Duterte also shuttered the Philippine Online Gaming Operators (POGOs) in the middle of March in response to the outbreak. POGOs have made a sizeable impact financially to the Philippines, with revenues increasing by more than 13% from 2018 to 2019.

In late April, the government began to hold conversations about restarting these operations and deeming them essential businesses as a way to help finance a government heavily hit by a revenue shortfall due to the pandemic. After a six–week break, they were allowed to restart these operations following the strictest guidelines issued by the government under the Enhanced Community Quarantine (ECQ). Restrictions included limitations on staff sizing (30%), shuttle services for employees, temperature checks, social distancing and masks for employees.

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Strip Reset: COVID-19 is definitely challenging, but does the crisis present opportunities for a Vegas makeover?

Las Vegas soared until recent years, but we’ve reached the tipping point, where it’s necessary for the Strip to redefine itself again. Las Vegas is like no other place in the world. It’s the entertainment and sports capital of the world. It has the most amazing resorts. It just needs to remember our industry’s roots, redeliver on customer service, and provide value.

Covid-19 has devastated the industry and the greater Las Vegas economy. With the resulting industry shutdown, the city must take the opportunity to develop a strategy to reopen, reinvigorate and recapture its guests.

For the first time in well over a decade, both Caesars Entertainment and MGM Resorts, which between them operate 18 Las Vegas Strip resorts, have new leadership teams. These teams are comprised of seasoned casino industry professionals—not outsiders from professions other than hospitality—who have the ability to make these changes.

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Research Brief: PASPA U.S. Sports Betting Two Years Post Repeal

Two years ago, the Supreme Court of the United States made a historic decision in Murphy v. NCAA (National Collegiate Athletic Association), ruling on the constitutionality of the Professional and Amateur Sports Protection Act (“PASPA”). In overturning PASPA, the Supreme Court allowed sports betting to spread across the country with active sports betting now in 18 states. There are eight other jurisdictions that are in the process to go live in the near future, including North Carolina, which is tribal; Tennessee and the District of Columbia, which have regulations completed; Washington, Virginia, and Puerto Rico, which are currently in the regulatory phase; and South Dakota and Maryland, where sports betting will be on the ballot this November.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming May 2020

When the Wind Creek Bethlehem (formerly Sands) facilities initially received a gaming licensing in 2006, the licensing team produced a video that talked about the effect that Bethlehem Steel had on the town. This was the steel plant that helped build the New York Skyline and supported our military might through World War II. The eventual shutdown of the blast furnaces at the plant was the stoppage of the American icon that used to run 24/7/365. Those that still live in Bethlehem today have said that the blast furnaces created a deafening noise when they fell silent. Some may say that we are hearing the same noise today as the sports world has fallen silent.

With the Great Shutdown upon America and most of the world, operators and sports fans have had to look to other sports than the traditional major league and amateur sports that Americans where used to watching. Snooker, bandy, darts, and other games are now commonly found on sports betting apps along with a greater understanding of sports like Taiwanese baseball, Russian ping pong, and Belarusian soccer that have all seen their day in the sun as regulators work with operators to provide content for sports books. While ESPN may be televising cherry pit spiting or rock skipping, those sports have yet to make the cut as operators and regulators have not determined whether or not these are valid events that could have a wager conducted.

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Research Brief: Japan’s IR Opportunity

Given these unprecedented and uncertain times, many questions continue to be raised as to how the process of integrated resorts in Japan may be affected by the ever-changing events surrounding the coronavirus (COVID-19) pandemic. As seen by government actions around the globe, this virus has not only affected Japan, but the rest of Asia, the United States, the Americas, and the world. China is experiencing a second wave of the virus not only in Wuhan, which just recently updated its case counts, but throughout the country. This has extended over the past few weeks to other jurisdictions such as Hong Kong, which just extended its lock down by 14 days, and other parts of Asia that were not initially hot spots but have extended as conditions have changed.

Japan’s integrated resort selection process has come into the crosshairs between numerous issues including the virus, the now-2021 Olympics, the upcoming World Expo in 2025, and the microcosm of Japan’s political process. While tourism has been halted across the globe, Japan will once again be on a path to achieve the tourism goals set by Prime Minister Abe; goals which are achievable with the introduction of integrated resorts once the pandemic subsides. The robust opportunity remains available for Japan to reach these goals and bring in tens of billions of dollars in investment between the three licenses, as well as job creation and other economic benefits that go along with them.

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Research Brief: Understanding Casino Operations

Given the uncertainties of coronavirus disease (“COVID-19”), investors are looking to understand the general operating parameters of a given casino operation and fixed versus variable expenses. This document provides detail on the intricacies of casino operations from a revenue and expense standpoint, including gaming revenues, operating expenses, and earnings before interest, taxes, depreciation, and amortization (“EBITDA”). The goal of this exercise is to provide an understanding of how these items may fluctuate between operators, as well as between jurisdictions. Additionally, this document will provide readers with an understanding of fixed versus variable expenses (for facilities that are open), allowing investors to more accurately project the performance of target properties under a variety of recovery scenarios.

The following discussion is based on Global Market Advisors’ (“GMA”) experience of reviewing hundreds of income statements from casino properties across the world. For the purposes of this analysis, GMA focused its evaluation on regional gaming operations in the United States, representing casino operations that have generated between $50 and $700 million in annual gaming revenue. Often, the only access that investors may have to operating income statements would be from those published from Nevada and New Jersey. As will be seen within this document, many departmental and overall margins vary greatly from casinos between these and other states. While many operations may have expenses that lie outside of the ranges presented in this report, the overwhelming majority of regional casinos across the United States likely fall within these ranges.

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