
The Massachusetts Gaming Commission (MGC) voted 4-1 against a $677 million Brockton casino being proposed by Mass Gaming & Entertainment, a partnership company formed by Rush Street Gaming Chairman Neil Bluhm and Brockton Fairgrounds owner George Carney.
The Massachusetts Gaming Commission denied a proposal to build a casino resort in Brockton this week on fears of competing interests with the Mashpee Wampanoag Tribe.
The decision culminates a yearlong process of back-and-forth between the state and Mashpee Wampanoag Tribe. Gaming Commission members have been wrestling with trying to determine if the commercial Brockton casino would actually decrease tax revenues for the state.
The Brockton Fairgrounds, the proposed location of the resort, is just 20 miles away from the forthcoming Mashpee casino in Taunton. Under the Mashpee’s compact with Massachusetts, the tribe pays 17 percent of its gambling revenue to state should it hold exclusivity on the region.
The Brockton casino would have violated the compact and voided the Mashpee’s obligations to pay taxes on its gaming income.
‘We have been living on this land for thousands of years and made it possible for non-Natives to establish themselves here,’ Mashpee Wampanoag Tribal Council Chairman Cedric Cromwell said in a statement. ‘Historically, our people have been the recipients of a string of broken promises. Today is not one of those days.’
Broke Brockton
The birthplace of Rocky Marciano, the inspiration of Sylvester Stallone’s classic American film ‘Rocky,’ Brockton is one of the poorest towns in the entire state.
Brockton routinely places in the bottom ten of the state’s more than 350 cities and towns for annual per capita income. Brockton is also regularly referred to as one of the most dangerous cities to live in Massachusetts.
The $677 million casino would have brought jobs to the highly unemployed area and a sense of new life and energy. Unfortunately for residents, politics got in the way.
‘I feel bad for the people of Brockton because they desperately need the jobs and the city needs the money,’ Carney told the Boston Globe after the vote.
MGC Chairman Stephen Crosby said the competing casino in Taunton wasn’t the only reason for the rejection. He panned the Brockton design and called it a ‘great disappointment.’
‘It comes down to this not being the kind of casino Massachusetts envisioned,’ Crosby said. ‘These decisions are difficult and we acknowledge can be very disappointing. . . However in the end, the Commission has a responsibility to make a big decision in view of all considerations and that includes the best long-term interests of the Commonwealth.’
Massachusetts Loses, Malaysia Wins
Though the Mashpee Council says the MGC verdict was good for both sides and the state will receive an estimated $40 million in annual taxes from its Taunton resort, the real winner is the Genting Group, a Malaysian conglomerate that will finance the vast majority of the $1 billion build.
Genting owns Resorts World in Queens, New York City, and has proposed casinos in Miami and Las Vegas.
It’s now unclear if the MGC will look to other towns and cities in the third and final Region C.
The 2011 Expanded Gaming Act called for three destination resorts split into three geographically diverse regions across the state. The MGM Springfield claimed the western region and Wynn Boston Harbor owns the central permit.
Raiders’ Mark Davis Pledges ‘Lifetime Commitment’ and $500 Million to Las Vegas
Mark Davis holds up a mocked up banner of the ‘Las Vegas Raiders’ as he pledged his commitment to making the city the team’s new home. (Image: businessinsider.com)
‘Las Vegas Raiders’ has a certain ring to it, does it? Raider’s boss Mark Davis was in town this week to offer the most concrete assurance yet that Vegas could be about to get its first major league sports team.
‘We need a home. We need a stadium,’ Davis told a meeting of the Southern Nevada Tourism Infrastructure Committee (SNTIC) at UNLV Thursday. ‘That’s what Las Vegas is going to provide us and it’s going to be a great marriage.
‘If Las Vegas can come through with what we’ve been talking about, and we can do a deal here, then we’re going to become the Las Vegas Raiders,’ he added.
In short: build it, and we will come. And to show he was serious, Davis pledged $500 million towards the construction of a new stadium.
‘We’re not using Las Vegas as a bargaining chip,’ he said. ‘This is real.’
Momentum Builds
For an idea that began just a few months ago, it’s is gaining some serious steam. The proposal began at Las Vegas Sands, which wants build a $1.4 billion, 65,000-seat domed stadium on a 42-acre plot north of McCarran International airport, owned by the UNLV.
The casino giant, which has partnered with the Majestic Reality Company on the project, has indicated it will go ahead with or without the Raiders, provided it gets sign-off from SNTIC.
Davis assurances certainly won’t hurt matters when the SNTIC comes to make a decision next month, and his $500 million pledge may ease concerns about the amount of public money that would be plowed into the project.
LVS and Majestic Realty would contribute around $150 million towards construction while the remaining $750 million would come from taxes on tourists, according to the Las Vegas Review-Journal.
Sports Betting Not an Impediment
Davis said that he was confident that the NFL’s longstanding anti-sport betting stance would not be an impediment to bringing the Raiders to Vegas.
A recent memo, circulated by the NFL shortly after Davis first met with LVS boss Sheldon Adelson to discuss the project, would appear to add weight to that assertion. ‘There is no prohibition under league rules on a team moving to any particular city,’ it said.
‘Let’s give them [the NFL] an offer they can’t refuse,’ said Davis. ‘They’re going to approve it based on that.’
The Raiders lease expired on the O.co Coliseum in Oakland this year, but Davis has been able to secure a temporary extension. The team is likely to stay at there for the next few seasons until the new Vegas arena is built, should it get the go-ahead. It would be unlikely to be ready before 2020.
Station Casinos IPO Raises $531 Million
The Fertitta brothers, who stand to gain from money raised from Station Casino’s IPO. (Image: bloodyelbow.com)
Station Casinos set sail on the NASDAQ on Wednesday, trading under its new corporate name Red Rock Resorts, with the ticker symbol ‘RRR.’ The IPO has long been in the offing for the company, whose upturn in fortunes has coincided with the resurgence of the Las Vegas locals market, which it dominates.
The floatation raised $531.4 million, proceeds of which will go largely to the Fertitta family, Station Casinos’ founders and major shareholders (57 percent), via the planned purchase of the Fertitta Entertainment Company for $460 million.
Station and its existing shareholders priced 27.25 million shares at $19.50 apiece, precisely in the middle of the expected range of $18 to $21. At the time of writing on Friday, they were trading at $18.76.
It’s not the first time Station has been a public company, having first floated back in 1993. In 2008, it was bought out by a private equity group, Colony Capital, and the Fertittas, in a $5 billion leveraged acquisition just as the economic downturn hit.
Stock Market Stabilized
The downturn ravaged the casino industry in Vegas and the locals market was particularly hard hit. Saddled with debts, Station filed for Chapter 11 bankruptcy in 2009, a process which lasted two years. Station emerged from reorganization with Deutsche Bank owning 25 percent of the company, having agreed to hold $1 billion of its debt.
By 2011, the locals market was regaining confidence, and Station has gone from strength to strength since its reorganization, reporting 18 consecutive quarters of cash flow growth, and the highest net revenues since 2008, performances that have been pushing Station toward an IPO for a while.
In fact, the float would have come earlier, had market conditions been more favorable. It was approved by financial regulators in January, but postponed due to the volatility in the stock market this year, which has seen a drought of IPO’s up until MGM floated its new REIT, MGM Growth Properties, early last week.
Union Opposition
Meanwhile, the powerful Las Vegas union, Culinary Workers Union (Local 266), has been doing everything it can to derail the IPO. The union has a longstanding beef with the anti-union Station Casinos and last year launched a radio campaign in Nevada denouncing Deutsche Bank over its involvement in the Libor rate-rigging scandal.
The bank, which as well as being a major shareholder is the underwriter for the IPO, was forced to pay $2.5 billion in fines for its involvement in the financial scandal.
The union wrote to the financial regulator asking why Deutsche Bank’s recent missteps were not mentioned in Station Casino’s filing and stating that potential investors had a right to know.
Nevada Casino Revenue Falls Three Percent in March, Sportsbooks Set Betting Record but Poor Hold
Las Vegas sportsbooks struggled in March and helped decrease Nevada casino revenues by three percent. (Image: money.cnn.com)
Nevada casino revenue dropped three percent in March compared to the same month in 2015 as baccarat fell statewide and sportsbooks struggled to maintain reasonable holds on sports betting.
Overall, the state’s casinos won $922.2 million last month, $29 million less than in 2015. That correlates to roughly eight percent lower tax income for the state, or about $2 million.
‘I think we expected a little bit more this month, but it didn’t happen,’ Nevada Gaming Control Board Senior Research Analyst Michael Lawton told the Associated Press.
While there were some bright spots across the Silver State, primarily in Reno and South Lake Tahoe, numerous gaming culprits can be held accountable for the downturn in the Las Vegas area including slots and sports betting.
Unlucky Streak
As is the case for the majority of gamblers who frequent Sin City, the luck ran out for Las Vegas operators as the tables turned against them in March.
While casinos can do little to combat a reduction in play at baccarat tables, proceeds from the game down three and a half percent, gaming executives will certainly take issue with what was a rather dismal performance at the sportsbooks.
Nevada books recorded $458 million in sports wagers in March, a new record for any single month. The problem is, the oddsmakers won just 2.1 percent more than the bettors, translating into a win of just $9.6 million spread across the state’s 89 sportsbooks.
March Madness was unquestionably risky business in 2016. With no clear favorite to win the college basketball national title and a host of teams capable of reaching the Final Four in Houston, fans flocked to hedge their bets.
Only one #1 seeded team reached the final two games, and #10 Syracuse was the Cinderella story of the tournament. Villanova’s first national title in 31 years provided big wins for the Philadelphia faithful who put money where their hearts were.
Though Las Vegas technically still won, holding only 2.1 percent of $458 million felt like watching money walk out the door to floor bosses.
Nevada sportsbooks have averaged a win percentage of more than five percent over the last three years.
Casinos will experience a considerable drawback in betting totals in April as the month featured little to entice sports gamblers to Nevada. Fortunately, May is right around the corner, and with it comes the Kentucky Derby and Preakness horse racing spectacles.
Slots Pull Back
In addition to the sportsbooks, slots also had less than stellar performances for Nevada casinos. Though gamblers put $9.3 billion into the machines, the house won just 6.6 percent for a win of $616.6 million.
According to the UNLV Center for Gaming Research, the average hold rating for slot machines statewide in Nevada between 2004 and 2016 has been 6.9 percent. While a difference of 0.3 might seem trivial, when dealing with a figure of $9.3 billion it equates to a loss of roughly $28 million.