Pronouncing the current spate of legislative initiatives involving gaming expansion “interesting and exciting,” B Global founder Brendan Bussmann nonetheless maintained that many of the bills involved would fall by the wayside before the sessions are gaveled to a close. In a report released Friday, he wrote, “Just because a bill is introduced doesn’t mean that it will be passed or that it will be passed in that form, as it is about the sausage-making process, as the proverbial saying goes.”
He added, “Gaming-related legislation has run into a buzzsaw this cycle. Part of this is due to competing interests within the industry over expansion or reform opportunity.” He also blamed misinformation and “constructed narratives” from opposing forces, particularly the mass media, forcing the industry to strive doubly hard to correct misconceptions.
Turning to specific states, Bussmann began with New York, where the only certainty was described as uncertainty. Except for today’s deadline for casino companies to submit questions to the government about the licensing process, no firm dates have been established. Thus, “The art of marksmanship over what some teams may ask (or not ask) becomes part of the process.” The actual deadline for submissions is a moving target, believed to be somewhere between April and June, “but this is still up in the air for a host of reasons.”
Presently rushing to the scene are Rush Street Gaming, Mohegan Sun, and Saks Fifth Avenue, a team that is proposing a high-end boutique casino. Bussmann believes that only one newcomer submission will ultimately be culled from a crowded field that now also includes Las Vegas Sands. Incumbents MGM Empire City Yonkers and Resorts World New York, he thinks, will get the other two nods. Whoever “wins” will have to pony up $500 million for a 10-year license, plus $500 million for a 10-year license $500 million upfront for upgrades (thereby adding an extra $50 million in yearly operating expenses).
Expanded sports betting and Internet gambling are also on the Empire State’s legislative docket. Bussmann outlined the challenge facing the nine current online sports betting (OSB) providers in the state, facing a market “that is currently stagnant at best, if not shrinking in volume. One would also have to understand why anyone would go into the state as a 10th operator, even with a marginally less tax rate, for a market that was constructed so poorly, other than a pure money grab and following the flawed New Hampshire model,” which also taxes OSB revenues at 51 percent off the top.
Moving on to Missouri, Bussmann described the legislative situation as a Jefferson City remake of the movie Groundhog Day. “All roads on sports betting lead through the Senate that likely will face the same fate as it did last year by self-prescribed sports betting champion Denny Haskins, who effectively killed his own bill.” In addition to Haskins’s perceived perversity is the issue of unlicensed slot routes, which casino operators would like to see entirely extirpated. Bussmann suggested that the casinos should learn how to live with slot routes, now that Pandora’s Box, as he put it, is open.
Bussmann did suggest a pathway to passing sports betting, namely by leaving the slot-route issue aside. He also offered an alternate course whereby route operators, sports teams, and sports-betting providers form an alliance against those gaming companies that dabble in casinos and OSB alike.
Neighboring Nebraska presents lawmakers with a scrum of sports-betting reform, regulation of “skill games” (i.e., slot routes), and the first update of keno in three decades. Bussmann explained that the sports-betting bill currently before the Legislature would allow wagering on sports teams while in-state. “This is a clean-up of a last-minute amendment that was added by then-Senator Patty Pansing Brooks, who wanted to ‘protect the children’ while they were in-state and not allow wagering.”
Skill-game operators seek to protect their 10,000 machines and not permit regulation. Bussmann allowed, “While the state needs to clean up this mess, as it should have several years ago when the bill was first proposed,” the current iteration of the bill would leave charitable beneficiaries of the status quo out in the cold.
As for keno, it “still exists in a state that feels red pencils and a piece of paper are the best forms to conduct the game.” The bill being considered would permit electronic keno without hastening the five-minute pace of the contest.
Despite recent polls showing popular support in Georgia for both casinos and sports betting, Bussmann says solons are fixated on a proposal that “would put it in the hands of the lottery and not take it to voters, a risky proposition that exposes any passage to legal challenges because of its constitutionality. … Best bet to avoid it all is to take it to the voters, but the campaign can’t look like it has in California, Florida, or even Colorado — it generally needs a new approach and new leadership.”
Among the other states considering casinos, sports betting, and slot routes is North Carolina, where everything is on the table at present. Bussmann opines that it will be a heavy lift to achieve the necessary compromise whereby “everyone walks away happy.” By contrast, he thinks neighboring South Carolina could surprise everyone where sports betting is concerned, allowing for the facts that there’s a great deal of time remaining in the session and legislators have only “loosely” debated legalized gambling in the recent past.
Governor Kay Ivey’s reelection in Alabama may bode well for gaming reform this session, but the courts have ruled heavily against private-sector operators like Greenetrack. For a gaming package to succeed legislatively, Bussmann believes, tribal moguls Wind Creek must have a seat at the table.
One state where gaming expansion is already failing is Indiana, widely thought to have been a promising jurisdiction for igaming. Reported Bussmann, “The VGT coalition has, after several years, finally made their voice effective and tied any expansion of gaming at the hip, effectively killing the bill for this session. The question remaining is where was proponent Senator Jon Ford as the bill fell on the sword.”
As for states where gaming expansion has recently been implemented, Bussmann had good news from Nebraska. After outgoing Gov. Clay Ricketts slow-walked the inception of racinos, matters have accelerated considerably under successor Gov. Jim Pillen, who has put the regulation-making pedal to the metal.
“While this is welcome news, there is still work to be done, as the Commission still needs to approve the minimum internal-control standards and other procedural items, while also approving suppliers that in some case are still not known,” Bussmann wrote. He added direly, “There is definitely a rush those to get it started by some operators that are underperforming on their slot performance based upon their initial estimates promised to elected officials.”
Another state where regulations are evolving, somewhat contentiously, is Maine. The proposed guidelines would impose severe strictures on marketing, and casinos, tribes, and the state “are not on the same page.” When the Maine OSB market will go live is anybody’s guess, Bussmann concluded.