The war on Dotty’s; Ultimatum in Macao

In the wake of the Dotty’s brouhaha, I find myself wondering how this got to be such a big issue. After all, Nevada Restaurant Services had been buying up defunct bars and store fronts by the score and converting them to Dotty’s with no interference from the Nevada Gaming Control Board or the Nevada Gaming Commission. Only the solons at the Clark County Commission seemed to find Dotty’s a threat to the common good. As Las Vegas Review-Journal columnist Steve Sebelius put it …

It’s really too bad for the Clark County Commission that they simply couldn’t pass an ordinance that says, “All Dotty’s must close immediately!”

Sebelius also revealed that Station Casinos tried to buy Dotty’s in 2013 and was rebuffed. Had its offer been accepted, Station would be talking out of the other side of its face today, arguing the gambling was “incidental” to Station’s business model. So it decided, if you can’t join ’em, beat em. Anyway, it goes without saying that, had Station been successful in taking over Dotty’s (giving it a near-stranglehold on locals gambling in the valley), we wouldn’t be hearing a peep from Steve Sisolak or anyone else about how the business model constitutes unfair competition. Selective outrage is a wonderful thing, isn’t it?

* “The status quo is a lost opportunity. California could receive significant revenue for merely regulating and legitimizing an industry that Californians already participate in but send their dollars overseas.”With those words, Assemblyman Mike Gatto symbolically fired the starting gun for debate about bringing Internet poker to California. He still has to get reconcile tribal opposition to a PokerStars/Morongo Band of Mission Indians alliance (or vice versa), but the Morongo/PokerStars pact has picked up some allies of its own.

Gatto is building on legislation introduced last session but adding some tweaks of his own. For instance, you’d have to make your first deposit in person. Ditto really big withdrawals (think $10,000 or more). The bill must be routed through the Assembly Committee on Appropriations and, as luck would have it, Gatto is the new chairman of said committee. Interviewed by Poker News, he said, “we have a proposal that can unite all the various groups that were not previously united. We have a lot of the same language from last year, but what I think makes our bill special is a regime for weeding out money laundering, guaranteeing foot traffic to casinos and expanding the number of parties who will be able to participate in the marketplace.”

Whenever gaming revenues are discussed, California is always mentioned as the big enchilada. Until California is dealt in, the argument runs, we won’t know if Internet gambling is going to succeed in the United States or not, especially with players the size of PokerStars on the sidelines. After all, its population is four times that of New Jersey. Unfortunately for Gatto, the Pala tribe has backhanded his bill as “a rehash of previously unsuccessful proposals.” It doesn’t look there’s going to be anything easy to this process.

* Casino revenue is down again in Macao and that’s just fine with the central government in Peking. As stated by Macao Basic Law Committee Chairman Li Fei, “The overwhelming dominance of gambling in Macau is not in line with the overall interest of Macao.” “The business model looks near broken,” added Standard Chartered analyst Philip Tulk, what with junket operators who used to collect markers within 30 days now having to wait as much as a year.

The government is arguing against its own best interest, as it relies on gambling for 80% of its tax base. Secretary of Economy & Finance Lionel Leong is talking up economic diversification and more small businesses, but it’s not like he has much alternative in the matter, what with China tightening credit policies and cracking down on lavish spending by public officials. Fei challenged the Macanese government to improve its housing policies and make better use of real estate on Hengqin Island. “The nation and the mainland provide Macao with many opportunities,” he said, sounding like a man laying down an ultimatum.