New York state lawmakers Sen. Joseph Addabbo and Assemblyman Gary Pretlow have submitted a bill, which aims to expedite the process of awarding casino licenses in the New York City area. 

New Bill Proposes Earlier Deadline for NYC Casino Licenses to Boost State Revenue

The proposal stipulates that all casino license bids must be submitted by July 31, 2024. The bill also requires the New York State Gaming Commission to approve three licenses by March 31, 2025. As a comparison, according to the current schedule, licenses have to be awarded by December 31, 2025. 

Addabbo and Pretlow submitted the new bill as they consider the current timetable inefficient, reported The New York Post. They further added that it is delaying economic benefits for the state and believe that speeding up the licensing can generate billions of dollars in additional revenue for the state.

Addabbo noted that the prolonged timeline is holding up about 5,000 jobs and that a streamlined process needs to be implemented. The bill’s goal is not to benefit particular bidders but to eradicate the inefficiencies in the current system.

Some industry sources think that the current system is advantageous for those of the bidders who are facing political and zoning challenges. 

For example, Mets owner Steve Cohen, who proposed a $8 billion casino near Citi Field in Queens, and the Related Companies, proposing a $12 billion casino and office tower complex in Manhattan’s Hudson Yards, are some of the projects that are dealing with such hurdles.

However, the accelerated timeline that Addabbo and Pretlow are proposing could benefit existing slot parlors like Resorts World at Aqueduct and MGM Empire City at Yonkers. To get a license, all these entities need to do is expand their facilities to include live card games.

New Legislation Proposes $500M Upfront Fee for NYC Casino Licenses

As per the new legislation proposal, every bidder that gets a license must pay an upfront license fee of at least $500 million. The bill also allows two years to resolve any legal or land-use issues.

However, there are some significant challenges. For example, Cohen’s project needs state legislative approval to redesignate parkland around Citi Field for commercial use. However, state Sen. Jessica Ramos, who represents the area, has not yet backed this approval.

Assemblyman Pretlow, whose district includes the Yonkers racino, has expressed his frustration over the slow pace of the process. He noted that New York state is potentially forfeiting $2 billion in revenue.

Gov. Kathy Hochul, who oversees the gaming commission, has stated that she will review all legislation, which has been passed by both houses but has not made any statement either in support or against the accelerated casino licensing process. 

In addition to Cohen’s and Related Companies’ bids, other proposed casino projects in New York City include developments by SL Green/Caesars/Roc Nation in Times Square, Bally’s in The Bronx, Silverstein Properties in Hell’s Kitchen, and the Thor Equity consortium along the Coney Island boardwalk.

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Tribal gaming leaders in Oklahoma, alongside their national counterparts, have called upon Gov. Kevin Stitt to support tribal-led sports betting initiatives. 

Tribal Chiefs Express Concerns Over Las Vegas Sands’ Dallas Mavericks Deal

The call for action was made during a recent webcast titled “The New Normal,” hosted by Victor Rocha, conference chairman of the Indian Gaming Association, and Jason Giles, executive director of the Indian Gaming Association. 

Matthew Morgan, chairman of the Oklahoma Indian Gaming Association, was interviewed during the webcast, where concerns were raised regarding the recent acquisition of the Dallas Mavericks NBA team by Miriam Adelson, widow of casino magnate Sheldon Adelson, and the subsequent move by the Las Vegas Sands Corp.

Adelson’s family, known for controlling the Las Vegas Sands Corp., has committed to purchasing the majority stake in the Dallas Mavericks for a reported $3.5 billion. This move has sparked apprehension within tribal circles as the Adelsons have been actively lobbying to legalize gambling in Texas. Mark Cuban, the current owner of the Mavericks, envisions a new arena with an integrated casino in an entertainment district. 

According to the terms of the deal with Adelson, Mark Cuban, who took ownership of the Mavericks in 2000, will retain a stake in ownership and continue to oversee basketball operations.

Oklahoma Tribal Chiefs Skeptical of Stitt’s Sports Betting Tax Rates

Gov. Stitt, a member of the Cherokee Nation, recently proposed a sports betting plan for Oklahoma. However, tribal leaders assert that the proposal, which includes a 15% tax rate on retail sports betting at tribal casinos and a 20% tax on mobile licenses with a $500,000 license fee, caught them off guard and lacks feasibility. Despite Stitt’s efforts to diversify the state’s revenue streams, stakeholders remain skeptical.

Jason Giles pointed out the inexplicable tax rates proposed by Stitt, emphasizing the robustness of the Oklahoma gambling industry and its potential for growth. Giles argued for a more forward-thinking approach, urging the state to move beyond dependence on the fluctuating oil market and consider economic diversification.

Highlighting the regional competition from neighboring states like Kansas and Arkansas, as well as potential future entrants like Missouri and Texas, Giles stressed the need for strategic planning. 

Morgan echoed these sentiments, underlining the importance of Oklahoma becoming a pioneer in sports betting before other states capitalize on the opportunity. In response to the economic concerns raised by Giles, Morgan expressed optimism about the resilience of Oklahoma’s gaming industry. He emphasized ongoing investments by tribal nations in casino properties, citing recent openings and renovations across the state.

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PENN Entertainment has posted a report on its financial performance in the first quarter of the year, highlighting a modest revenue increase and a substantial net income rise.

As reported by the company, its revenues for the period increased by 7% year-on-year to $1.67 billion in Q1, 2023. In addition to that, the company reported a net income of $514.4 million, alongside a net income margin of 30.7%. For comparison, in Q1, 2022, the company reported a net income of $51.6 million with a 3.3% margin.

Adjusted EBITDAR during the period was $478.2 million, representing a 3.3% YOY decline. Meanwhile, adjusted EBITDAR margins declined by 300 bps year-on-year to 28.6%.

Adjusted EBITDA, on the other hand, was $332.2 million, representing a 23.6% YOY decline.

VIP Activity Delivered Stable Results

In Q1, PENN Entertainment was able to launch online sports betting in both Massachusetts and Ohio, two of the USA’s freshest wagering markets.

In addition to that, the company said that it has successfully repurchased $50 million of common stock at an average price of $30.36, as outlined in its February 2022 Share Repurchase Authorization.

Most of the company’s revenues came from the spectacular performance of its retail vertical. VIP players and older demographics were instrumental in driving PENN revenues, the company pointed out.

The quarter also saw PENN complete its acquisition of Barstool Sports, which it now plans to grow.

In addition to running its business, PENN remains committed to various social responsibility initiatives, such as supporting its customers, black people, women and other mistreated demographics.

CEO Snowden Praised the Results

Jay Snowden, the company’s president and CEO, commented on the results, saying that he is pleased to report another robust quarterly performance despite the macroeconomic headwinds. He noted that the company has raised its 2023 revenue guidance and now expects between $6.37 billion and $6.81 billion. The EBITDAR guidance range remains unchanged at $1.875 billion – $2 billion.

Snowden added that the company’s retail business performed well but the EBITDAR margins were negatively impacted.

Growth in our older demographics and VIP play led to largely consistent performance across the majority of our retail properties. However, the regional shift in our gaming revenues year-over-year to higher-taxed jurisdictions, and to a lesser extent, the settlement of certain property litigation matters, negatively impacted retail EBITDAR margins by approximately 100 basis points.

Jay Snowden, president & CEO, PENN Entertainment

PENN added that its total liquidity at the end of the quarter was $2.3 billion, including $1.3 billion in cash and cash equivalents. Traditional net debt as of March 31, 2023, was $1.4 billion.

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Aktiebolaget Trav och Galopp (ATG), Sweden’s former horse racing monopoly, posted its Q1 financial results, highlighting a bumpy period for the company. The suboptimal results were attributed to the macroeconomic headwinds.

ATG’s net gaming revenue for the first three months of 2023 was SEK 1.19 billion (around $116 million). This figure represents a 5.9% year-on-year decrease, showing that the company’s business has been impacted by troubles.

The company’s total revenue for the period was SEK 1.37 billion (around $133 million), which translates to a decline of 6.1%. The company’s operating profit for the period, meanwhile, plummeted by 15.7% to $30.8 million.

Horse racing revenue made up 75% of the company’s total net gaming revenue in Sweden and 23% of the net gaming revenue in Denmark. At the same time, casino gaming was responsible for 54% of the company’s Danish revenue and only 9% of its revenue in Sweden.

In Q1 2023, ATG had to pay a gaming tax of $23.7 million, marking a 5.8% year-on-year increase. Its personnel expenses also increased to $13.5 million, an 11.2% YOY rise.

Skarplöth Blamed the Cost of Living Crisis and Inflation

The company’s chief executive officer, Hasse Lord Skarplöth, commented on ATG’s performance in Q1 2023. He noted that the company had to keep pushing against various economic headwinds, including the rising cost of living, inflation and high interest rates. These are the same reasons why the company’s FY 2022 experienced a slight decline.

According to Skarplöth, the company’s Q1 results mirror the overall economic situation. However, not everything is grim for the former monopoly as some of its products showed improvement in Q1 2023.

According to the CEO, the company’s sports betting and casino products recorded improvements of 10% and 20% respectively. However, net revenue from horse racing operations, which are the company’s primary focus, still experienced a decline. Luckily, ATG continues to maintain its market share, Skarplöth concluded.

ATG Was Fined Over AML and Self-exclusion Failings

The suboptimal financial results are not the only trouble ATG has been facing. Last year, the company got into trouble after the Spelinspektionen, Sweden’s gambling regulator, uncovered various AML failings.

As a result, the ex-monopoly was forced to pay a fine of $570,000 and received a formal warning from the regulator.

This fine followed an earlier rule violation where ATG’s self-exclusion scheme did not appear to certain players because of technical failings. This breach earned the operator a $188.4 fine.

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Despite the record momentum of the gaming industry, gaming executives are increasingly cautious about the industry’s future prospects, according to a report by the American Gaming Association (AGA) compiled in partnership with Fitch Ratings. 

Gaming Industry Executives Predict Flat Growth Ahead Despite Record Momentum

Two-thirds of respondents expect conditions to remain the same. The report found that gaming-related economic activity expanded at an annualized rate of 8.4% in the last three quarters, while the US economy grew by 2.9% over the last two quarters of 2022.

The data in the report suggested that annualized industry economic activity will decrease moderately over the next six months. The results showed that more executives expect a decrease in the pace of hiring new employees, revenue growth, and customer activity over the next three to six months than an increase. 

However, there was a brighter outlook for certain segments of their businesses, with more operators expecting capital investment and gaming units in operation to increase rather than decrease over the same period.

Gaming equipment manufacturers expressed significant optimism, with most expecting sales of gaming units for replacement use to increase and almost all expecting sales of units for new or expansion use to increase. 

Economic Uncertainty and Geopolitical Risk Among Top Concerns for Gaming Industry Executives

Among the top concerns for industry executives were interest rates and inflation, cited by 69% of respondents, and economic uncertainty, cited by 38%. Meanwhile, supply chain delays, which had been a top-five concern in the previous report, fell out of favor, with geopolitical risk taking their place.

Retention of talent remained a challenge for the industry, with competition for current employees cited as an area of concern.

AGA President and CEO Bill Miller said that gaming was well-positioned to weather any potential economic headwinds, but projections of slowing growth across the broader US economy had muted expectations for gaming in the medium term. 

The report, prepared biannually by Oxford Economics, provides a timely measure of recent industry growth and future expectations.

A total of 26 executives responded to the Q1 2023 survey, including those at the major international and domestic gaming companies, tribal gaming operators, single-unit casino operators, major gaming equipment suppliers, and major iGaming and sports betting operators. Another recent report by AGA highlighted that the US gaming industry is more diverse than the larger hospitality sector and the US workforce. The study revealed that 62% of gaming industry employees are minorities, with Asian employees representing a significant presence with 14%, double the national workforce.

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Intralot, an international gaming solutions and operations leader, has published its FY 2022 results, showing slight group revenue decrease. Despite the setbacks, the positive annual and quarterly EBITDA changes attested to the effect of the company’s strategy.

Intralot reported FY 2022 group revenue of $428.7 million (converted to USD), marking a 5.1% year-on-year decline. EBITDA, meanwhile, was $134.1 or 11.3% up from FY 2021. EBITDA was very strong in Q4, for example, increasing by 25.1% to $38million.

Intralot also reported annual operating cash flow of $105.1 million, which translates to a YOY decrease of 10.5%.

In spite of certain declines, the gaming specialist was able to wrap up 2022 with lower net debt than the one it had in 2021. For reference, the company owed $542.6 at the end of 2021 and $535.3 at the end of 2022.

Amid the ongoing economic hurdles, Intralot recorded a 3.9% increase in its operating expenses. The company attributed these results to the unfavorable foreign exchange movements.

CEO Kokkalis Praised His Company’s Robust Performance

While certain metrics were lower than in 2021, Sokratis P. Kokkalis, Intralot’s chair and CEO, praised the results, saying that they reflect the company’s robust performance and restructuring efforts. He also mentioned the successful completion of a $140.8 million share capital increase that attracted Standard General, a US-based fund, as a strategic investor. The money helped Intralot regain control of its US subsidiary.

In addition to that, Intralot was able to repay the US-issued 2025 PIK Toggle Notes thanks to a new $230 million term loan from a consortium of US banks and its own cash. Intralot also secured a new revolving credit facility of $50 million.

Kokkalis concluded that Intralot will continue pursuing growth in the United States and beyond.

In the light of our significantly improved position, we look forward to tapping new growth opportunities in the US and the rest of the world as one of the top gaming technology providers worldwide and working towards refinancing the 2024 Notes.

Sokratis P. Kokkalis, chair & CEO, Intralot

Intralot Is Wary of the Economic Headwinds

Intralot concluded that the current period is challenging as inflationary pressures and rising interest rates weigh on economic growth. These headwinds have a direct effect on Intralot Group and since analysts believe that banks will not ease their monetary policy before the end of 2023, the company prepares for a turbulent period.

Intralot concluded that its management is closely following the geopolitical and economic developments. The company is fully prepared to react and protect its operations if needed.

A few days ago, Intralot continued its NA expansion by signing a new deal with the British Columbia Lottery Corporation.

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The Great Canadian Casino Resort Toronto is expected to open its doors this summer. The announcement pleased many industry participants and punters were happy with the prospect. However, First Nation considered it part of a behavioral pattern that might threaten its economic health, as more gaming establishments in the area means a more fragmented market share distribution.

First Nation Says Original Agreements Are Disrespected

MSIFN’s Chief Kelly LaRocca said in an interview with CDC Gaming Reports that new casinos in the Greater Toronto Area (GTA) are eating away from the Great Blue Heron Casino (GBH) market share. GBH is owned by MSIFN and is operated by Great Canadian Entertainment. The operator is also running Woodbine Casino, which is the one being expanded later this summer.

Additionally, according to the interview with CDC Gaming, MSIFN puts this move in context by looking at how gambling expansion in the area leads to reduced market share for GBH. This, in turn, means that the revenue-share agreement that MSIFN and GBH have can hardly be observed in a climate of an expanding gaming scene, shrinking the MSIFN-owned casino’s positions.

Having GBH operated at the level of Great Canadian’s other operations is a cornerstone for the issues raised. The goal that MSIFN laid out for GBH was to have the facility updated, with non-gaming amenities being a special consideration. Furthermore, reopening the 2016 agreement is seen as a necessity at this point, and MSIFN is scheduled for mediation with the government in the summer.

The Great Canadian Casino Resort Toronto is – in essence – the expansion of an already existing casino – the Woodbine Casino. Chief LaRocca also listed leaving the Ajax casino open as a sign of continued behavioral trend for the government. The Pickering Casino Resort opened recently, which was also noted by MSIFN as a sign of continued disrespect towards the original agreements of the Natives.

GTA Casino Expansion Causes Controversies

Pickering Casino Resort cost the Great Canadian Group C$500 million (approximately $373 million) and is another instance of the group’s name coming up during the CDC Gaming interview. The gaming and hospitality group assumed GBH operations from the First Nation in 2016. It also operates the slots at Ajax and Woodbine casinos.

The entertainment resort scheduled for later this year is a $1 billion project, which synergizes well with the Woodbine Racetrack to which it’s adjacent. It also fits Great Canadian’s plans for offering the very best entertainment, hospitality and dining available in the area. The Ontario government and the crown corporation (OLG) is also thrilled about the opportunity and the new jobs this creates.

However, it seems that the upcoming Toronto casino resort might also be causing some additional headaches in dealing with the issues that Chief LaRocca raised in the interview. At any rate, Toronto’s gaming scene as a whole is evolving, and the Greater Toronto Area – it seems – is by no means an exception, so dealing with these problems is necessary but also par for the course.

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