GAMBLINGCOMPLIANCE: Electronic Bingo Ruled Legal In Alabama’s Greene County

27TH JUN 2016 | WRITTEN BY: CHRIS SIEROTY

A circuit court judge in Alabama has ruled that Greene County’s bingo amendment protects electronic bingo games played in local casinos, specifically Greenetrack, a ruling the state attorney general has said he will appeal to the Alabama Supreme Court.

Judge Houston Brown also ordered the state to return 825 electronic bingo machines seized in a raid at Greenetrack on July 1, 2010.

Brown, who was appointed by the Alabama Supreme Court to hear the case, ruled that Greene County’s 2003 constitutional amendment legalizing bingo in the county was the only one that “defines both bingo and bingo equipment … and includes the term ‘electronic marking devices’ within the definition of bingo.”

“Based upon the great weight of evidence, which was largely undisputed by the state, the court finds that the games at issue were and are authorized by Amendment 743 (Greene County),” Brown wrote in his 24-page ruling.

Brown also wrote that expert testimony during the trial proved that the electronic bingo games in question met the bingo test laid out by the state Supreme Court in its 2009 Cornerstone ruling.

The decision issued Wednesday follows years of court cases involving the raid and the electronic bingo machines. Brown gave the state 30 days to return “all seized equipment and records” to Greenetrack.

Although the decision was a win for Greenetrack, the Alabama Supreme Court has consistently ruled that the electronic gambling machines are illegal under state law.

Attorney General Luther Strange said he will appeal the case to the Alabama Supreme Court.

“The Greene County Circuit Court’s decision in the Greenetrack case ignores the law as made crystal clear by the Alabama Supreme court as recently as March 31,” Strange said in a statement.

“As in the other illegal gambling cases, we will file a motion to stay the ruling and follow that with an appeal to the Alabama Supreme Court and abide by its final decision,” the state attorney general said.

Strange’s statement referenced the state Supreme Court’s ruling in March against VictoryLand in a forfeiture case that said the state acted within the law in conducting a raid on the casino’s electronic bingo hall.

The Alabama Supreme Court overturned an October ruling by Macon County Circuit Court Judge William Shashy, saying the judge was “fatally flawed” in his ruling that VictoryLand should be allowed to resume operations since other electronic bingo facilities are still in operation.

The 8-0 unanimous decision meant the state could destroy more than 1,200 electronic bingo machines it confiscated and keep more than $200,000 in cash it seized from VictoryLand.

VictoryLand owner Milton McGregor promised to reopen the bingo complex in early summer, but the complex is now hoping for an October launch. Currently, VictoryLand is open for simulcasts of greyhound and thoroughbred racing from racetracks across the U.S.

Meanwhile, Brown noted in his Greenetrack ruling that the state presented only a “lay expert” to counter the testimony of the gambling complex’s expert witnesses. The judge also wrote that when questioned, the state’s expert admitted that he would find the games illegal even if they met every standard in the Cornerstone ruling.

The Alabama Supreme Court issued the Cornerstone ruling on November 13, 2009, setting out six defining characteristics of the game of bingo as authorized by the state’s constitution.

The Cornerstone ruling requirements include games are played on cards, numbers be randomly drawn, players physically mark their cards, players play against each other and announce their wins.

Brown wrote that Greenetrack’s expert witnesses were able to prove that the games in question met each of those requirements, even if done so electronically.

Luther Winn Jr., CEO of Greenetrack, was unavailable for comment Friday. Greenetrack is located in Eutaw, Alabama, which is about 88 miles west of Birmingham.

Greenetrack is similar to VictoryLand in that it also offers simulcast of greyhound racing and thoroughbred horseracing from tracks across the county.

Besides bringing cases against VictoryLand and Greenetrack, Strange has also targeted daily fantasy sports (DFS), issuing cease and desist letters in April to FanDuel and DraftKings.

Both DFS companies immediately pulled out of Alabama.

FanDuel and DraftKings issued statements disagreeing with the attorney general’s decision to issue the letter after reviewing the state’s gambling statutes and determining that “paid daily fantasy sports constitutes illegal gambling.”

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GAMBLINGCOMPLIANCE: Academics Ponder Who Plays The Lottery In The U.S., And Why

17TH JUN 2016 | WRITTEN BY: CHRIS SIEROTY IN LAS VEGAS

State lotteries stand out in a crowded gaming industry for several reasons, but mostly it is because they are the most widespread form of gambling in the U.S., a panel of academics said during a major five-day conference held last week in Las Vegas.

It is also the only form of gambling in the U.S. that is a virtual government monopoly.

Currently, lotteries operate in 44 states and the District of Columbia. Those states without a lottery include Nevada, Alabama, Alaska, Hawaii, Mississippi and Utah.

The Oregon Lottery, for example, is a state-run monopoly using a network of 3,939 retailers also offering some 11,925 video lottery terminals (VLTs) state-wide.

The VLTs operate similar to slot machines and account for 71.5 percent of total sales in 2015. Last year,Oregon earned $1.2bn from the state lottery.

“VLTs make sense for states looking at revenues,” Jeff Dense, a professor of political science at Eastern Oregon University, told attendees at the University of Nevada-Las Vegas’ 16th International Conference on Gambling & Risk Taking during a panel discussion entitled “The State of State (Lotteries) in 2016: American Perspectives.”

Dense admitted the machines were popular with players, but warned that a lottery expanding to include VLTs may end up “cannibalizing some other games in your portfolio.”

“There is always going to be opposition to lottery gaming,” said Dense, who presented his research titled “State Lotteries, Commercial Casinos, and Public Finance: 2016 Update.”

“The balance comes during the downtime when states need the revenue.”

Oregon’s Lottery earned $128.18 per capita in 2015, compared with Rhode Island which ranked at the very top of the list with $356.52 per capita.

But overall, states with VLTs earned $178.51 per capita compared with non-VLT states at $48.66, according to 2014 figures compiled by Dense.

Dense noted that nine states operate VLTs including Louisiana, New York, and Oregon. In total, they generated $6.2bn in revenues last year.

The figures do not include video gaming terminals in Illinois, which are operated by private route operators and overseen by the state’s Gaming Board.

Jonathan D. Cohen, a professor with the Corcoran Department of History at the University of Virginia, took a slightly different look at lotteries during the same panel discussion.

Cohen attributed their popularity to the “decline of access of social mobility” in the U.S., even though the perception remains that a higher social standing can be achieved.

His lecture was titled “Get Rich Quick: State Lotteries and the New American Meritocracy.”

“Lotteries fill that void,” Cohen said. “Lotteries are the provider of social mobility where the economy used to for more and more people.”

Addressing the question as to why people play the lottery, Cohen said his research found that the “poor play for money” while the “rich play for fun.”

But, whether rich or poor, lottery players are an older demographic, according to further research.

Richard McGowan, a professor at Boston College and co-author of the presentation “The Lottery: The engine that Drives U.S. Gaming Revenue,” said his research found the average age of a person who plays the lottery is 54.

“Twenty percent of the players purchase 65 percent of the tickets,” McGowan said.

McGowan’s research also demonstrated so-called “Sin Tax” revenues for 2014 that showed revenues for alcohol at $6.5bn, tobacco $17.7bn, and $19.9bn for casinos and lottery.

“It’s the first year that casinos and gambling have earned more than tobacco revenue,” he said.

Women In Gaming

Elsewhere at the conference and in front of a sizable audience gathered in a ballroom, long-time Caesars Entertainment executive Jan Jones Blackhurst used a keynote address to highlight the lack of women in leadership roles in the gaming industry.

To get her point across, Jones Blackhurst, executive vice president of government relations and corporate responsibility with Caesars, showed an image that she said illustrated her argument.

It was more than a dozen headshots from the executive team of a gaming company, where all except one were men.

She said she was not “picking on” the company, adding it would be the “same picture of any executive team I happen to showcase.”

Jones Blackhurst said she was trying to point out that there were not enough women in leadership roles, not only in gaming but in business in general. She said that needs to change.

“Women vastly outnumber men in the pipeline that is higher education,” said Jones Blackhurst, a former two-term Las Vegas mayor. “For years, you’ve heard companies say, ‘Well there aren’t enough qualified women.’ The statistics now show that that is just entirely inaccurate.”

She said women earn significantly less — 79 cents — for every dollar their comparable male counterpart earns.

Jones Blackhurst also took aim Wednesday at state gaming regulators, saying only very few women have ever served on either the Nevada Gaming Commission or state Gaming Control Board.

Pat Mulroy, a former general manager with the Southern Nevada Water Authority, served for one year on the gaming commission before resigning in October to join the board at Wynn Resorts.

In 1983, Patti Becker began a two-year stint on the control board, during which she led the first successful prosecution of a slot-cheating ring. Michonne Ascuaga resigned from the commission in February, less than a year after Governor Brian Sandoval appointed her.

Ascuaga resigned after it was revealed in a court filing that the Sparks Casino in northern Nevada she managed for 16 years was under investigation over non-effective anti-money laundering programs. The casino eventually paid $1m to settle the case.

“Business is better, profits are better when you have equal representation of men and women,” Jones Blackhurst said.

The gambling and risk taking conference, which is held every three years, concluded last Friday. This year’s conference brought together some 600 academics, regulators and others from around the world to the Las Vegas Strip’s Mirage.

Attendees presented research and examined various gambling-related issues at the conference, which was presented by UNLV’s International Gaming Institute.

Editor’s Note: This is just one of several stories I filed for GamblingCompliance over the last week or so about the 16th International Conference on Gambling & Risk Taking in Las Vegas. More stories are available for subscribers at http://www.gamblingcompliance.com.

GAMBLINGCOMPLIANCE: Boyd Gets $900m For Its Stake In Borgata

1ST JUN 2016 | WRITTEN BY: CHRIS SIEROTY

Less than a week after investor Eric Green declared he would “not put any money into Atlantic City” knowing that northern New Jersey could get casinos, MGM Resorts International is doubling down on its investment in the Borgata casino.

MGM has agreed to acquire Boyd Gaming’s 50 percent stake in Marina District Development Holding Co., the parent company of Borgata Hotel Casino & Spa, for $900m.

Before Tuesday’s announcement, the gaming companies had been 50-50 partners in Borgata, one of Atlantic City’s most successful casinos.

As part of the deal, MGM will sell the entire property to MGM Growth Properties LLC (MGP), a real estate investment trust the Las Vegas-based company created earlier this year and went public in April, for $1.175bn and operate the Borgata, the companies said Tuesday in a statement.

Boyd expects to receive $600m in net proceeds after deducting its share of the property’s debt.

Borgata estimates it is entitled to tax refunds totaling $180m from the cash-strapped Atlantic City government.

“While we are pleased with the performance of this property, this transaction is an attractive opportunity to immediately unlock significant value for our shareholders,” said Keith Smith, president and CEO of Boyd, in a statement.

Smith said the Las Vegas-based gaming company would “use the proceeds to reduce debt.” The deal is expected to close in the third quarter.

The sale of Boyd’s 50 percent stake in Borgata is the company’s third transaction since the beginning of 2016. In April, Boyd spent $230m to acquire Cannery Casino Resorts’ two Las Vegas casinos, and in a separate deal, $380m to buy Aliante Casino in North Las Vegas.

Smith told analysts during an April 27 conference call that first-quarter net revenues at Borgata were $190.3m, an increase from $182.6m in the same period last year. The company attributed the increase to Borgata’s ability to capture new business since the closure of four of 12 Atlantic City casinos in 2014.

For the last 12 months ended March 31, Borgata reported $812m in revenues.

“Borgata is … a great addition to our growing presence in the Northeast,” said Jim Murren, chairman and CEO of MGM.

“While the market continues to experience challenges, Borgata has outperformed and differentiated itself as the undisputed leader in the city. Our decade-long partnership with Boyd Gaming has been a great one.”

MGM’s deal to buy out its long-time partner in the Borgata was announced less than a week after the 20th annual East Coast Gaming Congress in Atlantic City. During the two-day conference, a panel of Wall Street investors and analysts were mixed about Atlantic City’s future.

“I’m comfortable in Borgata and its ownership between Boyd and MGM,” Eric Green, senior managing partner with Penn Capital Management, said Thursday. “We see Atlantic City as a locals market. Borgata will be fine.”

Green told attendees of the panel discussion that he was “very nervous about putting new money into Atlantic City.”

Neither MGM nor Boyd on Tuesday would discuss the timing of the sale, which comes just a few months before a November referendum that could legalize casinos in northern New Jersey.

If approved by voters, two new gaming permits would be issued for planed casinos in separate counties at least 75 miles away from Atlantic City.

But analysts believe the economic impact on Atlantic City would be severe.

“Adding new competition will not be good for Atlantic City,” Green said. “Atlantic City has to do everything to change itself, no matter any other markets.”

Andrew Zarnett, managing director at Deutsche Bank Securities, said if Atlantic City were to lose another casino, Borgata would win a majority share of the business left behind.

MGP expects to fund its acquisition of the Borgata and its debt with a combination of cash and borrowing. After the deal closes, MGP will lease back the real property to a subsidiary of MGM, after which a subsidiary of MGM will operate the Borgata.

“We are excited to add Borgata to the MGP portfolio, further diversifying our geographic presence,” said James Stewart, CEO of MGP. “With this transaction, we are executing on our core growth strategy in prudently building a portfolio of high-quality assets with market leading competitive positions.”