Caesars Entertainment’s shareholders are apparently not on board with a recent proposal to study the effects of smoke-free casinos. While activists continue to fervently promote the idea of smoke-free casinos, citing health-related concerns, gambling companies and their investors remain obstinate in maintaining the status quo.

The proposal was filed by public health and labor advocates from the Americans for Nonsmokers’ Rights Foundation and healthcare provider Trinity Health. The aforementioned organizations suggested that implementing a non-smoking policy across Caesars’ 52 properties in the United States could help the company save up money.

However, approximately 80% of Caesars’ shareholders voted against the proposal, following Caesars’ claim that change isn’t needed. For context, the casino operator described its smoking policy as a “complex business decision” and added that it currently complies with local regulations.

Caesars further explained that it doesn’t believe compiling a report on the effects of smoke-free casinos wouldn’t be an “effective use of company resources.”

Smoke-Free Activists Are Encouraged to Continue the Fight

While the proposal was rejected, its proponents said that they were encouraged by the support it received and plan to bring it back in 2025. For context, almost 19% of Caesars’ shareholders voted in favor of the support, sparking hope about the future of smoke-free casinos.

Paula Larson-Schusster, president of United Auto Workers Local 3555 and dealer at Caesars’ Flamingo casino hotel in Vegas, said that the support represents a “forward move.” She added that companies will not be convinced to go smoke-free easily but added that the proposal was but the first step in raising awareness on the matter.

Larson-Schusster was firm that a smoke-free policy would not hurt casino companies’ product but would actually make it more valuable.

Indoor smoking continues to be one of the hot topics of the American casino industry. Many states exempt casinos from the indoor smoking ban, allowing them to dedicate a portion of their gaming area as a smoking zone.

However, proponents of banning smoking at casinos argue that this exposes casino workers to high levels of unhealthy smoke and can potentially lead to health complications.

While casino companies fear that going smoke-free could deal a blow to their profits, supporters of this change point out that there are already casinos that prohibit smoking without seeing a decline in profits.

The multi-front war on smoking also continues in states such as Pennsylvania where CEASE and UAW recently asked lawmakers to end the loophole that allows casinos to offer indoor smoking.

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PointsBet will return millions to its shareholders following the sale of its US business to Fanatics Betting and Gaming. This was confirmed during the company’s latest extraordinary general meeting.

PointsBet agreed to divest its US assets on June 30, selling its American operations of $225 million. The transaction is intended to take place over a multi-stage completion process and is still subject to regulatory approvals and customary conditions. If the deal is approved, PointsBet will receive $175 million at the initial completion and another $50 million at the subsequent completion. 

Following the sale of its US business, PointsBet plans to distribute the net proceeds to its shareholders, along with the majority of the company’s corporate cash reserves. PointsBet explained that the sale of its US assets would change its business, resulting in a surplus of reserves, thus enabling the move.

Following the sale of the US Business, the funding requirements of the Company’s remaining assets will be fundamentally different to the status quo.

PointsBet statement

According to PointsBet, the first capital return will see around $203.6 million (converted to USD from AUD) returned to the shareholders following the initial completion (expected to be completed by mid-September).

After that, a second capital return of between $80.8 million and $92.4 million will see money returned to the shareholders upon the subsequent completion (around March 2024).

The Deal Between Fanatics and PointsBet Was Mutually-Beneficial

In other news, PointsBet published its FY 2023 results, demonstrating a turnover of AUD 5.74 billion. The company attributed its stellar performance to the divestment of its US assets, which allowed it to focus on other lucrative initiatives.

Fanatics, on the other hand, will now be in the perfect position to challenge some of the mainstays of the US gambling market, including juggernauts such as FanDuel and DraftKings. Analysts believe that the acquisition will help Fanatics capitalize on the upcoming NFL season.

In the meantime, the transaction between PointsBet and Fanatics will also provide the latter company with a unique shot at New York’s gambling market. By acquiring PointsBet’s US business, Fanatics also hopes to secure an entry into one of the most promising US markets.

While regulators agreed that the company’s suitability to hold PointsBet’s NY license must be evaluated, the move is nevertheless a big opportunity for Fanatics to grow its US footprint.

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PointsBet announced that an overwhelming majority of its shareholders supported the sale of its US-facing business to the well-known sports merchandise company, Fanatics. Fanatics Betting and Gaming, the company’s sports retail division, filed a proposal for the takeover of PointsBet’s US assets in a deal for some $225.0 million, a significant increase from its initial proposal.

In light of the fresh proposal, some 98% of PointsBet’s shareholders showed approval for the sale of the company’s US business arm. The announcement comes at a time when PointsBet faced difficulties while trying to expand in the competitive US sports betting market.

It was back in 2021 when PointsBet started its US expansion. Brett Paton, PointsBet’s chairman, who was recently cited by The Sydney Morning Herald, spoke about the frustration of the shareholders over the share price of the company since the start of its US-facing expansion and the costs associated with that venture. “Let me say on behalf of your board that we understand your disappointment about the share price performance of our company,” he said, explaining that he and PointsBet’s chief, Sam Swanell, understand their frustration and concern.

“Continuing to operate the US business would require significant capital and further capital raises.“

Brett Paton, chairman at PointsBet

On the other hand, Paton spoke about the ongoing high costs required to continue the US business operation. Speaking about the sale of US assets to Fanatics he pointed out that the “transaction addresses that uncertainty.”

While the aforementioned transaction will offload PointsBet’s US business, the company will remain in control of its Australian and Canadian businesses. Additionally, it will continue to leverage its leading iGaming and sports betting technology that is used within regulated gambling markets in Australia, as well as North America, providing further growth opportunities.

Fanatics Wins a Tough Fight for PointsBet’s US Business

It was last month when Fanatics and PointsBet agreed on a $150 million deal for the latter’s US business. At the time, Fanatics agreed to pay $100 million upon closing of the agreement as well as $50 million in February next year.

But what was thought to be a done deal had an unexpected turn, after the US gaming and betting giant, DraftKings, tabled a new proposal of $195 million for PointsBet’s US-facing business, surpassing the initial $150 million offer by Fanatics.

However, Fanatics wasn’t going to let this happen and responded with an increased bid of $225 million, which was ultimately the successful one. In light of the new bid, DraftKings confirmed earlier this week that it will no longer pursue options for obtaining the US-facing business of PointsBet.

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