With the controversial election of the United States 45th President, Donald J. Trump, questions have been raised about what will be the impact of this result on the local online gaming market. Observers anticipate that a Presidential administration led by Trump could potentially mean a nation-wide ban for online gaming.
Among the many sectors watching closely to what Trump as President of the US could mean for their business, is gaming, an industry in which the Republican leader has a long background. Despite there have been no official mention about this subject under his leadership, some professionals predict that online gaming in the US could be again under attack by opposition.
Gaming experts base their arguments on the fact that Sheldon Adelson, Las Vegas Sands CEO and a traditional opponent to online gaming in the US, would have donated US$25 million to support Trump’s campaign. In this sense, it is thought that in return Trump may have given Adelson assurances the topic would be addressed during his administration.
Rumours indicate that two of the most recent cabinet members considered for Trump have been Senator Tom Cotton and his former adversary, Senator Ted Cruz.
Cotton, reportedly to serve as US Defense Secretary, is a co-signer of the Restoration of America’s Wire Act (RAWA), the anti-online gaming legislation who introduced a similar bill in September. RAWA is the favoured legislation of Adelson, who maintains that his crusade to eliminate online gambling is a moral mission. Cruz, who is also being considered for a top position isn’t a supporter of online gaming either.
After the election results between Mr Trump and Mrs Clinton were finalised, Geoff Freeman, AGA President & CEO, commented that the “American Gaming Association (AGA) turns its attention to proactively engaging with the new Administration and incoming members of Congress.”
Currenty, only three states legally offer online gaming in the US, Delaware, New Jersey and Nevada, while legalization of it attempts this year in Pennsylvania and California.
November 18, 2016
November 11, 2016
The History of UK and Gambling
Gambling, in its many forms, is as quintessentially British as roast beef and Yorkshire pudding or forming an orderly queue. In fact, of all the world’s countries, it could be argued that we’ve done more than any other to develop and popularise it as a pastime.
Although types of gambling go back to almost beyond history, it wasn’t until the 17th century that it first began to be enjoyed in an organised way.
Although there is evidence that the very first lottery may have been run in 1566, it wasn’t until 1694 that the first officially recognised one was introduced. It was run by the state and, just like the National Lottery today, its aim was to raise money for the country. But, unlike today’s lottery, it was more like a premium bond than a chance to win millions. Each ticket cost £10 and paid back 10% interest. The lottery aspect came from the fact that “lucky” tickets selected at random would pay a far higher interest rate.
It was also at around this time that organised horse racing started to take shape. In the earliest days of race meetings, however, there were no official bookmakers. Spectators simply placed bets with each other and set their own odds. Very quickly the sport expanded – at its peak there were over 120 courses throughout the UK and eventually, in 1751, the Jockey Club was established to try to bring some order, with Tattersalls being launched in 1789 to do the same for betting. It seems hard to believe it today, but it wasn’t until 1960 that betting was finally permitted away from the race course.
While gaming was going on in the great outdoors, the establishments that would evolve into being recognisable casinos were first being introduced as well. One of the first was White’s – today an exclusive London club – a coffee and gaming house which opened in 1652; soon there were a number throughout the city. With the increase in tourism in the 18th and 19th centuries, Bath became the country’s second biggest centre for gaming, and the rich frequently headed there for a social season away from the capital.
Moving ahead in time, it was possibly the 1960s when London really affirmed itself as the UK’s casino capital with legendary clubs like Aspinall’s attracting everyone from the aristocracy to the decade’s top celebrities. Then, in 1968, the Gaming Act opened the doors for many more casinos to be established up and down the country.
However, it’s in the last few years that a real revolution in UK gaming has taken place with the emergence of online casino operators such as 888casino that are leading the way in the online gambling industry. These have made it easy to play everything from slots to poker from the comfort of your own home using a PC, tablet or even phone. The fact that, according to the Gambling Commission, online gaming generated £3.6 billion in revenue between 2014 and 2015 speaks for itself.
It’s also attracted a whole new range of players, particularly in younger age brackets who appreciate the ease and convenience of play. Women, who are not traditional casino-goers, are also an increasingly important target audience for the online casino operators.
So no-one could deny that gambling in the UK has come a very long way since it first started to gain popularity. And with the new lease of life that online gaming has provided, it seems like there’s also an exciting future ahead of it.
Although types of gambling go back to almost beyond history, it wasn’t until the 17th century that it first began to be enjoyed in an organised way.
Although there is evidence that the very first lottery may have been run in 1566, it wasn’t until 1694 that the first officially recognised one was introduced. It was run by the state and, just like the National Lottery today, its aim was to raise money for the country. But, unlike today’s lottery, it was more like a premium bond than a chance to win millions. Each ticket cost £10 and paid back 10% interest. The lottery aspect came from the fact that “lucky” tickets selected at random would pay a far higher interest rate.
It was also at around this time that organised horse racing started to take shape. In the earliest days of race meetings, however, there were no official bookmakers. Spectators simply placed bets with each other and set their own odds. Very quickly the sport expanded – at its peak there were over 120 courses throughout the UK and eventually, in 1751, the Jockey Club was established to try to bring some order, with Tattersalls being launched in 1789 to do the same for betting. It seems hard to believe it today, but it wasn’t until 1960 that betting was finally permitted away from the race course.
While gaming was going on in the great outdoors, the establishments that would evolve into being recognisable casinos were first being introduced as well. One of the first was White’s – today an exclusive London club – a coffee and gaming house which opened in 1652; soon there were a number throughout the city. With the increase in tourism in the 18th and 19th centuries, Bath became the country’s second biggest centre for gaming, and the rich frequently headed there for a social season away from the capital.
Moving ahead in time, it was possibly the 1960s when London really affirmed itself as the UK’s casino capital with legendary clubs like Aspinall’s attracting everyone from the aristocracy to the decade’s top celebrities. Then, in 1968, the Gaming Act opened the doors for many more casinos to be established up and down the country.
However, it’s in the last few years that a real revolution in UK gaming has taken place with the emergence of online casino operators such as 888casino that are leading the way in the online gambling industry. These have made it easy to play everything from slots to poker from the comfort of your own home using a PC, tablet or even phone. The fact that, according to the Gambling Commission, online gaming generated £3.6 billion in revenue between 2014 and 2015 speaks for itself.
It’s also attracted a whole new range of players, particularly in younger age brackets who appreciate the ease and convenience of play. Women, who are not traditional casino-goers, are also an increasingly important target audience for the online casino operators.
So no-one could deny that gambling in the UK has come a very long way since it first started to gain popularity. And with the new lease of life that online gaming has provided, it seems like there’s also an exciting future ahead of it.
November 10, 2016
Sky Betting & Gaming Expands to Italy
Online gambling operator, Sky Betting and Gaming, have put rumors of expansion to rest by making their products available in Italy. The company is based in the UK and mainly offers sports betting. After several rounds of testing, the app, SkyBet.it, has gone live. It will offer betting options in football, basketball and tennis. Players can choose which markets to play in and more options are set to be added soon.
The company’s expansion in Italy comes as no surprise as they had previously bought out Sky Italia in 2014. In the coming weeks, expansion is supposed to grow to new heights as their online casino, Casino.SkyBet.it, is also set to open. The company gained motivation to finally expand after their latest product, Super 6, was a big success in the UK and Italy.
Super 6 allows players to place bets on the scores of 6 specific football matches. The current jackpot for the game stands at £250,000 in the UK. The success of the game has been key to converting punters into real-money betters.
Sky Betting is expected to target Germany next, as they bought out Sky Deutschland, in 2014. Once the expansion in Italy is set in stone and deemed as a success, Sky Betting and Gaming are expected to move to Germany. Super 6 has already been launched in the country at 6erpack.sky.de and has a jackpot of €100,000. Punters that can correctly guess scores of all 6 chosen matches from the Bundesliga, can win the jackpot.
Sky Deutschland currently has 4.5 million subscribers and Jochen Weiner, the managing director, was hired specifically to make an impact on the local German market. According to him, the current market is “healthy” and the large number of subscribers should help them gain momentum.
Sky Betting and Gaming have recorded a 51% increase in revenue compared to the previous fiscal year. Revenue is up to £373.6 million, for the period ended in June 2016. Sports betting, casino games and poker are the companies main offerings.
The company’s expansion in Italy comes as no surprise as they had previously bought out Sky Italia in 2014. In the coming weeks, expansion is supposed to grow to new heights as their online casino, Casino.SkyBet.it, is also set to open. The company gained motivation to finally expand after their latest product, Super 6, was a big success in the UK and Italy.
Super 6 allows players to place bets on the scores of 6 specific football matches. The current jackpot for the game stands at £250,000 in the UK. The success of the game has been key to converting punters into real-money betters.
Sky Betting is expected to target Germany next, as they bought out Sky Deutschland, in 2014. Once the expansion in Italy is set in stone and deemed as a success, Sky Betting and Gaming are expected to move to Germany. Super 6 has already been launched in the country at 6erpack.sky.de and has a jackpot of €100,000. Punters that can correctly guess scores of all 6 chosen matches from the Bundesliga, can win the jackpot.
Sky Deutschland currently has 4.5 million subscribers and Jochen Weiner, the managing director, was hired specifically to make an impact on the local German market. According to him, the current market is “healthy” and the large number of subscribers should help them gain momentum.
Sky Betting and Gaming have recorded a 51% increase in revenue compared to the previous fiscal year. Revenue is up to £373.6 million, for the period ended in June 2016. Sports betting, casino games and poker are the companies main offerings.
November 09, 2016
Paddy Power to Lose $3.33M from US Elections Wager
The Irish bookmaker is reportedly looking at a €3 million (US$ 3.33 million) loss after American voters elected businessman Donald Trump as the next president of the United States.
Paddy Power to Lose $3.33M from US Elections WagerThis is the second time that Paddy Power Betfair found itself in the wrong side of political wagering since the UK voted to leave the European Union by a margin of 52-48 on June 23.
Paddy Power spokesman Féilim Mac An Iomaire told The Independent that the surprising twist in the US elections was reminiscent of what it saw in the “Brexit.”
“You could say it’s deja vu again,” said Mac An Iomaire. “Much like Brexit, it looked to be following the odds early on before a dramatic turnaround.”
Throughout the election campaign, the Irish bookmaker had predicted Clinton winning the Nov. 8 presidential polls. Paddy Power even made headlines last month by paying out about $1 million to customers who had bet on Clinton, saying the odds were so firmly in her favor that they wanted to get out of the bet.
But this all changed when the polling precincts opened on Tuesday. Paddy Power had Trump chance of victory at 83.3pc and Clinton’s at 22.2 percent.
“Paddy Power … will be on the receiving end of its worst political result in history if Trump does manage to upset the odds,” it said in a statement.
Meanwhile, the US presidential elections are set to eclipse the wagers made during the Brexit referendum, the Royal baby and all previous elections. CNN reported that the UK gambling industry is looking at more than £150 million ($186 million) to be wagered on the outcome of the 2016 U.S. elections.
So far, oddsmakers said they are looking at more than £130 million ($161 million) to be wagered by British punters. Should money bets surpasses £150 million, then the 2016 US presidential elections is poised to become the biggest non-sport betting event in British history.
Paddy Power to Lose $3.33M from US Elections WagerThis is the second time that Paddy Power Betfair found itself in the wrong side of political wagering since the UK voted to leave the European Union by a margin of 52-48 on June 23.
Paddy Power spokesman Féilim Mac An Iomaire told The Independent that the surprising twist in the US elections was reminiscent of what it saw in the “Brexit.”
“You could say it’s deja vu again,” said Mac An Iomaire. “Much like Brexit, it looked to be following the odds early on before a dramatic turnaround.”
Throughout the election campaign, the Irish bookmaker had predicted Clinton winning the Nov. 8 presidential polls. Paddy Power even made headlines last month by paying out about $1 million to customers who had bet on Clinton, saying the odds were so firmly in her favor that they wanted to get out of the bet.
But this all changed when the polling precincts opened on Tuesday. Paddy Power had Trump chance of victory at 83.3pc and Clinton’s at 22.2 percent.
“Paddy Power … will be on the receiving end of its worst political result in history if Trump does manage to upset the odds,” it said in a statement.
Meanwhile, the US presidential elections are set to eclipse the wagers made during the Brexit referendum, the Royal baby and all previous elections. CNN reported that the UK gambling industry is looking at more than £150 million ($186 million) to be wagered on the outcome of the 2016 U.S. elections.
So far, oddsmakers said they are looking at more than £130 million ($161 million) to be wagered by British punters. Should money bets surpasses £150 million, then the 2016 US presidential elections is poised to become the biggest non-sport betting event in British history.
October 19, 2016
Tampere selected to host Finland’s second casino
RAY, the Finnish Slot Machine Association, has selected the Central Deck and Arena project in the southern city of Tampere as the location for the second casino in Finland. The €550m project announced earlier this year is being developed by local property developer SRV and will include diverse restaurant, accommodation and entertainment services.
Tampere Arena“This is great news for SRV, and we are delighted that RAY selected our multifunctional arena as the location for their new game and event centre,” remarked Timo Nieminen, SRV Executive Vice President. “We will be proud to continue promoting this unique project, which – if realised – means that Tampere will have a completely new district.”
Several locations were considered for the Scandinavian country’s second casino license but RAY indicated that the combination of tourists and locals in Tampere as well as good transport connections would draw enough customers to make the facility profitable. SRV was selected in February 2016 to develop the project with plans for it to connect the eastern and western parts of Tampere. Negotiations have been ongoing during the year on the financing of the project and investor cooperation.
In addition to the casino, which will be the nation’s second in addition to Casino Helsinki, plans for the new 1.29 million sq ft development also include the largest sports and event arena in Finland. The complex would form a new hybrid block, combining a multifunctional arena, offices and apartments.
The first phase includes covering the southern railway yard with a deck, on which the event arena, two tower buildings and a training hall will be built. The second phase includes the building of a northern deck and three tower buildings. The entire site will include a total of 120,000 sqm and over a 1,000 apartments. The aim is to begin construction work of the southern deck and the event arena in spring 2017. According to the estimated schedule, the first phase will be completed in the summer of 2020, and the whole area in 2023.
Tampere Arena“This is great news for SRV, and we are delighted that RAY selected our multifunctional arena as the location for their new game and event centre,” remarked Timo Nieminen, SRV Executive Vice President. “We will be proud to continue promoting this unique project, which – if realised – means that Tampere will have a completely new district.”
Several locations were considered for the Scandinavian country’s second casino license but RAY indicated that the combination of tourists and locals in Tampere as well as good transport connections would draw enough customers to make the facility profitable. SRV was selected in February 2016 to develop the project with plans for it to connect the eastern and western parts of Tampere. Negotiations have been ongoing during the year on the financing of the project and investor cooperation.
In addition to the casino, which will be the nation’s second in addition to Casino Helsinki, plans for the new 1.29 million sq ft development also include the largest sports and event arena in Finland. The complex would form a new hybrid block, combining a multifunctional arena, offices and apartments.
The first phase includes covering the southern railway yard with a deck, on which the event arena, two tower buildings and a training hall will be built. The second phase includes the building of a northern deck and three tower buildings. The entire site will include a total of 120,000 sqm and over a 1,000 apartments. The aim is to begin construction work of the southern deck and the event arena in spring 2017. According to the estimated schedule, the first phase will be completed in the summer of 2020, and the whole area in 2023.
October 18, 2016
William Hill scraps Amaya merger talks after shareholder dissent
Bookmaker William Hill has scrapped plans for a multibillion-pound merger with Canadian online poker giant Amaya just days after its largest shareholder openly opposed the deal.
The London-based betting firm said it would consider alternative plans that have the potential to grow sales, fleshing out its four priorities: "online, technology, efficiencies and international". The company will also restart share buybacks, which it suspended in July.
Last week, Parvus Asset Management — an activist investor with a history of blocking large takeovers — waded into the discussions, accusing William Hill of pursuing a tie-up that had “limited strategic logic” and would “destroy shareholder value”. Parvus has a 14.3pc stake in the company.
“After canvassing views from a number of William Hill’s major shareholders, the board has decided that it will not pursue discussions with Amaya," the bookmaker said today. “Accordingly, the board has informed Amaya that it is withdrawing from discussions and wishes Amaya well for the future.”
William Hill was in talks with Amaya, the parent company of the PokerStars online casino, even before it received a £3bn takeover bid from a consortium of Rank Group and 888 Holdings, which it subsequently rejected in August.
The company — which is currently seeking a new chief executive after ousting James Henderson for failing to revive its struggling online business — said performance had continued to be positive in the second half of the year.
William Hill expects operating profit for 2016 to be at the top end of the previously guided range of £260m to £280m.
The London-based betting firm said it would consider alternative plans that have the potential to grow sales, fleshing out its four priorities: "online, technology, efficiencies and international". The company will also restart share buybacks, which it suspended in July.
Last week, Parvus Asset Management — an activist investor with a history of blocking large takeovers — waded into the discussions, accusing William Hill of pursuing a tie-up that had “limited strategic logic” and would “destroy shareholder value”. Parvus has a 14.3pc stake in the company.
“After canvassing views from a number of William Hill’s major shareholders, the board has decided that it will not pursue discussions with Amaya," the bookmaker said today. “Accordingly, the board has informed Amaya that it is withdrawing from discussions and wishes Amaya well for the future.”
William Hill was in talks with Amaya, the parent company of the PokerStars online casino, even before it received a £3bn takeover bid from a consortium of Rank Group and 888 Holdings, which it subsequently rejected in August.
The company — which is currently seeking a new chief executive after ousting James Henderson for failing to revive its struggling online business — said performance had continued to be positive in the second half of the year.
William Hill expects operating profit for 2016 to be at the top end of the previously guided range of £260m to £280m.
Ladbrokes Coral’s ‘disappointing’ shops sale
Ladbrokes Coral was busy celebrating on Monday overcoming the “last significant hurdle” to its merger agreement. But the news that the company could only fetch £55.5m for the combined parcel of 359 shops it has offloaded to Betfred and Stan James will likely send shudders throughout the sector.
The shops sale was mandated by the Competition and Markets Authority (CMA) in the summer which said between 350 and 400 outlets needed to be sold in order to satisfy local competition issues from the merging of the two estates.
The disposal will see Betfred pick up 322 shops for a total of £55m while Stan James will pick up the rump of 37 shops for £0.5m. It leaves the Ladbrokes Coral combination with a total of 3,626, the largest estate in the UK, pushing William Hill into second place with 2,330 and with Betfred now rising to 1,688.
The shops in question generated an EBITDA contribution of £28.5m which translates to a multiple of around 2.2 times and analysts were quick to brand the price-tag as disappointing. Richard Stuber at Numis said he had previously pencilled in proceeds of circa £108m, based partly on speculation in the press that Boylesports would be willing to pay around £100m for the parcel.
Indeed, Gala Coral chief executive Carl leaver hinted that other bidders might have been willing to pay more for the shops but Ladbrokes Coral had opted for certainty in order to get the deal over the line and move towards final CMA clearance.
But as Paul Leyland, founder at gambling consultancy Regulus Partners, said the low multiple still reflects the long-term earnings decline at the high-street bookmakers and the potential impact of the Triennial Review of gaming machine stakes and prizes which is likely to be officially announced by the government within weeks.
The news of the divestment sent the analysts back to the drawing board with their valuations for high-street bookmakers. Simon French at Cenkos said the “very disappointing valuation” achieved or these shops “must raise significant questions over the appropriate medium-term multiple with which to value both the enlarged Ladbrokes Coral retail estate and that within William Hill”.
Stuber at Numis said the “risk to future retail cash flows has clearly increased over last few months”.
Although he said he appreciated the forced nature of the sale and cautioned that it couldn’t give a read-across the entire estate, he said it would be prudent to cut its valuation of the combined group’s high-street business from nearly six times EBITDA to a multiple of four times.
The news that it was Betfred and Stan James that had won the race for these divested shops will no doubt be a disappointment to many, including the failed bidders and other interested parties such as the British Horseracing Authority which had lobbied the CMA to ensure true competition by allowing for a new competitor to enter the high street.
As Leyland from Regulus said: “The divestment to two established UK high-street operators will no doubt satisfy the CMA requirement that the acquirers must be qualified. However, it also means that the merger will not create a challenger brand, nor is it likely to drive material change within the (increasingly stale) offer available to British licensed betting office customers, in our view.”
The shops sale was mandated by the Competition and Markets Authority (CMA) in the summer which said between 350 and 400 outlets needed to be sold in order to satisfy local competition issues from the merging of the two estates.
The disposal will see Betfred pick up 322 shops for a total of £55m while Stan James will pick up the rump of 37 shops for £0.5m. It leaves the Ladbrokes Coral combination with a total of 3,626, the largest estate in the UK, pushing William Hill into second place with 2,330 and with Betfred now rising to 1,688.
The shops in question generated an EBITDA contribution of £28.5m which translates to a multiple of around 2.2 times and analysts were quick to brand the price-tag as disappointing. Richard Stuber at Numis said he had previously pencilled in proceeds of circa £108m, based partly on speculation in the press that Boylesports would be willing to pay around £100m for the parcel.
Indeed, Gala Coral chief executive Carl leaver hinted that other bidders might have been willing to pay more for the shops but Ladbrokes Coral had opted for certainty in order to get the deal over the line and move towards final CMA clearance.
But as Paul Leyland, founder at gambling consultancy Regulus Partners, said the low multiple still reflects the long-term earnings decline at the high-street bookmakers and the potential impact of the Triennial Review of gaming machine stakes and prizes which is likely to be officially announced by the government within weeks.
The news of the divestment sent the analysts back to the drawing board with their valuations for high-street bookmakers. Simon French at Cenkos said the “very disappointing valuation” achieved or these shops “must raise significant questions over the appropriate medium-term multiple with which to value both the enlarged Ladbrokes Coral retail estate and that within William Hill”.
Stuber at Numis said the “risk to future retail cash flows has clearly increased over last few months”.
Although he said he appreciated the forced nature of the sale and cautioned that it couldn’t give a read-across the entire estate, he said it would be prudent to cut its valuation of the combined group’s high-street business from nearly six times EBITDA to a multiple of four times.
The news that it was Betfred and Stan James that had won the race for these divested shops will no doubt be a disappointment to many, including the failed bidders and other interested parties such as the British Horseracing Authority which had lobbied the CMA to ensure true competition by allowing for a new competitor to enter the high street.
As Leyland from Regulus said: “The divestment to two established UK high-street operators will no doubt satisfy the CMA requirement that the acquirers must be qualified. However, it also means that the merger will not create a challenger brand, nor is it likely to drive material change within the (increasingly stale) offer available to British licensed betting office customers, in our view.”
October 12, 2016
The End Of An Era: Atlantic City’s Trump Taj Mahal Closes Its Doors
Beginning with the closure of the Atlantic Club in January 2014, Atlantic City has seen the fat trimmed from its casino industry. The city has gone from 12 casino properties to just seven, following today’s closure of the Trump Taj Mahal.
The closure of Trump Taj Mahal is hitting people differently than the other four casinos that closed over the course of 2014 — Atlantic Club, Showboat, Trump Plaza, and Revel — due to the iconic nature of “The Taj,” which will forever hold a place in gambling history.
The Taj becomes an icon
Despite its persistent financial troubles, The Taj was the gambling destination on the East Coast for over a decade.
Its place in the pantheon of gambling destinations shouldn’t be overly surprising considering it was the first billion-dollar casino on the East Coast, and the only billion-dollar casino in Atlantic City for over a decade. Borgata, opened over a decade later, and just barely eclipsed the cost of the Trump Taj Mahal, coming in at a final cost of $1.1 billion.
In effect, The Taj was a Las Vegas Strip casino in Atlantic City.
The Taj poker room was the place to play poker, with poker players traveling from New York, Philadelphia, D.C. and Boston to grab a seat in the weekend games at The Taj. As popular as the poker room was, it was the movie Rounders that made The Taj poker room as well known in poker circles as the World Series of Poker, and really cemented its place in poker history.
The Taj tries to shoot the moon
As mentioned above, the beauty and impressiveness of the property hid Trump Taj Mahal’s big secret.
The casino was a financial disaster from the day it opened its doors in 1990, with only brief periods of prosperity in its two-and-a-half-decade history.
The Taj’s financial woes didn’t come about because the casino wasn’t busy, or because it was seen as lacking in any respect. The problem wasn’t execution; it was planning. The price tag to build it, and the interest rates on the bonds Donald Trump agreed to pay in order to get the necessary financing for the casino simply set the property up to fail. The Taj was doomed before it ever dealt a card or rolled a dice.
As Politifact has reported:
“He [Donald Trump] funded the construction of the $1 billion Trump Taj Mahal casino in Atlantic City, N.J., which opened in 1990, primarily with junk bonds at a whopping 14 percent interest. A year later, the casino was nearly $3 billion in debt, while Trump had racked up nearly $900 million in personal liabilities.”
In 1991, Trump Taj Mahal filed for the first of what would eventually be four bankruptcies:
Carl Icahn took control of the casino this year, and promised a $100 million investment in the property that many thought would breathe new life into the once opulent casino that had fallen into an extreme state of disrepair.
Icahn had recently turned around the Tropicana in Atlantic City, but a labor dispute resulted in a month-long strike, and with North Jersey casinos at least a possibility, Icahn decided to pull the plug and cut his losses.
Closure of the Taj Mahal may not be the end
Atlantic City’s capacity to support 12 casino properties was an open question well before neighboring states got into the casino business.
Once casinos started popping up on all sides of New Jersey, the question being asked wasn’t if Atlantic City could support 12 casino properties. Rather, it was “how many casinos need to close in order for Atlantic City’s casino industry to right-size itself?”
The current number of operational casinos in Atlantic City is seven. Developer Glenn Straub is trying to reopen Revel (which has been rebranded to TEN), which would bring the number of operational casinos in Atlantic City back up to eight. That may or may not be a viable number.
Some analysts think the market could support as many as eight casinos depending on other circumstances in the city and beyond. Others feel the proper number is no more than five or six casino properties, and even less if casinos are built in the northern part of the state in the coming years.
What happens next?
What happens to these shuttered casino properties will dictate the future of the once popular resort town.
Showboat has been green-lighted to reopen as a non-gaming hotel. If Trump Plaza, Atlantic Club, and Trump Taj Mahal can be repurposed in somewhat similar ways, it could be a boon for the city and its remaining casinos, all of which have seen operating profits rise since the 2014 casino contraction.
There are any number of uses for these massive properties:
They could be:
The closure of Trump Taj Mahal is hitting people differently than the other four casinos that closed over the course of 2014 — Atlantic Club, Showboat, Trump Plaza, and Revel — due to the iconic nature of “The Taj,” which will forever hold a place in gambling history.
The Taj becomes an icon
Despite its persistent financial troubles, The Taj was the gambling destination on the East Coast for over a decade.
Its place in the pantheon of gambling destinations shouldn’t be overly surprising considering it was the first billion-dollar casino on the East Coast, and the only billion-dollar casino in Atlantic City for over a decade. Borgata, opened over a decade later, and just barely eclipsed the cost of the Trump Taj Mahal, coming in at a final cost of $1.1 billion.
In effect, The Taj was a Las Vegas Strip casino in Atlantic City.
The Taj poker room was the place to play poker, with poker players traveling from New York, Philadelphia, D.C. and Boston to grab a seat in the weekend games at The Taj. As popular as the poker room was, it was the movie Rounders that made The Taj poker room as well known in poker circles as the World Series of Poker, and really cemented its place in poker history.
The Taj tries to shoot the moon
As mentioned above, the beauty and impressiveness of the property hid Trump Taj Mahal’s big secret.
The casino was a financial disaster from the day it opened its doors in 1990, with only brief periods of prosperity in its two-and-a-half-decade history.
The Taj’s financial woes didn’t come about because the casino wasn’t busy, or because it was seen as lacking in any respect. The problem wasn’t execution; it was planning. The price tag to build it, and the interest rates on the bonds Donald Trump agreed to pay in order to get the necessary financing for the casino simply set the property up to fail. The Taj was doomed before it ever dealt a card or rolled a dice.
As Politifact has reported:
“He [Donald Trump] funded the construction of the $1 billion Trump Taj Mahal casino in Atlantic City, N.J., which opened in 1990, primarily with junk bonds at a whopping 14 percent interest. A year later, the casino was nearly $3 billion in debt, while Trump had racked up nearly $900 million in personal liabilities.”
In 1991, Trump Taj Mahal filed for the first of what would eventually be four bankruptcies:
- The second bankruptcy occurred in 2004 (Trump Hotels and Casinos Resorts);
- The third in 2009 (Trump Entertainment Resorts);
- The fourth in 2014 (Trump Entertainment Resorts).
Carl Icahn took control of the casino this year, and promised a $100 million investment in the property that many thought would breathe new life into the once opulent casino that had fallen into an extreme state of disrepair.
Icahn had recently turned around the Tropicana in Atlantic City, but a labor dispute resulted in a month-long strike, and with North Jersey casinos at least a possibility, Icahn decided to pull the plug and cut his losses.
Closure of the Taj Mahal may not be the end
Atlantic City’s capacity to support 12 casino properties was an open question well before neighboring states got into the casino business.
Once casinos started popping up on all sides of New Jersey, the question being asked wasn’t if Atlantic City could support 12 casino properties. Rather, it was “how many casinos need to close in order for Atlantic City’s casino industry to right-size itself?”
The current number of operational casinos in Atlantic City is seven. Developer Glenn Straub is trying to reopen Revel (which has been rebranded to TEN), which would bring the number of operational casinos in Atlantic City back up to eight. That may or may not be a viable number.
Some analysts think the market could support as many as eight casinos depending on other circumstances in the city and beyond. Others feel the proper number is no more than five or six casino properties, and even less if casinos are built in the northern part of the state in the coming years.
What happens next?
What happens to these shuttered casino properties will dictate the future of the once popular resort town.
Showboat has been green-lighted to reopen as a non-gaming hotel. If Trump Plaza, Atlantic Club, and Trump Taj Mahal can be repurposed in somewhat similar ways, it could be a boon for the city and its remaining casinos, all of which have seen operating profits rise since the 2014 casino contraction.
There are any number of uses for these massive properties:
They could be:
- converted to housing;
- turned into a non-gaming entertainment complex;
- turned into shopping malls with retail and dining options.
- The key is finding a way to repurpose these buildings so they’re not an eyesore on the Atlantic City skyline, or a depressing reminder of the city’s lost glory.
October 11, 2016
In poker terms, Amaya is offering William Hill a marginal hand
When William Hill threw out a cheeky three-way merger proposal from the Rank Group and 888 Holdings a couple of months ago, its chairman, Gareth Davis, explained robustly that the bookmaker would not be doing a deal based on “risk, debt and hope”.
Quite right, too. Life has become tougher for William Hill over the past year, and it has lost its chief executive on the way, but there was no reason to panic.
But now comes a deal the board wants to look at – a potential “merger of equals” with Amaya, the Canadian company whose PokerStars website dominates the world of online poker. But, using Davis’s own yardsticks, the appeal looks wobbly at best.
On risk, Amaya brings at least two big ones. The more obvious is a $870m (£704m) penalty in the US state of Kentucky. Amaya is probably correct in thinking it will not end up paying anything like that sum, but one can never be sure given US authorities’ past (baffling) attempts to combat online poker.
The other risk is that William Hill ends up with too much exposure to unregulated markets, meaning those where gambling is either banned or the rules are so unclear that your local operation can legislated out of existence. At the moment, William Hill’s exposure to unregulated territories is an admirably low 5%. After a merger with Amaya, the ratio would rise to about a quarter of the business. Big difference.
On debt, Amaya would bring a bundle. The combined group’s borrowings would be about 3.5 times the top-line profits. Historically, William Hill has aimed for under two times. If high levels of debt are not your bag, Amaya is a strange choice of partner.
The hope element is that cross-selling will do wonders for both companies – that Amaya’s poker players will want to bet on sport with William Hill, and vice versa. That seems plausible, but the degree is untested.
Add it up and we can agree that Amaya looks a better gamble than the complex Rank/888 proposal, where the debt ratios would have been even higher. The Canadian company is a fearsome generator of cash and it is digital and international – qualities prized by William Hill. All the same, there’s a whiff of desperation in the idea that an overdose of online poker, a game that’s barely growing these days, is the thing to fire up William Hill.
Note the limp reaction in the share price, up just 3%. In poker terms, Amaya is offering a marginal hand. William Hill’s investors may fairly feel the self-help cards are stronger.
Quite right, too. Life has become tougher for William Hill over the past year, and it has lost its chief executive on the way, but there was no reason to panic.
But now comes a deal the board wants to look at – a potential “merger of equals” with Amaya, the Canadian company whose PokerStars website dominates the world of online poker. But, using Davis’s own yardsticks, the appeal looks wobbly at best.
On risk, Amaya brings at least two big ones. The more obvious is a $870m (£704m) penalty in the US state of Kentucky. Amaya is probably correct in thinking it will not end up paying anything like that sum, but one can never be sure given US authorities’ past (baffling) attempts to combat online poker.
The other risk is that William Hill ends up with too much exposure to unregulated markets, meaning those where gambling is either banned or the rules are so unclear that your local operation can legislated out of existence. At the moment, William Hill’s exposure to unregulated territories is an admirably low 5%. After a merger with Amaya, the ratio would rise to about a quarter of the business. Big difference.
On debt, Amaya would bring a bundle. The combined group’s borrowings would be about 3.5 times the top-line profits. Historically, William Hill has aimed for under two times. If high levels of debt are not your bag, Amaya is a strange choice of partner.
The hope element is that cross-selling will do wonders for both companies – that Amaya’s poker players will want to bet on sport with William Hill, and vice versa. That seems plausible, but the degree is untested.
Add it up and we can agree that Amaya looks a better gamble than the complex Rank/888 proposal, where the debt ratios would have been even higher. The Canadian company is a fearsome generator of cash and it is digital and international – qualities prized by William Hill. All the same, there’s a whiff of desperation in the idea that an overdose of online poker, a game that’s barely growing these days, is the thing to fire up William Hill.
Note the limp reaction in the share price, up just 3%. In poker terms, Amaya is offering a marginal hand. William Hill’s investors may fairly feel the self-help cards are stronger.
September 26, 2016
Time to Reconsider Ban on Sports Betting?
An advisory group put together by the American Gaming Association recently recommended ending the federal ban against sports betting.
Sports gambling outside of Las Vegas is currently prohibited by federal law, according to the Professional and Amateur Sports Protection Act of 1992. However, the time has come for an open and regulated sports betting market. “It’s time to reconsider that national ban,” said Tim Murphy, former deputy director of the FBI and Chair of the advisory group.
States should have the right to decide whether to offer sports betting, recently recommended the board. In a bid to repeal the current legislation the group is set to lobby on Capitol Hill.
The American Gaming Association formed in 2015 and was launched as an initiative to expose the massive illegal gambling market. Murphy, the former FBI Deputy Director, said findings will be shared with legislators and stakeholders “so we can at least spur the critical national dialogue on this topic and get people involved and give them insight into how and why this needs to be changed.”
Sports gambling outside of Las Vegas is currently prohibited by federal law, according to the Professional and Amateur Sports Protection Act of 1992. However, the time has come for an open and regulated sports betting market. “It’s time to reconsider that national ban,” said Tim Murphy, former deputy director of the FBI and Chair of the advisory group.
States should have the right to decide whether to offer sports betting, recently recommended the board. In a bid to repeal the current legislation the group is set to lobby on Capitol Hill.
The American Gaming Association formed in 2015 and was launched as an initiative to expose the massive illegal gambling market. Murphy, the former FBI Deputy Director, said findings will be shared with legislators and stakeholders “so we can at least spur the critical national dialogue on this topic and get people involved and give them insight into how and why this needs to be changed.”
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