It wouldn’t be a week in the gaming industry if Sheldon Adelson didn’t manage to bigfoot one issue or another. This time it’s Florida, where the Legislature is in the preliminary throes of grappling with casino expansion once again. Adelson surrogate Nick Iarossi suggested a one-casino monopoly for South Florida. (I can’t imagine who he has in mind for it.) He also proposed an East Coast-low 10% tax rate — a steep reduction from the 35% that the state’s parimutuels currently pay. It’s not a bad idea in theory, although Sunshine State solons are loath to leave money on the table. They’re more apt to fix upon what they’re giving up than what they’re gaining. It’s why they stalemated last year and are odds-on favorites to do so again.
S&G is a longtime advocate of low-tax jurisdictions but we’ve got to call bullshit on this bit of revisionist history purveyed by Iarossi: “The higher the tax the less you can spend on the facility. The less you spend on the facility the less iconic the structure is and the less people want to jump on an airplane or drive a long distance in a car to come see it.” Tell that to Macao, where Sands China pays 39% and just can’t stop building. (And for good reason.) Heck, a 55% slot machine tax didn’t stop Las Vegas Sands from blowing damn near a billion dollars on Sands Bethlehem. Maybe there is a new cost-consciousness at Sands HQ but company history has yet to show an instance where the tax rate sent it scurrying.
Meanwhile in Pennsylvania, Sands is taking the lead in urging harsher punishments for adolescents who sneak into casinos. I guess all those colored lights and clanging machines are too great a lure. Sands Bethlehem President Robert DeSalvio wants the penalty upped to a one-year revocation of drivers licenses. (Juveniles without licenses still face $1K fines, maximum.) Sands is particularly invested in this issue, having paid the state $220,000 for instances of underage gambling. It’s been even worse for Rivers Casino, out 246,000 clams in fines. At least the state’s small-resort casinos have a built-in safeguard, since casino access is restricted to registered guests.
The Keystone State has had 127 known instances of tots playing the slots. That’s nothing compared to Macao, where the casino floors have practically been overrun by underage players: It’s estimated that 20,000 under-21-year-olds try to infiltrate the enclave’s casino floors on a monthly basis. Part of the problem is the relatively paltry fines for offenders: $125 for the kid. Casinos aren’t heavily penalized either ($1,250-$6,250). As might be expected, the Macanese government did not disclose the number of kids who were caught after the fact. Like Pennsylvania and many other jurisdictions, Macao has a self-exclusion policy for pathological gamblers. The percentage who actually do so is expected to be revealed at year’s end.
Elsewhere on the isthmus, MGM Grand Paradise is turning six years old and it’s time for a makeover. While it was busy piling $31 million into MGM Cotai last quarter, MGM quietly spent $27 million to refresh its flagship property, part of an eventual $51 million in facelifts. The money is mostly being targeted for areas frequented by high-limit baccarat players, the lifeblood of any Macanese casino. Slot handle, however, had recently increased 10%, so the mass-market player is making tracks to MGM, too.
