Hard Rock International has yet to put in a bid or announce plans to compete for one of three downstate New York casino licenses that were officially put up for the bidding process in early July this year.

However, at the East Coast Gaming Congress in Atlantic City that kicked off last Wednesday, the company’s Chairman, Jim Allen stated that while his company’s Boardwalk property in Atlantic City is one of the more profitable casinos there, he sees the three New York casinos as an existential threat to some of the smaller operations.

Downstate NY Customers Contribute Heavily to AC Revenues

Upstate New Jersey and downstate New York account for about a third of all casino revenue in the city. Allen said Thursday: “There’s no doubt <NYC casinos are> going to have an impact on this particular market.”

Casinos in Las Vegas and almost all outlying operations in Nevada have been posting record revenues since reopening after the pandemic dropoff, with at least 20 months of surpassing pre-pandemic revenue levels and setting records month after month, New Jersey has not fared so well.

While revenues are high at over $3 billion for the nine operating casinos, profits were only up 5.6% over March earnings last year. Inflation-induced increases to the operators’ bottom lines due to inflation are seen by observers and the operators themselves as the most likely culprit.

The least financially muscular operations are Caesars, Golden Nugget, and Resorts with operating profits ranging from $21 million to $60.40m. It’s too early to tell what Bally’s will pull down as it posted a $1.9m net loss thanks to extensive renovations on its property.

Mid-to-upper-tier properties include the reasonably healthy Ocean and Harrah’s with profits of just under $100m each.

MGM’s Borgata is the king of the hill taking down more than $140m, followed by Hard Rock which produced profits of $128m, followed by Tropicana with nearly $110m.

Hard Rock has had its eye on a possible casino outside of Atlantic City but that dream was quashed by voters in NJ several years ago. It opened a $500 million hotel in Manhattan last April but no casino is included. Last year, Allen spoke of a $2B casino to compete with other top-tier operators in New York but local media reports suggested earlier this year that the Seminole Tribe’s business ties in Russia could sully any bid for a NY casino license. A year ago, only a few months into the Ukraine war, the company was reportedly looking at three potential sites to set up operations if they were awarded one of the downstate licenses.

Most observers believe two of the three licenses will go to existing video lottery terminal “casino” operators in the state – Resorts World in Queens, and MGM’s Empire City Casino in Yonkers – leaving only one of the licenses up for serious bidding.

Allan Calls for a Change in Perception for AC

Allen spelled out his take on the business climate in AC factoring in competition from New York operators: “You have three or four <Atlantic City> casinos that are very strong and then I think there’s a question as to what happens in that next level down. Inevitably from a business standpoint, there is vulnerability. I don’t think that changes unless there are enhancements to the perception of Atlantic City.”

Several new non-gaming venues are open and in the works to improve the draw of footfalls and to brighten the image of AC as more than a gambling destination. The Showboat is now a hotel with a beachfront waterpark that is expected to open soon but no casino. The former gaming floor is now an arcade with over 600 cabinets and an indoor go-cart track. Miniature golf, a 40’ climbing wall, and a rollerblading course are also in the works.

The derelict former airport, Bader Field is planned to become a multi-use site after a nearly $3b planned investment. However, Atlantic City hit the skids nearly a decade ago and the city’s finances were taken over by the state so only state officials can actually approve the Bader Field development.

Source: Hard Rock Chairman Jim Allen: Atlantic City Threatened by New York Casinos, Casino.org, April 21, 2023

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The small Mediterranean island nation has long profited from its status as one of the world’s leading iGaming hubs but faces constant struggles with crime and corruption. In 2021, Malta was put on FATF’s greylist for systemic regulatory and enforcement failings, but a series of reforms managed to sway the financial watchdog. However, recent news indicates that the country’s woes are far from over.

Illegal Gambling Rings Launder Millions Each Year

A recent investigation connected to the 2017 murder of journalist Daphne Caruana Galizia uncovered an underground lottery ring that ostensibly accounted for an astonishing 30% of the total market share. The government managed to obtain the information thanks to the arrest of local criminal leader Melvin Theuma who shared extensive details about his organization in exchange for a presidential pardon.

Theuma’s input was instrumental in untangling the details behind the illegal lotto operation and its ties to the island’s construction and property markets. These businesses still operate primarily with cash, making them the perfect avenues to launder yearly lottery profits of up to €30 million. Despite the authorities’ efforts, the underground network allegedly maintains its presence across the island.

According to a detailed report by local news outlet MaltaToday, the parallel lotto operates parallel to the official national operator, using the same winning numbers. The underground organization offers tickets and substantial prizes, undercutting the legitimate lottery and using the accumulating gambling debts to undermine local communities.

Such Scandals Threaten Further International Sanctions

The rising controversy again draws attention to the Maltese authorities’ ability to enforce the law and crack down on organized crime. Despite Theuma’s cooperation, the underground lottery is ostensibly still alive and well. Perhaps the matter is not a priority compared to the country’s more pressing problems, but such public failings threaten to undermine what little goodwill the government has left.

2021’s FATF listing created a bureaucratic nightmare for companies dealing with financial services, banking, or gaming. The increased regulatory pressure disproportionately impacted smaller businesses and could have severely impacted the local economy if the government had not acted with alacrity. While updated laws and regulations are promising, the thriving underground lottery proves that enforcement is still sorely lacking.

Despite removing Malta from the greylist, the FATF maintains a watchful eye on the island nation. A return to past behaviors, lack of progress, or new regulatory failings can lead the country back into international trouble. The authorities and the public must work toward improvement across all levels of society to restore Malta’s damaged reputation and capitalize on its unique advantages.

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