Gaming

A Sporting Chance

Posted on September 1, 2020

Esports has grabbed the attention of more than just the gaming industry, and for good reason.

The industry’s rapid rise has benefited from numerous omnichannel platforms that allow for unprecedented viewership and engagement from a diverse audience. With the “new abnormal” defined by Covid-19, esports has proven that media consumption is not just about what people can watch on the major networks. Instead, people are turning to streaming platforms like Twitch and YouTube for competitive-based content

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Southern Exposure: Why gaming in the South is one of the last opportunities in the U.S.

Posted on August 16, 2020

The United States hosts a diverse set of gaming options from coast to coast. The gaming-rich Northeast continues to be dominated by strong regional destination casinos such as Encore Boston Harbor, Mohegan Sun, Borgata and Wind Creek Bethlehem. The Midwest remains the focus of the riverboat gaming. Tribal gaming also prevails across the country from North Carolina to Oklahoma and all along the West Coast.

The southern portion of the United States remains largely untouched when it comes to casino gaming. One of the many reasons for this over the years has been the long-held values and deep religious beliefs within these communities that have had an aversion to casino gaming.

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Research Brief: U.S. Senate Judiciary Committee – Protecting the Integrity of College Athletics

Posted on July 16, 2020

Today, the United States Senate Judiciary Committee held a hearing titled “Protecting the Integrity of College Athletics.” The full committee, chaired by Senator Lindsey Graham (R-SC), heard testimony on two major topics in college athletics, Name Image Likeness (“NIL”) and sports betting. These are two issues that, while extraordinarily important in college athletics, the NCAA clearly lacks the proper education to understand their true impacts. The hearing was divided into two panels with a total of seven testimonies on these two major topics:

Panel I: Name Image Likeness
• Dan Radakovich, Athletic Director, Clemson University
• Professor Matt Mitten, Executive Director of the National Sports Law Institute, Marquette University School of Law
• George Wrighster III, Former Member of the National Football League Players Association (“NFLPA”) Board of Representatives
• Dr. Mark Emmert, President of the National Collegiate Athletic Association (“NCAA”)
• Ramogi Huma, Executive Director of the National College Players Association (“NCPA”)

Panel II: Sports Betting
• Bill Miller, President and CEO of the American Gaming Association (“AGA”)
• Heather Lyke, Director of Athletics at the University of Pittsburgh

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Free to Play

Posted on July 16, 2020

As the sports arena fell silent due to the coronavirus, a host of new sports and games sparked the curiosity of sports fans and bettors, such as esports, Belarusian soccer, Russian ping
pong, Taiwanese baseball, darts and more. However, the main professional leagues and other U.S. sports have moved to free-to-play (F2P) as a way to stay engaged with fans during this unprecedented and uncertain time.

F2P is an opportunity for players to engage with games and products for fun or practice, sometimes in real time. F2P offers the same entertaining gameplay offering bonus rewards or prizes found in real-money games while allowing game producers, brands, and operators to cultivate new customers.

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Reform to perform: Shutdown provides rare POGO opportunity

Posted on June 7, 2020

As the brick and mortar gaming world fell silent in response to the coronavirus, many online gaming operations continued throughout the pandemic. However, the Philippine Amusement and Gaming Corporation (PAGCOR) and President Rodrigo Duterte also shuttered the Philippine Online Gaming Operators (POGOs) in the middle of March in response to the outbreak. POGOs have made a sizeable impact financially to the Philippines, with revenues increasing by more than 13% from 2018 to 2019.

In late April, the government began to hold conversations about restarting these operations and deeming them essential businesses as a way to help finance a government heavily hit by a revenue shortfall due to the pandemic. After a six–week break, they were allowed to restart these operations following the strictest guidelines issued by the government under the Enhanced Community Quarantine (ECQ). Restrictions included limitations on staff sizing (30%), shuttle services for employees, temperature checks, social distancing and masks for employees.

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Strip Reset: COVID-19 is definitely challenging, but does the crisis present opportunities for a Vegas makeover?

Posted on May 16, 2020

Las Vegas soared until recent years, but we’ve reached the tipping point, where it’s necessary for the Strip to redefine itself again. Las Vegas is like no other place in the world. It’s the entertainment and sports capital of the world. It has the most amazing resorts. It just needs to remember our industry’s roots, redeliver on customer service, and provide value.

Covid-19 has devastated the industry and the greater Las Vegas economy. With the resulting industry shutdown, the city must take the opportunity to develop a strategy to reopen, reinvigorate and recapture its guests.

For the first time in well over a decade, both Caesars Entertainment and MGM Resorts, which between them operate 18 Las Vegas Strip resorts, have new leadership teams. These teams are comprised of seasoned casino industry professionals—not outsiders from professions other than hospitality—who have the ability to make these changes.

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Research Brief: PASPA U.S. Sports Betting Two Years Post Repeal

Posted on May 16, 2020

Two years ago, the Supreme Court of the United States made a historic decision in Murphy v. NCAA (National Collegiate Athletic Association), ruling on the constitutionality of the Professional and Amateur Sports Protection Act (“PASPA”). In overturning PASPA, the Supreme Court allowed sports betting to spread across the country with active sports betting now in 18 states. There are eight other jurisdictions that are in the process to go live in the near future, including North Carolina, which is tribal; Tennessee and the District of Columbia, which have regulations completed; Washington, Virginia, and Puerto Rico, which are currently in the regulatory phase; and South Dakota and Maryland, where sports betting will be on the ballot this November.

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Research Brief: Japan’s IR Opportunity

Posted on April 26, 2020

Given these unprecedented and uncertain times, many questions continue to be raised as to how the process of integrated resorts in Japan may be affected by the ever-changing events surrounding the coronavirus (COVID-19) pandemic. As seen by government actions around the globe, this virus has not only affected Japan, but the rest of Asia, the United States, the Americas, and the world. China is experiencing a second wave of the virus not only in Wuhan, which just recently updated its case counts, but throughout the country. This has extended over the past few weeks to other jurisdictions such as Hong Kong, which just extended its lock down by 14 days, and other parts of Asia that were not initially hot spots but have extended as conditions have changed.

Japan’s integrated resort selection process has come into the crosshairs between numerous issues including the virus, the now-2021 Olympics, the upcoming World Expo in 2025, and the microcosm of Japan’s political process. While tourism has been halted across the globe, Japan will once again be on a path to achieve the tourism goals set by Prime Minister Abe; goals which are achievable with the introduction of integrated resorts once the pandemic subsides. The robust opportunity remains available for Japan to reach these goals and bring in tens of billions of dollars in investment between the three licenses, as well as job creation and other economic benefits that go along with them.

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Research Brief: Understanding Casino Operations

Posted on April 16, 2020

Given the uncertainties of coronavirus disease (“COVID-19”), investors are looking to understand the general operating parameters of a given casino operation and fixed versus variable expenses. This document provides detail on the intricacies of casino operations from a revenue and expense standpoint, including gaming revenues, operating expenses, and earnings before interest, taxes, depreciation, and amortization (“EBITDA”). The goal of this exercise is to provide an understanding of how these items may fluctuate between operators, as well as between jurisdictions. Additionally, this document will provide readers with an understanding of fixed versus variable expenses (for facilities that are open), allowing investors to more accurately project the performance of target properties under a variety of recovery scenarios.

The following discussion is based on Global Market Advisors’ (“GMA”) experience of reviewing hundreds of income statements from casino properties across the world. For the purposes of this analysis, GMA focused its evaluation on regional gaming operations in the United States, representing casino operations that have generated between $50 and $700 million in annual gaming revenue. Often, the only access that investors may have to operating income statements would be from those published from Nevada and New Jersey. As will be seen within this document, many departmental and overall margins vary greatly from casinos between these and other states. While many operations may have expenses that lie outside of the ranges presented in this report, the overwhelming majority of regional casinos across the United States likely fall within these ranges.

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Regulated Sports Betting: A Nevada Perspective

Posted on April 6, 2020

This article discusses the impact Nevada has had on legal regulated sports betting for the past seventy years. First, an overview and history of Nevada’s sports betting regulatory framework will be presented; and, second, lessons learned and issues to consider for states wishing to embark on legalized regulated sports betting such as, integrity, why states and not the federal government should regulate sports betting, how tax rates and fees impact the legal and illegal markets, why technology is a critical component of legal sports wagering, why multiple avenues for consumer protection are essential, and finally how cooperation among all stakeholders is essential and will help create solutions to new challenges.

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