This Week in Gaming Review

The 2nd week of 2016 provided statistics that made operators in Pennsylvania and New Jersey nothing less than ecstatic.  Pennsylvania posted record numbers last year to $3.17 billion, topping the previous high of $3.16 billion set in 2012. This information was released by the PGCB on Friday.

 

The four casinos in the Philadelphia area had $1.19 billion in revenue, up 3.9 percent form $1.14 billion the year before. Slots revenue was up 2.8 percent locally, while table games revenue gained 6.6 percent. The 4 Philly casinos include Parx, SugarHouse, Harrahs and Valley Forge. These outstanding numbers are a prelude to the Philly Live project that is expected to start construction within the next 11 months.

New Jersey Online Gaming hit a new monthly revenue high in December and full-year revenue improved by more than 20 percent. The Atlantic City leaders in December were Borgata and Caesars Interactive.

Borgata

According to figures released Wednesday by the Division of Gaming Enforcement, state-licensed online operators reported revenue of $14m in December, 6% more than November reported 13.2 million and 30.8% higher than December 2014’s total. The online casino vertical rose 39% year-on-year to $12m, while poker revenue fell 3.6% to just under $2m. For the year as a whole, the state’s online revenue came to $148.8m, 21% higher than 2014. Total online casino revenue in 2015 came to $125m, up one-third from 2014, while poker revenue fell 18% to $23.8 million. This is confirms that online gaming is trending in the right direction.

 

Governor Brian Sandoval

Lastly, Gov. Brian Sandoval officially reconvened the Nevada Gaming Policy Committee to discuss skill-based games and daily fantasy sports, among other issues.

According to a statement from his office, Sandoval signed an executive order to reconvene the 12-member committee, which includes the governor, select members of the legislature, a tribal representative, members of the public and other appointees, including gaming regulators and licensees.

"The industry is constantly changing as more states and countries enter into this increasingly competitive field, and I believe the changes we are witnessing demand the attention of Nevada’s policy leaders," Sandoval says in the statement.

According to the statement, "The objective of the Committee is to gather input from various constituencies, including the public, on gaming policy issues, for possible future consideration by Nevada’s Gaming Control Board and Gaming Commission, as appropriate."

The committee meet no later than March 15 and deliver non-binding recommendations before October. I am curious to see which licensees will be on the committee. I'll report that information in a future post.  I want to note that the Associated Press was the source of the Nevada related news. It was condense to fit this post.

 

 

I was 2-2 last week during NFL wildcard weekend with the best bet losing. Texans + 8.5 in a teaser.

This week my best bet is #Seattle + 8.5 in a teaser. Enjoy the games.

 

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Online Gaming News in Pennsylvania

The past three weeks have been similar to  Fast and Furious 7 with all the activity involving online gaming. Pennsylvania has at least two additional bills that are related to internet gambling. One takes on the logistics involving registration and the exclusion of any holders of a Category 3 license. This would deny Valley Forge the opportunity to participate.

 

The new bills are also asking for a tax rate of 54%. This is  the same level that Pa. taxes slot play. This will not work in an online environment. New Jersey is making things work with a rate of 17.5%. That rate has the operators able to market the product and turn a profit. With the rate of 54%, there would not be internet gaming in New Jersey. Delaware taxes online slots at a rate of 43.6 percent and 29.4 percent for other games, including poker. The first $3.75 million per year has a 100 percent tax rate. They are not making any money.

Mark Lipparelli

Mark Lipparelli, Former Chairman of the Nevada Gaming Control Board, told a California House Committee that he felt the proper tax rate would be the high single digits and that any amount higher than the low teens would hurt the growth of regulated online gaming. Promotions are the drivers of internet wagering. They are limited when the profit margin is minimal. A rate of 12 to 15% is suitable. It could start at the low end and increase over a 4 year span.

 

I am sure that the compromise phase will come when the bills reach the floors of the House and Senate. Here are my three bullets of what can make this happen successfully and by 2016.

• Remove the registration at the property stipulation. That takes the convenience factor out of it. This also limits the operator to a locals only atmosphere.
• Set up the capacity for compacting agreements with any state that has online gaming. This would increase liquidity in Poker and Slots when tournaments are held. It would also drive more revenue to the participating states.
• Limit the amount of providers to casinos that are currently operating  in this state. They are stakeholders and would maintain the integrity of the online product. Allow at least one partner that is independent of the casino to buy into the platform of shared revenue, provided that partner can pass a review by the Pennsylvania Gaming Control Board. This would increase marketing efforts. 

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Online Gaming News from Pennsylvania

On Wednesday, the 1st of a series of meetings took place about the merits and concerns of online gaming in Pennsylvania. It was held at Harrah's Philadelphia by the Pennsylvania Gaming Oversight Committee. This committee is chaired by state Rep. John Payne, R-106, of Hershey. HB 649 was introduced in February by the state rep. It would empower the Pennsylvania Gaming Control Board to explore online gambling options and to create regulations for any games it approves.



Jan Jones and Ron Baumann testifying before Gaming Committee

The hearing was provided with testimony from Jan Jones Blackhurst, executive vice president of Caesars Entertainment Group. Blackhurst told the committee members that online gambling is already prevalent in Pennsylvania and the rest of the country, even though it isn’t legal. Blackhurst stated,“Today’s reality is that Internet gambling is taking place in all 50 states, almost all of it illegally. It’s an environment that’s ripe for fraud and criminal activity and it provides no tax revenue. However, the online gambling experience in the states where it is legal, has been successful from a regulatory perspective. Minors can't gamble, the vulnerable are protected and consumer protections against fraud are in place." Ron Baumann, general manager of Harrah's Philadelphia ,also testified about the allowing Pennsylvania Casinos to increase agility and speed to market. Bauman also express interest in gaming tax credits that would be used as capital investment incentives. This is consistent with West Virginia and New Jersey.

The I Gaming views of Blackhurst and Baumann were shared on part of the regulatory framework and strong consumer protections to:

• Prevent minors from playing, with robust age and ID checks
• Ensure players within borders with strong geo-location technology
• Tools to deal with problem gambling

In accordance with the report from Econsult for the Pennsylvania Budget and Finance Committee, the annual ongoing potential revenue would mean tax collections of approximately  $43 million applying a 14% tax. The industry is in support of a tax rate of 12%. I Gaming would take off quicker with the industry proposed rate. More promotions related to sign ups would increase the number of people that want to play. This would make Pennsylvania a more appealing place to play than Delaware or New Jersey. There are several additional meetings scheduled for April that will continue the conversation about I Gaming ,fantasy sports betting and gaming on mobile device.

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What works in 2015 Gaming - Part Two

I promised to give another key that will help grow the market in your gaming region. Since things are now communicated spontaneously, you must ask yourself is your organization doing that. Not just with your clientele but internally. How are you utilizing your e mail systems? Is everyone in the loop when special events and promotions are occurring? If marketing and/or food and beverage are aware, the front line personnel must be involved to serve as ambassadors. Even if they only have knowledge of the basics. The when, what, where of the event places the employees in a position that they can relay information to others.

This is successful

Because they know about it
 

The use of signage at the front desk and the entrants is important too. Don't leave out the restrooms either. There always someone going in or coming out. If you have the space, a communication board always works. Keep the employees aware of property updates and developments. Change the board daily so it stays fresh and gives the staff a reason to look at it.  Let them know when the home team is playing and what concert is coming to town. Some the attendees at those events may frequent your establishment and this information will serve as a conversation piece.

What's great about all of the things that I've suggested is they are cost effective. I'll give another

key to growing your market in a future post. I'll focus on your customer and share some innovation as to how to connect in real time.

 

Meanwhile, I provided a list of the top ten best places to work in Philly. The entire list can be found
at Philly.com.

1. Keller Williams Realty, Austin, TX

 

2. Whole Foods Market, Austin, TX

 

3. Health Partners Plans, Philadelphia, PA

 

4. Toll Brothers, Inc., Horsham, PA

 

5. PricewaterhouseCoopers LLP, New York, NY

 

6. Philadelphia Insurance Companies, Bala Cynwyd, PA

 

7. SugarHouse Casino, Philadelphia, PA

 

8. SAP Americas, Newtown Square, PA

 

9. The Vanguard Group, Malvern, PA

 

10. Harrah's Philadelphia Casino and Racetrack, Las Vegas, NV

 

Here are some of the top 10 best places to work in Las Vegas. Top Workplaces are not only better places to work but are more likely to be successful than peer organizations. This list was provided by the Las Vegas Review Journal. It includes Wynn Las Vegas ,The Venetian ,Host Las Vegas,

Caesar Entertainment Corporation and  Lexus of Las Vegas. If you're not on either list and your company is in competition within the same region as someone that is, you need to reassess your strategy. More keys soon. Below is the initial installment.

 

 http://thegamingguyproductions.blogspot.com/2014/12/what-works-in-2015-gaming.html
 

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Philly's 2nd Casino License: The Odds

The Pennsylvania Gaming Control Board is holding a meeting Tuesday in Philadelphia to decide about the 2nd gaming license. The 4 remaining applicants are awaiting this decision. The existing 4 operators are also concerned. Market conditions indicate that gaming revenue is not at a premium on the east coast. But the board has the final say in this.  So I decided to set  a betting line as to who the odds favor in this process.

 

Philly Live has an impressive track record(Maryland Live). Live has partnered with Parx Casino and both have strong numbers in their respective markets. Great location near stadiums. They will have a synergy with Xfinity Live. A existing hotel site in place. 2-1

 

Casino Revolution has a location near the stadiums and is accessible to major highways. I-95 and Delaware Avenue come to mind. They have plans to develop an amusement park that will cater to families. They state they can open faster than any other applicant (15 to 18 months). 3-1

Market Eight has the development of the center city Gallery area to draw on. Major stores that cater to millennials are part of this renaissance. This group has the most disposable income.  Easy access by public transportation. They are located near major hotels and the convention center. 4-1

 

The Provence has the most original design of the 4. They plan to have a international flavor to their casino. Note the name. They 'll have a spa and world class restaurants. This will appeal to the business clientele that surrounds them in the heart of center city. 4-1

The Board could also differ a decision until 2015 when Governor -elect Tom Wolf can weigh in. They are politically appointed and able to vote without responding to the influence from the governor's office. 7-1

The Gaming Board could also look at the state of gaming on the east coast and feel that the region is not ready for another casino. This would maintain the balance that currently exist. Each existing operator has it's own niche. Harrah's Philly has the Total Reward brand that works nationally. Parx and Valley Forge have the outlying areas of Philadelphia and the suburbs to draw from. SugarHouse Casino has the prime location and is approximately 10 minutes away from center city. 
                                   Odds of not granting a license to anyone. Even Money.

          You can't bet these propositions anywhere but you can talk about them everywhere.
                                              What do you think will happen?

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