As part of a new gaming compact for the Western New York tribe, the Seneca Nation of Indians and the state government are negotiating for a casino in downtown Rochester. 

Seneca Nation has three casinos in the Buffalo area but views Rochester and Monroe County as an opportunity for expansion. If a new agreement is finalised, the tribe may forge ahead with those plans.

The current gaming compact, which was signed in 2002, is set to expire at the end of the year, and Governor Kathy Hochul’s office is awaiting the approval of a law before it can enter into a new 20-year compact. The bill passed the Senate but has not been approved in the Assembly amid concerns from Rochester leaders and neighbouring gambling facilities about the impact of a new casino in the city. 

READ: New York casino contenders ramp up license lobbying

However, ahead of the passage of the bill, the tribe announced last Wednesday that it had reached a preliminary agreement with Hochul’s office on a new compact. Local leaders are, however, shocked by the news of private talks between the Seneca Nation and the state government for a new casino in Rochester. 

On Monday, the Rochester City Council penned a letter to Hochul asking “our Governor, along with both houses of the New York State Legislature, to halt any conversation about a downtown Rochester casino”. The City Council said that “local leaders and citizens have not been consulted or even informed that this (discussion for a casino in Rochester) was under consideration”.

The Rochester Mayor, Malik Evans, in a statement said, “It should be noted that neither City leadership nor members of our New York State delegation has been involved in any conversations related to this possibility. Any conversation of this magnitude that does not include local stakeholders is unacceptable.”

Similarly, the Mayor of Monroe, Adam Bello, said, “It’s deeply troubling that this community has now been placed in this position of debating an issue without knowing the full details of what has been negotiated.”

Meanwhile, Governor Hochul has recused herself due to a potential conflict of interest, as her husband holds an executive position at Delaware North, the Buffalo-based hospitality company that owns Finger Lakes Gaming and Racetrack in nearby Farmington, Ontario County.

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888 Holdings’ FY22 results and Q1 2023 trading update showed strong performance in key verticals, but UK and Middle East compliance issues dampened performance in these jurisdictions. The William Hill acquisition was a significant investment that had a transformative effect on the group, substantially improving its 2023 prospects. Overall, 888’s leadership stood by its earlier estimates, projecting impressive growth by 2025.

Focusing on Growth Had Its Price

The global online gaming and entertainment company had a turbulent year, relentlessly pursuing growth opportunities at the cost of short-term profitability. The group’s yearly financial results reflected this approach as Adjusted EBITDA rose to £217.9 million ($272.52 million) for an 82% year-on-year improvement. Revenue likewise soared 74% compared to 2021, reaching £1.2 billion ($1.5 billion).

888’s acquisition of William Hill significantly impacted the company’s financials, contributing substantially to overall revenue. However, the purchase significantly impacted the group’s yearly earnings and was one of the primary factors behind the FY22 net loss of £120 million. Lord Mendelsohn remained confident the acquisition would pay significant future dividends.

The combination with William Hill… brought together two exceptional and complementary businesses to create one of the world’s leading betting and gaming businesses.

Lord Mendelsohn, 888 executive chair

The group’s expansion-minded strategy contributed to its rising debt, which reached £1.8 billion ($2.25 billion). The William Hill regulatory issues in the UK and compliance troubles in the Middle East posed further challenges, dampening growth in key jurisdictions. Rising inflation and ongoing global financial pressures meant that pro forma revenue actually decreased by 3% year-on-year to 1.85 billion ($2.31 billion).

888 Is in a Perfect Position to Capitalize on Its Investments

888’s leadership remarked that the FY22 financials matched their expectations, and their 2023 and 2025 estimates remained predominantly unchanged. Although the projected revenue will slightly decrease the following year, the group’s focus on sustainable revenue streams should bolster EBITDA and ensure lasting success. 888 remained confident that revenues could reach £2 billion by 2025, thanks to newly created synergies.

Our clear priorities of integration, market focus, and deleveraging give us confidence in our 2025 targets as we build a stronger and more sustainable business.

Lord Mendelsohn, 888 executive chair

A five-priority strategy outlined 888’s planned approach. The group will focus on fully integrating newly acquired businesses, developing profitable markets, and capitalizing on growth opportunities. 888 will also double down on maintaining its competitive advantage, investing in sustainable growth and steadily reducing adjusted net debt to EBITDA to below 3.5x.

Overall, 888 finds itself in a pivotal position where it needs to capitalize on its prior investments, consolidating its revenue streams. The company’s ability to adapt to changing market conditions will be instrumental in the coming years as the industry continues to evolve. 888 is well-positioned to remain a market leader, provided it follows through on its plans and can deal with rising challenges.

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Atlantic City’s casino industry has reported an increase in net revenue of 1% for the fourth quarter of 2022, compared to the same period in the previous year. The gross operating profit, however, showed a decrease of 31.6% for the same quarter. 

Gross Operating Profit of Atlantic City Casino Industry Declines in Q4 2022

The licensees’ reports showed that in the 4th quarter of 2022 net revenue reached $771.9 million, while the gross operating profit reached $119.3 million. For the entire year of 2022, net revenue increased by 9.3% to $3.3 billion in comparison to the same period in 2021. 

In contrast, the casino licensees reported a gross operating profit of $731.3 million, which was a decrease of 4.6% compared to the same period last year. 

Hotel occupancy rates for the industry’s casino hotels were also reported. The occupancy rate for the quarter ending December 31, 2022, was 65.8%, down 0.6% from the previous year. For the twelve months ending December 31, 2022, the occupancy rate was 73.4%, which was an increase of 5.8% from the previous year.

The decrease in occupancy rates may have contributed to the decrease in gross operating profit, but the industry’s overall performance is still strong. The Atlantic City casino industry continues to be a significant contributor to the city’s economy and remains a popular destination for tourists.

Hard Rock and Ocean Lead Atlantic City’s Casino Profit Growth in 2022

In 2022, only two of the nine Atlantic City casinos witnessed an increase in operating profits as compared to the previous year. Hard Rock observed a growth of nearly 20%, earning over $128 million, while Ocean earned $96.2 million, which is up 5.5%.

Bally’s operating loss declined significantly in 2022, with a loss of $1.8 million in comparison to $13.1 million in 2021.

Borgata’s operating profit decreased by 19.4%, earning $140.2 million. Caesars earned $60.4 million, down 2.7%, and Golden Nugget’s profits slightly decreased to $30.6 million. Harrah’s profits decreased by over 10%, earning $89.3 million. Resorts earnings were down by nearly 24%, at $21 million, and Tropicana’s earnings decreased by 7.6%, earning nearly $110 million.

In the category of internet-only companies, Caesars Interactive Entertainment NJ recorded a substantial increase in earnings, raking in $32.7 million, almost double the amount it made a year prior. Meanwhile, Resorts Digital, which serves as the online extension of Resorts Casino, generated $15.4 million in earnings, representing a 2.8% increase.

Looking back to the pre-pandemic year of 2019, only four casinos managed to increase their earnings in 2022: Hard Rock, Ocean, Resorts, and Tropicana. Although it’s worth noting that Harrah’s came very close to matching its 2019 earnings.

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