Why is the Poarch Band of Creek Indians not included in this jihad? Because a federal court has ruled that they are immune to these public-nuisance suits. However, it may be a moot point. Under the Indian Gaming Regulatory Act, Native American tribes are entitled to whatever form of casino gambling is available elsewhere in their state. If the Class II gaming practiced at Victoryland, White Hall and Southern Star is ruled illegal, the Poarch Band would have little choice but to shutter its operations, although we’re sure they’d litigate like hell.
Officially throwing its hat into the William Hill ring, Caesars Entertainment has offered $3.7 billion for the sports-betting giant, a 57% premium to the stock price. The Standard reports that “advanced discussions” are underway about the purchase offer. Now we wait for Apollo Group to ante up for Hill, as it has already made its interest known. Against that prospect, Caesars’ offer contains a poison pill whereby an Apollo purchase would result in the expulsion of Hill from all Caesars casinos and racinos. CEO Tom Reeg has declared war to the knife. However, a wild card in this game could be Betfred, which has started gobbling up shares of William Hill. At the very minimum, it gets a nice profit on its buy-in if the Caesars offer is accepted. Also up for grabs in the bidding war are 1,570 William Hill betting shops in the U.K., at which Betfred has already made an unsuccessful run.
As for Caesars, how does the debt-encrusted company swing such a big deal? It issued 30 million shares yesterday, hoping investors will pony up enough (at $58/share) to underwrite a Hill acquisition. The offer, if successful, would give CZR 29% of the U.S. sports-betting market, with more jurisdictions expected to come on line soon. “As more US states legalize, more quickly than we expected, the prize is substantial,” said James Wheatcroft, gaming analyst for Jeffries. Caesars also intends to collateralize $2 billion of the purchase price with with debt pledged against William Hill’s overseas businesses. It further hinted at least a partial spinoff of non-U.S. Hill assets. The attraction, the company said, was “the ability to access our extensive and preexisting relationships with dozens of sports teams and events, including being the exclusive casino partner of the NFL.” As for U.S. asset sales, they are still pledged against repayment of existing debt—or are they? Caesars was ambiguous. It could raise as much as $2 billion, after a deal is struck, by unloading all overseas Hill assets, opined Roth Capital Partners gaming analyst David Bain. “Should the deal hold, after divestment of non-William Hill USA businesses by Caesars, we believe Caesars will have created roughly $10.4 billion of value, for consideration of roughly $1.7 billion,” he wrote. That’d be pretty sweet.
Should Norfolk voters approve a casino this November? Possibly not. While the Pamunkey Tribe isn’t backing off its commitment to a $500 million permanent casino, they’re going cheap and looking to cash in quickly by throwing up a tent in a parking lot and calling it a casino. Zoning rules don’t forbid it and it sure would be handy to the Amtrak station. (Good news for Amtrak fan Joe Biden.) The Pamunkey would still need to get conditional permission from the city but the latter seems inclined to play along. The tribe itself has sent mixed signals, telling Commissioner Kathryn Shelton that greenbacks would start flowing “immediately after November, because they were looking at putting a temporary facility like a tent at Harbor Park.” Then, in a backpedal, tribal representatives said they’d go the sprung-structure route if the city asked them to do it. That won’t happen as long as Kenny Anderson is mayor. “We have not discussed it, but I’m not that warm and fuzzy about some type of temporary facility,” he said. “If there was a tent or trailer, that doesn’t sit well with me.”
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You suggested that since the Alabama Supreme Court has ruled that the non-Indian casinos’ machines are illegal, the Alabama Attorney General will now go after the Indian Casinos. That case was previously decided. The Alabama Constitution allows Bingo. Both the Indian and non-Indian casinos use electronic bingo machines that look like regular slot machines (for customers’ fun) but actually are based on an electronic bingo game. The Indian casinos must conform to Federal guidance which allows them to have whatever is allowed by the state constitution. The Federal guidance recognizes that their machines are actually playing a Bingo game and Bingo is authorized by the Alabama Constitution so they are OK. The Alabama Supreme Court says “looks are everything” and if the machines look like slot machines then they are slot machines, even though they are proven to be based on a Bingo game, but their decision applies only to the non-Indian casinos. We have been through all this before, and now Alabama is shooting itself in the foot again. There are Federal standards for each type machine, but the Alabama Attorney General and the Alabama Supreme Court do not accept the Federal Standards, but their argument does not apply to the Indian casinos.