Government Law & Policies

Regulatory uncertainty continues to cloud prospects

In late February, gaming industry stakeholders converged in Goa at one of India’s first gaming specific conferences: Sports Betting & Gaming India (SBGI). The event, led by Eventus International at the Park Hyatt Goa Resort and Spa, was well attended considering the gaming market is largely in its infancy.

Over 150 attendees discussed several India-specific topics, including the market’s value and potential from an online, lottery, sports betting, and land-based perspective, as well as the regulatory and legislative hurdles involved to expand the market. These types of events have become a necessary first step for stakeholders to understand an emerging market’s value and provide guidelines on how to participate.

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Research Brief: The 2016 US Election

The United States’ Election Day is upon us and by this time tomorrow the U.S. will know who has won one of the most divisive races in the nation’s history. As world awaits the results of the election, GMA has provided the following snapshot of some key items the gaming and hospitality industry should watch for as the evening unfolds.

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History and Current Status of Gaming in Taiwan: A White Paper

Taiwan has long been a venue of interest among foreign casino investors, originally because of the importance of Taiwan as a source of customers and more recently because of the potential to reach Chinese customers through the ever-increasing transportation and tourism links between Taiwan and China. The effort to bring casino gaming to Taiwan, however, has been a journey of stops and starts over the past 25-plus years, though there has been fairly steady progress since 2009.

In 2009, the Taiwanese island of Penghu held a public referendum on the establishment of casino-based tourist zones. The referendum was the culmination of nearly twenty years of advocacy on the part of politicians, gaming companies, university professors and professional advisors. The referendum failed. However, in 2012, Matsu held a referendum that passed. While the success of Matsu’s referendum was supposed to politically incentivize the Taiwanese government to pass gaming legislation regulating casino operations, and the government did retain a law firm to draft the Tourism Casino Administration Act (the “Act”), the Act has been stalled in Taiwan’s legislature since 2013.

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Asia’s Sleeping Tiger

Since the emergence of Macau and Singapore as two of the world’s largest gaming markets, casino developers have looked at other jurisdictions within Asia for the next great opportunity. Japan, South Korea, Vietnam, the Primorye region of Eastern Russia, the Philippines and Cambodia have all generated varying amounts of interest from international casino developers. Japan, with its large and prosperous population, now appears to be out of play, at least for the foreseeable future.

The remaining countries’ nascent casino industries are all highly dependent on gamers from China and, as has been clearly demonstrated over the past two years, gaming revenue from Chinese. As such, the next great Asian casino development opportunity remains elusive.

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Strategies to Grow International Tourism into Las Vegas and Stimulate Economic Activity

Few would argue that sustained growth in air passenger volume into Las Vegas is a critical factor in the health and vibrancy of the Southern Nevada tourism industry. While McCarran International Airport (“LAS”) continues to enjoy steady growth in domestic passenger volume, growth in international traffic has experienced a far higher rate in the last five years, fueled by the opening of the new international terminal and marketing initiatives by the Clark County Department of Aviation. International visitation grew from 14% of total visitor volume in 2009 to 20% in 2013.1 International tourism continues to represent the greatest opportunity for new market growth, particularly visitors from Asian countries.

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Casinos and the City – A White Paper

Casinos and the places where they can be found have increased dramatically over the last twenty five years. Where at one time there were only a few places on the planet where one could go to participate in legal gambling activities, today casinos are a fairly common enterprise. In the United States alone, there are over 900 commercial and Indian gaming establishments. Casinos can be found not only in North America but also throughout Europe, Central and South America, Oceana and Asia.

Since the passage of the Casino Control Act in 1976, legalizing casino gaming in Atlantic City, NJ, casinos have been narrowly viewed as a tool for urban redevelopment, providing tax revenues to state and local governments and jobs to its citizens. Their success in providing those benefits cannot be disputed. Collectively, the casinos in Atlantic City, the riverboat and barge casinos in the Midwest and southeast United States, Indian casinos, and the land-based commercial casinos in a number of US cities as well as those on the Macau Peninsula and Singapore have contributed billions of dollars to government coffers and created hundreds of thousands of jobs. However, their success as a tool for stimulating commercial activity within the neighborhoods that they are located in has produced less dramatic results.

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New Kid in Town: Can Vietnam emerge as an international gaming-resort destination?

Despite the recent downturn in gaming revenue in Macau, Asia remains the region of the world with the greatest opportunities for casino development. While Japan and Taiwan remain the most enticing markets, if only enabling legislation were to be passed, other markets are attracting the interest of casino developers. Unfortunately, most of those opportunities are in markets that are loosely regulated, difficult to get to, surrounded by poor infrastructure or require border crossings that can best be described as challenging.

One market that continues to interest investors is Vietnam. With 92 million citizens, a burgeoning middle class, good airport infrastructure and airlift to a number of nearby countries, Vietnam appears poised to emerge as a regional gaming market that is capable of producing a prodigious amount of gaming revenue. Nevertheless, a number of issues must be resolved before the country can live up to its potential.

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Killing the Gaming Experience

Regional U.S. gaming markets continue to see month-over-month declines in gaming revenues. Analysts tend to blame the weather, the economy, market saturation, increased competition in neighboring states, and of course, Obama for this decline.

What has yet to be cited is that the gaming entertainment experience has fundamentally changed over the past few years, and many casinos no longer deliver the experiences that players have been used to historically.

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So, Have You Been to Poipet?

When examining the major casino markets of Asia, Macau and Singapore most often come to mind. Most gaming executives are familiar with these markets, and their prodigious gaming revenue performance continues to attract the interest of the media and financial analysts.

The extraordinary performance of these markets has caused casino developers to look more closely at other regional Asia markets such as South Korea, Vietnam and Japan as they look for that next great opportunity.

What are often overlooked are other regional Asian markets that are already established yet are somewhat removed from major Asian cities. These gaming markets generate prodigious amounts of gaming revenue and serve as convenience-based gaming destinations to regional populations.

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Legislative Dynamite: State failures the exception to the rule

As state budget crises continue to sweep across the nation due to the effects of the Great Recession, more and more states are making foolhardy decisions in an attempt to plug part of a budget deficit that may benefit them in the short term but will ultimately hurt them in the long run. Many investors in the gaming world have historically been gun-shy of investing in many international destinations due to legislative risk, viewing the United States as a stable jurisdiction in which the future is predictable. However, events of recent years have shown this premise of legislative stability in the United States as false.

New Jersey, feeling the pressure to expand gaming outside of Atlantic City to help reduce its deficit, has an opportunity to do it the right way that will benefit all stakeholders. Hopefully, they follow sage advice and set the example to how to responsibly expand gaming while simultaneously benefiting companies that have invested billions in their state.

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