Casino

Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming – July 2021

The Halftime Report

Over the last 18 months, the world has faced serious challenges.  The paradigm has been turned upside down again and again with the impacts of SARS-CoV-2 and government mandates that have altered the landscape.  These challenges continue as events such as the Olympics will proceed for the first time without fans in the stands, including international visitors that bring significant economic benefit and global attention to the host nation.  This was one of the goals of showcasing the country of Japan to the world, but now the Games will also be without locals.  This has further angered local residents that did not want to host the games during the pandemic as they now will not be able to attend.

The year of 2021 in sports betting will be known for it’s one-upmanship, and this is not because the legislation for sports betting was improving and becoming more refined in using best practices achieved in other states.  It is instead the polar opposite, where the next state tries to one-up the others’ ability to craft a more unique market that often does not bode well for operators and, in the end, the consumers.  Each state that will be highlighted in further detail below has shown unconventional and ineffective path toward crafting their market, including tax rates set at upwards of 50 percent, ambiguity in the law that has caused the regulator to question key elements of their license structure, and in cone case a compact that likely violates the constitutional amendment that was pushed by the same tribe.

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Research Brief: State Legislative Update on U.S. Land-Based Gaming – July 2021

The Mid-Year Point

As the United States hits the midway point of this year, most state legislatures have adjourned their regular sessions. While some legislatures will come back in the fall because of the full-time status, most will only come back for a special session to handle redistricting that continues to to be delayed as states waif for data from the Biden Administration. Below is a summary of the current status in some key states:

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Mergers & Acquisitions – The More Things Change, The More Things Stay The Same

As the gaming industry continues to evolve, so do the industry players, corporations, suppliers, and other stakeholders.  The only constant among this group is that change thrives in this environment.

While some of the players may still look the same since before the pandemic, the hats they appear to wear can vary, as seen with such a high volume of mergers, acquisitions, and other corporate activities over the years.  Even through the pandemic, there was no stopping these continued efforts as companies either were slowed by the initial Great Shutdown or sought new opportunities to move forward.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming – June 2021

It has now been more than three years since the repeal of PASPA, with the New Jersey and Delaware markets reaching their three-year anniversary since launching sports betting operations.  It has also been three years of ups and down with the sports calendar and with sports betting revenue.  Revenue for the most part continues to climb, although it is difficult to find a stabilized year of data over the last twelve months due to the pandemic.  While is may be some time as the border wars continue, it will be critical to understand the full growth potential for this expansion opportunity in the gaming industry.

The industry continues to face the challenges of SARS-Cov-2, as seen most recently during the Memorial Tournament on the PGA Tour.  Jon Rahm, who at the time was up by six strokes, had to withdraw from the tournament because of a positive test.  While the PGA let him finish the round and notify him in a bizarre 18th hole revelation, it remind the sports community that this pandemic is far from over, especially on a global scale.  Sportsbooks took the change in the marketing in different ways with some counting it as a withdrawal and returning wagers to players, while other took it as a win for Rahm who had a dominant lead.  This did lead to several conversation throughout the industry on how to deal with these and other incidents in the future, as well as the implications on responsible gaming and potential effects into the future.

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Research Brief: State Legislative Update on U.S. Land-Base Gaming – May 2021

The legislative cycle is coming toward the end of its run for 2021 with only a handful of states remaining that have policy implications other than those states that have full time legislatures. With most focus at this point on Louisiana (the last legislature to go into session this year) and Connecticut on sports betting, a number of land-based opportunities did not materialize into expansion. However, there are options that continue to be discussed across the country that prove that land-based gaming is still very much alive.

Almost every casino is back open in the United States following the Great Shutdown. In several cases, business is currently booming, as seen in the resurgence of the gaming industry that faced its greatest challenge that was imposed by government mandates. Nevada is a prime example of this as it just saw one of the best months it has ever had in generating gaming revenue, surpassing the $1 billion mark. Destinations such as the Las Vegas strip are seeing the return of the leisure customer that is excited to be back after over a year of closures. Part of this has been through the continued health and safety measures of the industry, vaccination efforts that began late in 2020, and the relaxation of draconian polices that were not always rooted in evidence-based research.

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Research Brief: Paving the Regulatory Future for IRs in Japan – May 2021

As the world continues to face numerous challenges and rebounds from the pandemic, most countries around the world remain closed to outsiders. Japan and others throughout Asia are trying to find a way to reopen but have had to implement new restrictions and emergency orders. In Japan, these have been most recently extended until the end of May in numerous parts of the country. This is further complicated by the upcoming Olympics and the inability to host foreigner visitors to the market. Olympic-sized problems surround this event in terms of not just the general logistics of hosting the Games, which were supposed to be a shining moment for this proud country, but also the public sentiment that is growing against hosting the games. A recent online petition had hundreds of thousands of signatures calling for the cancellation of the event, with at least nine of Japan’s 47 prefectural governors concurring with the petition. These issues further cloud Japan’s recovery in general terms and with regard to the hospitality industry, especially on the tourism goals established by the government.

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Betting on Brazil – The opportunities are plentiful but challenges lie ahead

Betting on Brazil

Latin America continues to present itself as one of the greatest opportunities for gaming expansion. While it is home to a number of existing markets, there continue to be more opportunities for existing and new market players as expansion and reform take place in the Southern Hemisphere.

One of the greatest opportunities in Latin America remains in Brazil, due to its size, scope and potential offerings from both and expansion and reform perspective. However, the market still has its challenges as it considers next steps for lottery, sports betting, integrated resorts, and other potential forms of gaming.

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Windy City Gaming: Chicago will finally plant its flag for a casino development

Casinos in urban environments, not always the norm, have offered challenges in certain jurisdictions.

Major markets such as Philadelphia have had casinos near downtown for years. Pittsburgh and Detroit also feature casino gaming in downtown settings. The Washington, D.C. market, with MGM National Harbor, has also made an impact. But in recent years, more developers have embraced urban environments to meld properties into the fabric of the greater communities they serve. Two of the more recent examples were in Massachusetts, with MGM Springfield and Encore Boston Harbor.

Some of the greatest opportunities for gaming expansion in the United States remain in urban settings. For years, New York, Atlanta, Miami, Dallas and Houston have been seen as potential expansion sites. But the most immediate opportunity exists in Chicago, which will locate a gaming development within the city itself.

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2020 Trends: Latin America

The gaming market throughout Latin America continues to emerge. While gaming has been a strong form of entertainment, Latin America can be a mystery to some that have not followed it as closely. Like Asia, it remains one of the great opportunities for expansion in the industry on a wide scale, from sports betting to further development of brick-and-mortar facilities from Mexico to Brazil to Uruguay.

Many of these governments at all levels continue to face challenges as they had relied on gaming as a source of tax revenue prior to the Covid-19 pandemic as revenue is still rebounding. This has further put burdens on governments, as those employed in gaming have also struggled in 2020 with facilities operating under limited function post-shutdown and in some cases will remain closed until the end of 2020.

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2020 Trends: Japan

Like the rest of the world, the development of integrated resorts in Japan has been significantly stalled because of the Covid-19 pandemic. Japan is just beginning to reemerge as it is now starting to allow foreigners back into the country. While many speculated that 2020 would be a robust year for the integrated resorts, it looks like Covid, like the rest of the world, will push IRs back into 2021 as things finally start to move down the road.

Earlier this year, Japan transitioned from Prime Minister Shinzo Abe stepping down for health reasons to the current Prime Minister Yoshihide Suga. Suga, who was Abe’s top lieutenant, has been a strong proponent of the integrated resorts initiative. His ascendancy was the ideal outcome in terms of the succession from Abe. Suga will not be a caretaker prime minister and wants to leave his own stamp over the next year coming into a fresh election next September.

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