Economics

Asian Recovery or More of the Same?

Posted on November 30, 2021

Heading into 2020, it looked as though the gaming world would continue on its track of expansion in Asia.  Macau was two years out from concession renewal. The Philippines was seeing strong growth in gaming and tourism.  Jurisdictions such as Cambodia, Vietnam and others were seeing strong growth in their existing facilities with new projects being announced along the way.

Yet, it was shortly after the start of that year that the world began to change, and change rapidly.  Macau initially shut down for two weeks, and the rest of the world soon followed with what still remains for many jurisdictions that are in Great Shutdown mode. Gaming revenue evaporated quickly. Timelines for expansion disintegrated. Concession renewals in Macau were put in limbo other than a two-year extension to put all of the concessionaires on the same timeline for renewals.  Heading into 2022, there are just as many uncertainties as portions of Asia finally began to reemerge rom nearly two years of lockdown.

 

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10 Trends for 2022 – Japan Crosses the First Finish Line

Posted on November 30, 2021

With the Olympics being a made-for-TV event, Japan was never able to achieve its tourism goal of reaching 40 million visitors in 2021. Looking back on 2021, the total foreign visitor volume may only amount to roughly 30,000. While border restrictions are starting to relax to a three-day quarantine, Japan has only seen 25,900 visitors through the end of October.

Japan has a new prime minister, Fumio Kishida, who recently just secured the hold that his party, the Liberal Democratic Party, has on the Lower House of the Diet that will ensure that IRs remain on track as the country begins to loosen its restrictions from the Great Shutdown.

Japan, which has one of the highest vaccination rates in the world, will need to have IRs become a catalyst as it looks to restore and build upon its pre-pandemic tourist volumes.  With the Olympics in the rearview, IRs remain the single biggest opportunity for tourism and further investment in the country.

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Nix the Economic Incentives – Gaming is a driver that does not require handouts

Posted on November 2, 2021

Any development project in any industry will have various levels of economic impact. This includes the number of jobs it will create, the investment that is brought into the project, and the economic spillover.  Whether developing a new project on a greenfield site or a brownfield site, or redeveloping a building or area within a community, any development around the globe will bring these economic impacts.

When major industries look toward developments, and when cities look to attract new sectors or build upon existing developments, state and local governments will put forward a series of tax incentives, grants or other tools to lure these businesses to cities.  These includes big businesses that typically bring hundreds of thousands of good-paying jobs in manufacturing, technology and other sectors along with some level of investment into a facility.

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Dragon Policy – China’s influence on gaming at home and abroad

Posted on October 5, 2021

China continues to exert its influence and powers around the globe in just about every aspect of social, economic and geopolitical dynamics. This includes not just what happens within the borders of China, but also the policies associated with its citizenry, either through travel and tourism to other parts of the globe or through its business influences as Chinese corporations establish a global presence in the same manner.

Gambling is seen as less than favorable in the eye of Xi Jinping, president of the People’s Republic of China (PRC) and general secretary of the Chinese Communist Party. Xi maintains that gambling disrupts the social balance and harmony of the Chinese culture. This can be seen over the years in policy decisions to limit access to Macau, or Beijing’s policies toward other countries that may feature online gambling operations, an activity that is banned by the Chinese central government.

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Breaking Down the Adversarial Wall – Building the operator and regulator relationship through education and dialog

Posted on August 2, 2021

As the gaming industry continues to expand as a form of entertainment across the globe, operators and suppliers typically have three questions when they are looking at a brand-new jurisdiction or an expansion in an existing jurisdiction.  Those three questions are: what is the tax rate, what is the license fee, and who is the regulator?

On the flip side, legislators and regulators will seek input from prospective or existing operators as jurisdictions look to craft a new market, expand their market, or bring further innovation.  The balance between these interests can in some cases become awkward as operators look to effectively compete while also balancing the public policy goals of the market and allowing a strictly regulated market.

The crux of this is creating a healthy balance that allows effective regulation in the market, and not to be overly influenced by an operator or an outside stakeholder.  However, regulators must also allow ongoing, healthy dialogue and input into how a market needs to be crafted, how regulations may impede innovation, or how stakeholders can effectively operate in a market that allows the right amount of competition.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming – June 2021

Posted on June 16, 2021

It has now been more than three years since the repeal of PASPA, with the New Jersey and Delaware markets reaching their three-year anniversary since launching sports betting operations.  It has also been three years of ups and down with the sports calendar and with sports betting revenue.  Revenue for the most part continues to climb, although it is difficult to find a stabilized year of data over the last twelve months due to the pandemic.  While is may be some time as the border wars continue, it will be critical to understand the full growth potential for this expansion opportunity in the gaming industry.

The industry continues to face the challenges of SARS-Cov-2, as seen most recently during the Memorial Tournament on the PGA Tour.  Jon Rahm, who at the time was up by six strokes, had to withdraw from the tournament because of a positive test.  While the PGA let him finish the round and notify him in a bizarre 18th hole revelation, it remind the sports community that this pandemic is far from over, especially on a global scale.  Sportsbooks took the change in the marketing in different ways with some counting it as a withdrawal and returning wagers to players, while other took it as a win for Rahm who had a dominant lead.  This did lead to several conversation throughout the industry on how to deal with these and other incidents in the future, as well as the implications on responsible gaming and potential effects into the future.

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Research Brief: State Legislative Update on U.S. Land-Base Gaming – May 2021

Posted on June 3, 2021

The legislative cycle is coming toward the end of its run for 2021 with only a handful of states remaining that have policy implications other than those states that have full time legislatures. With most focus at this point on Louisiana (the last legislature to go into session this year) and Connecticut on sports betting, a number of land-based opportunities did not materialize into expansion. However, there are options that continue to be discussed across the country that prove that land-based gaming is still very much alive.

Almost every casino is back open in the United States following the Great Shutdown. In several cases, business is currently booming, as seen in the resurgence of the gaming industry that faced its greatest challenge that was imposed by government mandates. Nevada is a prime example of this as it just saw one of the best months it has ever had in generating gaming revenue, surpassing the $1 billion mark. Destinations such as the Las Vegas strip are seeing the return of the leisure customer that is excited to be back after over a year of closures. Part of this has been through the continued health and safety measures of the industry, vaccination efforts that began late in 2020, and the relaxation of draconian polices that were not always rooted in evidence-based research.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming – April 2021

Posted on April 13, 2021

The more things change, the more they stay the same

A year after the start of the Great Shutdown, the gaming and sports worlds are returning. The NCAA Division I Men’s basketball tournament ran its course with no major problems. The Masters is in full bloom in Augusta, and MLB threw its first pitch at the start of this month. This is all occurring while fans are returning to games and events as stadium capacity increases.

Legislative sessions are also in full bloom, with most of these sessions hitting their stride as some deadlines have passed while others are fast approaching. Several states are trying to get sports betting across the finish line before their session expires. Many of these are running into challenges, not just from a timing standpoint but also due to the legislative process. As seen in Georgia, sports betting died because of the voter law and the difference between parties. This is just one example of how legislation can either be changed dramatically, get killed, or die under its own death through the sheer weight of the process of legislation. While the issues may change over time, the same factors can make or break the process and cause well-intentioned groups and caucuses come apart because of other issues.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming – March 2021

Posted on March 16, 2021

March Madness is Upon Us

For the first time in two years, sports fans will be able to wager on the NCAA Division I Men’s basketball tournament.  While the tournament went dark last year because of the Great Shutdown, legal sports betting has expanded significantly across the country since last March.  However, this does not preclude though the office pools that will still take place, especially in jurisdictions that still do not have legal sports wagering.  The NCAA tournament is one of the largest wagering opportunities in the year, in addition to the Super Bowl that took place just over one month ago.

One of the challenges that will be faced those in legal states is the ability to wager on the ‘home team’, as several of these states have banned wagers placed on local teams and contests including college sports taking place in that jurisdiction.  States across the country are looking to provide these same athletes with the ability to profit from their name, image, and likeness (“NIL”) but provide them “cover” when it comes to wagers being placed legal on them.  However, keeping student-athletes off the legal books only allows an illegal market to continue, exposing these athletes to more harms than protections.  For the integrity of the tournament and student-athletes, the best place for any sports wager is in the legal market without restrictions.

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The Return of the Roaring ’20s: As the world recovers from Covid-19, the stage is set for a comeback; will Vegas lead the charge?

Posted on March 1, 2021

The 100-year anniversary of the roaring ’20s is upon us as the world finally begins to look toward new beginnings in a post-pandemic world.  Many have pointed out that the Spanish flu (which preceded the Roaring ’20s) is analogous to Covid-19, presenting a similar potential opportunity for the world to emerge from a pandemic with a new era of historic economic prosperity, which would include a boon to the hospitality, F&B and tourism sectors.

As eager as the world may be to return to “normal” life, it is vitally important that safety and health practices do not give way to pent-up demand and impatience.  Luckily, customers see a light at the end of the tunnel with vaccines being distributed and certain destinations gradually lifting restrictions.  While reintroducing global travel and entertainment will take time, deestination markets around the world will look to regain their share of the soon-to-be-rejuvenated global tourism market.

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