Gaming

Batter Up! How media, sports teams, venues and leagues intersect with legal sports betting

It has been a little over four years since the United States Supreme Court heard Christie v. NCAA (now known as Murphy v. NCAA). Over that time, sports betting has made evolutionary strides in how states look to legalize and regulate the market, as well as how stakeholders continue to evaluate their options and assert themselves into the market. It continues to be a fast and furious ride as over 30 jurisdictions now have legal sports betting operations.

Looking toward the future, it is important to understand the evolution over the past three years in terms of additional stakeholders, various models for regulatory structures, and market access.  All of these have evolved significantly over the course of the last three years that have brought an end to Nevada’s exclusivity in the sports betting market, bringing a series of “record-breaking” months as jurisdictions continue to advance the legal marketplace and transition those gamers who have been participating in illegal books or are new to the market.

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Asian Recovery or More of the Same?

Heading into 2020, it looked as though the gaming world would continue on its track of expansion in Asia.  Macau was two years out from concession renewal. The Philippines was seeing strong growth in gaming and tourism.  Jurisdictions such as Cambodia, Vietnam and others were seeing strong growth in their existing facilities with new projects being announced along the way.

Yet, it was shortly after the start of that year that the world began to change, and change rapidly.  Macau initially shut down for two weeks, and the rest of the world soon followed with what still remains for many jurisdictions that are in Great Shutdown mode. Gaming revenue evaporated quickly. Timelines for expansion disintegrated. Concession renewals in Macau were put in limbo other than a two-year extension to put all of the concessionaires on the same timeline for renewals.  Heading into 2022, there are just as many uncertainties as portions of Asia finally began to reemerge rom nearly two years of lockdown.

 

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10 Trends for 2022 – Japan Crosses the First Finish Line

With the Olympics being a made-for-TV event, Japan was never able to achieve its tourism goal of reaching 40 million visitors in 2021. Looking back on 2021, the total foreign visitor volume may only amount to roughly 30,000. While border restrictions are starting to relax to a three-day quarantine, Japan has only seen 25,900 visitors through the end of October.

Japan has a new prime minister, Fumio Kishida, who recently just secured the hold that his party, the Liberal Democratic Party, has on the Lower House of the Diet that will ensure that IRs remain on track as the country begins to loosen its restrictions from the Great Shutdown.

Japan, which has one of the highest vaccination rates in the world, will need to have IRs become a catalyst as it looks to restore and build upon its pre-pandemic tourist volumes.  With the Olympics in the rearview, IRs remain the single biggest opportunity for tourism and further investment in the country.

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Nix the Economic Incentives – Gaming is a driver that does not require handouts

Any development project in any industry will have various levels of economic impact. This includes the number of jobs it will create, the investment that is brought into the project, and the economic spillover.  Whether developing a new project on a greenfield site or a brownfield site, or redeveloping a building or area within a community, any development around the globe will bring these economic impacts.

When major industries look toward developments, and when cities look to attract new sectors or build upon existing developments, state and local governments will put forward a series of tax incentives, grants or other tools to lure these businesses to cities.  These includes big businesses that typically bring hundreds of thousands of good-paying jobs in manufacturing, technology and other sectors along with some level of investment into a facility.

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Breaking Down the Adversarial Wall – Building the operator and regulator relationship through education and dialog

As the gaming industry continues to expand as a form of entertainment across the globe, operators and suppliers typically have three questions when they are looking at a brand-new jurisdiction or an expansion in an existing jurisdiction.  Those three questions are: what is the tax rate, what is the license fee, and who is the regulator?

On the flip side, legislators and regulators will seek input from prospective or existing operators as jurisdictions look to craft a new market, expand their market, or bring further innovation.  The balance between these interests can in some cases become awkward as operators look to effectively compete while also balancing the public policy goals of the market and allowing a strictly regulated market.

The crux of this is creating a healthy balance that allows effective regulation in the market, and not to be overly influenced by an operator or an outside stakeholder.  However, regulators must also allow ongoing, healthy dialogue and input into how a market needs to be crafted, how regulations may impede innovation, or how stakeholders can effectively operate in a market that allows the right amount of competition.

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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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