The Michigan Gaming Control Board (“MGCB”
or “Board”) has released the December, 2011 total adjusted revenue
figures for the three Detroit casinos – MGM Grand Detroit Casino,
MotorCity Casino and Greektown Casino. Overall, aggregate revenue
for the Detroit Market was up by 3.4% for 2011, when compared to
aggregate revenues from 2010.
Specifically for 2011, aggregate revenue
for MGM Grand Detroit Casino, MotorCity Casino and Greektown Casino
was up by 3.1% to nearly 600 million, 5.7% to $471.9 million, and
0.9% to $352.8 million respectively in comparison to the same month
last year.
All three casinos are subject to a wagering
tax of 19%, with 10.9% of this levy to go to the City of Detroit,
and 8.1% to be paid to the State of Michigan. The figures released
by the Michigan Gaming Control Board are the gross receipts less
winnings paid to wagerers. The figures do not include: 1) any fees
or other relevant city, state or federal taxes; 2) wages and
benefits paid to casino employees; 3) payments to suppliers, service
providers or vendors; and 4) other normal business expenses.
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MGM Grand Detroit Wins Gold Key Award for 2011
On Monday, January 9, 2012, MGM Grand
Detroit announced that it has been selected by Meetings &
Conventions (“M&C”) magazine as a winner of its Gold Key Award
for 2011. The Gold Key Award recognizes outstanding meetings
properties from across the world.
Winners of the award were nominated and
selected by readers of M&C based upon the overall
professionalism and quality of the property. According to the
announcement, readers honored 144 domestic and 21 international
hotels and resorts as Gold Key winners. The selections are based on
criteria including: staff attitude; quality of meeting rooms;
quality of guest services; food and beverage service; proficiency of
handling reservations; availability of technical/support equipment
and range of recreational facilities.
“The dedication to quality has always been
a trademark of M&C’s readers who represent the highest level
of meeting and incentive professionals. The 2011 Gold Key winners
have met these tough standards by providing outstanding service,”
said Kirk Lewis, Meetings & Conventions Publisher. “The
entire M&C staff commends the properties that have
demonstrated the qualities to earn the Gold Key distinction.”
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Powerball Ticket Price Increases
On Monday, January 9, 2012, in honor of the
Powerball’s 20th birthday, the Michigan Lottery announced several
new changes to its Powerball game to take effect on January 15.
Among the changes of the redesigned game is a price increase to $2
per wager.
In addition, Powerball jackpots will start
at $40 million and provide better odds. Players will continue to
play the new Powerball game by selecting their first five numbers
from 1 to 59 but the red Powerball number, or the sixth number, will
be selected from 1 to 35. The Michigan Lottery reports that overall
odds of winning a prize in the game are 1 in 31.8 and odds to win
the jackpot will be reduced from 1 in 195 million to 1 in 176
million.
The Michigan lottery estimates that the
average jackpot will become $255 million, up from the current
average of $141 million. For more information, visit:
http://www.michigan.gov/lottery/.
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Federal Government Clarifies Online Gaming
Restrictions
On Friday, December 23, 2011, the United
States Department of Justice (“Department”) announced through an
official memorandum opinion relative to lottery matters that the
Department would no longer consider non-sports related wagers to be
prohibited under the Wire Act (“Act”). Prior interpretations by the
Department considered all forms of interstate wagering occurring
over wire communications as being prohibited by the Act.
The memorandum was issued in response to
official inquiry submitted by the State of New York and the State of
Illinois regarding separate lottery proposals that allowed for the
sale of state lottery tickets to adult residents within each
respective state. However, both states’ proposed lottery structures
required the routing of electronic data to occur across state lines
which, under prior interpretations, may have violated the Act even
though only state residents would be allowed to participate in the
wagering activity. The Department revisited its past interpretation
of the Act based, in part, on the apparent conflict between the Act
and the Unlawful Internet Gambling Enforcement Act (“UIGEA”). Under
the UIGEA, intermediate routing of data used to place a wager is
explicitly excluded from scope of prohibited activities under the
law. Past interpretations broadly applied the Act to all wire
communications crossing state lines, regardless of whether the data
ultimately returned to the same jurisdiction where the information
originated.
The Department now considers the language
of the Act to apply only to wire communications that cross state
lines in connection on placing a wager on “any sporting event or
contest” and not to other forms of wagering. 18 U.S.C. § 1084(a).
Therefore, under the Department’s new interpretation, the
transmission of wagering information on any other activity is not
prohibited under the Act, bringing uniformity between the UIGEA and
the Act. Accordingly, the memorandum concludes that the Act does not
prohibit the New York or Illinois lottery schemes but limits the
scope of the opinion to an analysis of the Act and does not apply a
legal analysis under UIGEA.
The Department also provided its new
interpretation in a public letter addressed to Senators Harry Reid
and Jon Kyl who, in July of 2011, submitted a letter to the
Department requesting review and clarification of the policy
regarding enforcement of the Act. The letter was sent in response to
the recent crackdown on online gaming activities by the federal
government and urged the Department to continue pursuing illegal
online gaming outlets. The Department’s response reiterates the
newest interpretation of the Act and states that the new
interpretation “will not undermine the Department’s efforts to
prosecute organized criminal networks…and those gambling businesses
under the Unlawful Internet Gambling Enforcement Act.”
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Ohio Gaming Update
Video Lottery Terminals
In late December, MTR Gaming Group, Inc.
became the first Ohio racetrack owner to submit a video lottery
terminal (“VLT”) license application to the Ohio Lottery Commission
(“Commission”), seeking to place VLTs at its Scioto Downs facility
in Columbus, Ohio. Under a newly-enacted law, Ohio’s seven
horse racetracks have been authorized to operate a total of 17,500
VLTs (up to 2,500 per track location). In exchange for the
placement of VLTs, racetrack owners are required to invest $150
Million into their facilities and pay a $50 Million licensing fee.
Though the Commission passed a number of
administrative rules governing the licensing of VLTs at the state’s
horse tracks on an expedited basis in October, 2011, so far MTR is
the sole applicant, perhaps due to a lawsuit filed by the
organization, Ohio Roundtable, which alleges that the placement of
VLTs at racetracks violates the Ohio Constitution. Ohio Attorney
General Mike DeWine has recently filed a motion to dismiss the
lawsuit, arguing, among other things, that Ohio Roundtable lacks
standing to challenge the VLT law. In a recent press release,
Jeffrey Dahl, President and Chief Executive Officer of MTR Gaming
Group, said, “[b]ased on our review of the matter and the Attorney
General’s independent evaluation as set forth in the motions to
dismiss, we are confident that the current lawsuit filed in Ohio to
prevent the casinos and VLTs from proceeding is meritless, and as
such, we have started the process of obtaining our gaming license
with the state. We look forward to receiving our license –
which we expect to be issued within a reasonable time frame – and
developing the Scioto Downs VLT facility, which we believe will
drive significant long-term stockholder value and create hundreds of
jobs in the Columbus area.”
In addition, a public hearing will be held
on January 26, 2012 regarding four additional amended administrative
rules that the Commission is proposing to adopt. The proposed
rules relate to video lottery hours of operations (allowing
operation of VLTs on a 24/7 basis), the type of video lotto
terminals allowed, video lottery terminal maintenance and repair,
video lottery prize payments, as well as security and surveillance
procedures.
Commercial Casinos
The Ohio Casino Control Commission (“OCCC”)
is continuing its bi-weekly meeting schedule in order to address the
regulatory and licensing issues associated with the construction and
opening of the state’s four new commercial casinos. Due to the
unique licensing structure under the Ohio gaming law, the OCCC, the
casino operators, and the anticipated casino vendors, are working to
clarify which individuals and/or business need to be licensed.
The OCCC has announced that future meetings
will be held on January 18, February 1, February 15, March 7 and
March 21, 2012.
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AGA Elects Richard Haddrill as AGA Board
Chairman
In December, 2011, the American Gaming
Association (“AGA”) announced at its annual meeting that it has
elected Richard Haddrill, CEO and director of Bally Technologies,
Inc., to a two-year term as chairman of the organization. Mr.
Haddrill, who served as the AGA vice chairman for the past two
years, follows Keith Smith, president and CEO of Boyd Gaming
Corporation, in the position. James Murren, CEO of MGM Resorts
International, replaces Mr. Haddrill as the AGA’s new vice chairman.
“Keith’s leadership during the past two
years has been a true asset to the AGA, and we are grateful for the
effort he has put into moving the entire industry forward,” said
Frank J Fahrenkopf, Jr., president and CEO of the AGA. “I am
extremely confident that Dick and Jim will provide the AGA with the
guidance and insight to best serve all of our members and help our
industry take advantage of the new opportunities that will avail
themselves in the coming year.”
Additionally, the AGA board welcomed a new
director Adam Rosenberg, managing director and global head of the
gaming group for Goldman Sachs & Co. Mr. Rosenberg previously served
as director-elect and was elected for a one-year term as an at-large
director. He succeeds Robert Heller, managing director and head of
gaming and leisure for the Americas at UBS Investment Bank, whose
term had expired. Richard Byrne, CEO of Deutsche Bank Securities,
Inc., was designated by the AGA board as a director-elect for the
coming year.
Mr. Murren and Mr. Smith were re-elected to
the AGA board of directors for three-year terms, as were Patti Hart,
CEO of International Game Technology, and Gavin Isaacs, CEO of
Shuffle Master, Inc. Larry Ruvo, senior managing director of
Southern Wine & Spirits of Nevada, was re-elected to a one-year term
as an at-large director.
Other current members of the AGA board
include Biran Gamache, chairman and CEO of WMS Gaming Inc.; Gordon
Kanofsky, CEO and director of Ameristar Casinos, Inc.; Nick Khin,
president of the Americas for Aristocrat Technologies, Inc.; Michael
Level, president and COO of Las Vegas Sands Corp.; Gary Loveman,
president, CEO and chairman of Caesars Entertainment Corporation;
Virginia McDowell, president and CEO of Isle of Capri Casinos, Inc.;
Antholy Sanfilippo, president and CEO of Pinnacle Entertainment,
Inc.; and Timothy Wilmott, president and COO of Penn National
Gaming, Inc.
For more information about the AGA, please
visit
www.americangaming.org.
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NCRG Elects Alan Feldman as Chairman of Board
On Monday, January 9, 2012, The National
Center for Responsible Gaming (“NCRG”) announced Alan M. Feldman,
senior vice president of public affairs for MGM Resorts
International, has been selected as the new chairman of the
organizations board of directors. The NCRG board also elected Mark
Vander Linden, executive officer of the Office of Gambling Treatment
and Prevention at the Iowa Department of Public Health, to join as a
board member.
Mr. Feldman replaces Glenn C. Christenson,
managing director of the investment firm Velstand Investments, LLC,
who has served as chairman of the board of directors for three years
and will remain on the board.
“Alan has long been a strong voice in the
gaming industry on issues of responsible gaming and finding
effective methods for addressing gambling disorders. He has an
unwavering commitment to the NCRG,” Christenson said. “I am
delighted to remain on the NCRG board to support Alan’s leadership
as the NCRG continues to address these issues through peer-reviewed
research and public education.”
Mr. Feldman has served on the NCRG board
since 2000. In addition to serving on the Board, he is a board
member of the Nevada Council on Problem Gambling and has previously
served as a member of the Athletes and Addictions Task Force at
Harvard University Medical School, Division on Addictions.
Mr. Vander Linden is the executive officer
of the Office of Gambling Treatment and Prevention, where he
oversees all problem gambling services for the state including
treatment, prevention, workforce development, social marketing and
evaluation. He is also the board president of the Association of
Problem Gambling Service Administrators and holds advisory roles
with the Midwest Consortium on Problem Gambling and Substance Abuse
and the Prairielands Addiction Transfer Technology Center.
“We are excited to have Mark on the NCRG
board, as his experience will lend great insight on the public
health perspective of problem gambling,” Mr. Feldman said. “he has
already been a champion for the NCRG in helping us organize
treatment provider workshops and speaking at the NCRG Conference of
Gambling and Addiction, and we look forward to working with him ore
in the coming years.”
The NCRG board of directors also announced
that it has allocated more than $1.5 million for grants in 2012 to
support research on the prevention and treatment of gambling
disorders. This is the largest amount of funding that the NCRG has
allocated in the organizations 15-year history.
The NCRG board of directors includes
representatives from the gaming industry and the treatment and
regulatory communities. Additional board members include NCRG
President William Boyd, executive chairman of Boyd Gaming
Corporation; NCRG Treasurer and Secretary Judy Patterson, senior
vice president and executive director of the American Gaming
Association; Sue Cox, founding executive director of the Texas
Council on Problem and Compulsive Gambling; Kevin Mullally, general
counsel and director of government affairs for Gaming Laboratories
International; Phil Satre, chairman of International Game
Technology; Jennifer Shatley, vice president of responsible gaming
policies and compliance for Caesars Entertainment Corporation; and
Bruce Shear, president and CEO of Pioneer Behavior Health.
For more information regarding the National
Center for Responsible Gaming, please visit
www.ncrg.org.
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