Two stories dominated the gaming industry throughout 2018 – the Supreme Court ruling that legalized sports betting nationally, and the quick departure of Steve Wynn from the company he created after salacious sexual harassment allegations came to light.
The stories overshadowed news feeds throughout the year. I chose sports betting as the year’s top gaming story because the justices’ decision created a litany of news lines that crossed all areas – business, government, professional sports, and gambling. It’s a story that will continue into 2019 and beyond.
Wynn Resorts enters 2019 as a different company from 12 months ago. Elaine Wynn – Steve Wynn’s ex-wife – is the largest shareholder and there is new leadership at both the board and executive level.
The gaming industry is far from boring. Personalities and business stories were abundant in 2018 and we expect more of the same in 2019.
Happy New Year and thank you to the readers of CDC Gaming Reports.
The Top 10:
No. 1 – Sports betting legalized nationally
May 14 was the gaming industry’s transformational moment of 2018. The U.S. Supreme Court voted 6-3 to kill the Professional and Amateur Sports Protection Act – the federal law that banned single-game sports wagering beyond Nevada. By the end of the year, six states – Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania and Rhode Island – legalized sports betting, while New Mexico allowed an Indian casino to jump into the game. As many as dozen more states could legalize sports betting in 2019.
No. 2 – Steve Wynn/Wynn Resorts changes
The departure of Steve Wynn from the gaming industry was fast and stunning. After the Wall Street Journal revealed allegations of sexual abuse and sexual misconduct, the founder and CEO of Wynn Resorts resigned, sold his stock, and left the building. By the end of the year, the casino company’s board was completely remade with six new members – including three women – and a new chairman in gaming veteran Phil Satre. The executive office was also shaken up. Wynn Resorts still faces investigations from Massachusetts and Nevada over the former CEO’s alleged conduct.
No. 3 – Regional consolidation forms three casino giants
More than $5 billion created three dominate regional casino players in 2018. Penn National Gaming paid $2.8 billion for a dozen Pinnacle Entertainment casinos, and Boyd Gaming Corp. took operational control of four other Pinnacle properties for $575 million. Meanwhile, Eldorado Resorts bought seven Tropicana Entertainment casinos for $1.85 billion. The deals involved the Gaming and Leisure Properties real estate investment trust and created a regional gaming hierarchy, with Penn National at the top, followed by Boyd and Eldorado.
No. 4 – Gaming stocks on a roller coaster ride
Owning gaming stocks in 2018 was like having vertigo. The dizzy spells were non-stop. Poor third quarter projections for Las Vegas by Caesars Entertainment and MGM Resorts International sank not only their stock prices, but also the competition. Gaming stocks were affected by Washington D.C.’s uncertainty, sending many shares to 52-week lows.
No. 5 – Macau gaming comeback continues, but cracks appearing
Macau is heading toward another double-digit gaming revenue jump in 2018 with December expected to provide the market’s 29th consecutive monthly increase. But headwinds are on the horizon. The ongoing trade war between the U.S. and China and uncertainty over gaming concession renewals concern the investment community heading into 2019.
No. 6 – Atlantic City rebound – Hard Rock, Ocean Resort open
In June, Atlantic City welcomed two new properties – Hard Rock Atlantic City (formerly Trump Taj Mahal) and Ocean Resort (formerly Revel). Both locations still need to attract more customers. But the good news for the Atlantic City casino industry is that spending is up in 2018 and gambling revenue is on pace to meet or exceed last year’s numbers.
No. 7 – Mark Frissora to leave as Caesars CEO
Caesars Entertainment CEO Mark Frissora overshadowed company earnings in November when he announced his departure as of Feb. 8. He reportedly had been at odds with hedge funds that owned large stakes in the gaming company and are looking to force a sale. By December, Caesars said Frissora would stay on until April because the new CEO search was taking longer than anticipated.
No. 8 – Geoff Freeman departs American Gaming Association, replaced by Bill Miller
After five years at the helm of the American Gaming Association – and less than a month after the Supreme Court’s historic sports betting ruling – Geoff Freeman announced his departure to accept a similar role with the Grocery Manufacturers Association. In December, the AGA announced that longtime Capitol Hill lobbyist Bill Miller would be organization’s new CEO.
No. 9 – Sports book operator CG Technology fined $1.5 million
For the third time in five years, sports book operator CG Technology agreed to pay a multi-million-dollar fine to settle a disciplinary complaint with Nevada gaming regulators. The fine – $1.75 million to settle a four-count complaint and a separate $250,000 payment to the Nevada Council on Problem Gambling – fell in between the $5.5 million fine in 2014 and $1.5 million fine in 2016.
No. 10 – Florida’s Amendment 3 passage changes casino expansion
The unholy alliance between the Seminole Tribe of Florida and Disney won out. Florida voters in November overwhelmingly approved a constitutional amendment limiting future casinos outside Indian reservations. The Seminole Tribe, which operates six of the state’s seven Indian casinos, and anti-gaming Disney, spent a combined $40 million in favor of the amendment’s passage.
Honorable Mention:
Gaming revenue continues to grow nationally
Scientific Games settles multi-million-dollar federal lawsuit for $151.5M
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