In a truly doleful sign of the times, Philadelphia Live has reinstated metal detectors at its entrance. Also, in a nod to Covid-19, aka The Disease That Couldn’t Be Cured, it is handing out free face masks to patrons. Good on Cordish Gaming. So what is the struggling casino like these days? Our East Coast correspondent paid a visit. And things are improving, “It was the most crowded I’ve ever seen Philly Live.” The bar band also earned kudos. Plus there’s a gift promotion for August that, for a change, doesn’t require playing $500 (a nod to declining discretionary dollars?).
However, some of the marketing could use fine-tuning. To be eligible for the gift you have to play between 2 p.m. and 8 p.m. on Friday: “apparently their ‘marketing’ people don’t know that is the peak traffic time headed from Pennsylvania to New Jersey beaches for the weekend, and the main road to the Walt Whitman Bridge is across the street from the casino.”
In the end, Speaker of the House for Massachusetts Rep. Ron Mariano (D) was rewarded for his obstinacy regarding sports betting. State Senate President Karen Spilka (D) caved on collegiate-sports wagering, enabling a (literally) midnight compromise to pass the Bay State Lege. It heads for the desk of Gov. Charlie Baker (R), who is all but certain to sign it. Gaming analyst Brendan Bussmann was feeling particularly inspired, writing that solons “went into extra innings last night to get a compromise in about the 14th inning of the game. Putting it back in football terms, the ghost of [Doug] Flutie of Boston College fame came through at the end. The stalemate between the House and the Senate ended with a compromise that still does not make an ideal bill but as some will view it, a win is a win.” (We do!)
The components of the bill include a bifurcated tax rate: 15% on brick-and-mortar bets and 20% on OSB ones. Only federal excise tax deductions are permitted, so no write-offs for promotional expenses (not good for customers). Casinos get two online licenses and one retail one, while racetracks and OTBs qualify for one ‘skin’ and one brick-and-mortar license each. Then come seven “untethered” online license which the Massachusetts Gaming Commission will put out for bid. “Advertising standards to be determined by the Commission which may end up driving the current debate,” Bussmann noted. Collegiate sports wagering is a real tangle: Massachusetts teams can be bet upon provided that they’re playing out of state—unless the in-state game is part of a tournament. Confused already? Oh, and you can’t fund your wagering account with credit cards. If a camel is a horse designed by a committee then Massachusetts sports betting is definitely a dromedary … but far preferable to no wagering at all.
Bussmann takes a slightly different view: “While a win is a win, it does not mean that it is the best. After multiple years of debate, you would think that the structure would be better but consider what New York and New Hampshire have, it could be considered reasonable but far from a national model. The college provision alone provides proof of that. Since it is in the early hours of the bill passage in the fifth extension of time beyond the midnight deadline, operators have had little insight into the final compromise of the bill that arguably crossed the finish line on fumes. The Commission now has the task to implement this bill. No Commission has or will be in a better position to implement a structure in a meaningful way because they have been preparing for it for years.”
There’s a bipartisan political scandal a-brewing at hideous Two Kings Casino Resort in North Carolina. It seems that several well-connected figures were juiced into shares of casino win. They include John Clyburn, brother of powerful Rep. Jim Clyburn (D), who helped bring the Catawba Nation casino into fruition, and Michael Haley, husband of former South Carolina Gov. Nikki Haley (R). A third protagonist in the brouhaha is Democratic Party rainmaker Patti Solis Doyle. Putting Two Kings into motion benefited South Carolina political figures in that it brought them Catawba good will (and money, it turns out) plus they ability to say they’d kept casino gambling out of the Palmetto State by putting on 17 acres north of the border.
Clyburn, Haley and Doyle all have ties to slot vendor Kings Mountain Equipment Supply. And therein lies the sticking point, as the latter is cut in for 20% of casino profits. Under the Indian Gaming Regulatory Act, that makes it a “primary beneficiary,” which is a regulatory no-n0. This dubious deal has attracted the scrutiny of the National Indian Regulatory Commission, which is putting the brakes on Two Kings’ permanent casino. The news is surely being greeted warmly by the Eastern Band of Cherokee Indians. The Cherokee and Catawba have been sworn enemies literally for centuries and the Catawba’s incursion into the Cherokee casino monopoly has brought old animosities back to life.
Jottings: In three weeks of action in New York State, OSB operator Bally Bet is grossing (before taxes) $10K a week. Is it worth it? … It’s a good thing that Stanley Ho didn’t live to see the collapse of his casino empire. SJM Holdings lost $352 million across the first six months of 2022 (and July revenue was virtually nil). That’s a 26% decline on gross gaming revenue and a $150 million negative return on investment. Grand Lisboa eked out $90 million in the first two quarters but was high heavens above new Grand Lisboa Palace (pictured), which scraped together a mere $29 million during the same period. How much longer can SJM hang in there?
Buy SJM with both hands.