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Good morning, and welcome to the Indy Gaming newsletter, a weekly look at gaming matters nationally and internationally and how the events tie back to Nevada.
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On the same afternoon that Rep. Dina Titus (D-Las Vegas) toured the Henderson offices of U.S. Integrity, Iowa gaming authorities exposed a sports wagering scandal involving athletes from the University of Iowa and Iowa State University.
It’s that type of suspicious activity the company works to uncover.
U.S. Integrity, which monitors wagering activity from 94 legal sportsbooks nationwide, gained attention in late April when it flagged unusually large wagers placed on an obscure college baseball game between the University of Alabama and Louisiana State University at a Cincinnati sportsbook. Alabama’s since-fired baseball coach was implicated in the scandal.
“Those are the ones that tend to get people a little upset because [coaches] are supposed to be mentors,” U.S. Integrity CEO Matthew Holt said of the illicit activity in an interview last week.
The company wasn’t initially involved in the Iowa matter, where seven athletes from the two schools are suspected of violating NCAA rules by betting on college sports over two years. Holt said U.S. Integrity is now helping in the follow-up.
Titus, who co-chairs the Congressional Gaming Caucus, was drawn to the company through responses to letters she sent in June requesting clarification on sports betting policies from the leadership of 13 professional sports organizations, including the NFL, NBA and WNBA, NHL and Major League Baseball, as well as groups representing tennis, golf, motorsports, soccer and combat sports and the NCAA.
Titus asked specific questions about intended actions to preserve the integrity of their sports and maintain full transparency surrounding betting policies. Her office has received several responses to the letter, with leagues outlining their efforts in working with the sports betting industry, state gaming regulators and monitoring firms such as U.S. Integrity.
“Many of the leagues we’ve reached out to said they don’t have a problem because they’re using an outside independent regulator,” Titus said following a presentation by Holt and his staff on how the company investigates legal sports wagering activity.
“We wanted to hear about what [U.S. Integrity] is doing, is it really taking care of the problem and how can we work with them and make it better,” Titus said.
Sports betting is legal and regulated in 34 states and Washington, D.C., with four more states expected to launch operations this year.
Holt said every state, except Nevada, has integrity mandates built into their laws. The company launched in 2018 in New Jersey, Pennsylvania, Delaware and Mississippi — the first four states to legalize sports betting after the U.S. Supreme Court overturned the federal ban on the activity.
Holt said the company has a memorandum of understanding with the Nevada Gaming Control Board to help police any in-state wagering integrity issues.
“We have a wonderful relationship with the folks over there,” Holt said.
Titus has long advocated on behalf of Nevada’s legal sports betting industry. In March, she and the gaming caucus reintroduced legislation to repeal the sports betting handle tax, an effort she began in 2014 when Nevada was the only state with legal sports betting.
Last year, Titus and the gaming caucus sent a letter to the U.S. Department of Justice requesting that the federal agency make a concerted effort to scrub illegal and unregulated offshore sportsbooks off the internet.
According to ESPN, one response to her recent letter came from NCAA President Charlie Baker, who disclosed that the NCAA has seen 175 sports betting violations since 2018.
“I agree with you that in addition to the opportunities it creates, sports betting brings risk that could undermine the integrity of competition,” Baker wrote to Titus.
On Friday, the NFL responded to the letter by summarizing steps the league has taken to safeguard game integrity in light of expanded sports betting.
The four-page letter signed by Jonathan Nabavi, the NFL’s vice president of public policy and government affairs, reiterated calls for the federal government to crack down on illegal offshore sportsbooks and illegal gaming operations.
“Congress and the federal government have a unique role to play in bringing enforcement actions against illegal operators,” Nabavi wrote. “We believe that additional attention and resources are needed from lawmakers and law enforcement to address the illicit sports betting market.”
Titus said the NFL’s letter didn’t directly answer her questions.
“That’s why I wrote to all the leagues asking for information on their internal policies concerning betting, including education and enforcement,” Titus said. “It’s very disappointing that the NFL has declined to answer our questions and instead pivoted to illegal sports betting generally in their response. It makes one wonder what they are trying to hide.”
The NFL’s letter, first reported by ESPN, outlined the league’s anti-sports wagering policy for players, coaches and NFL personnel. It did not discuss the suspensions of 11 players over the last two years for violating the gambling policy.
Coming off a record quarter, MGM lauds potential of neighboring ballpark
After reporting second-quarter revenue of $3.9 billion — the highest figure for a three-month period in the company’s history — MGM Resorts International CEO Bill Hornbuckle described loftier projections for the rest of 2023.
He said room reservations at the company’s nine Las Vegas Strip resorts for the mid-November Formula One race are double normal prebooking hotel occupancy. Hornbuckle said 70 percent of the company’s ticket inventory for the three-day Las Vegas Grand Prix has already been committed.
“A portion of these tickets will go to our gaming customers and early front money and credit data suggest that Formula One is shaping up to be an all-time record casino event for the company,” Hornbuckle told analysts on MGM’s quarterly conference call last week.
He added that MGM’s Strip properties will soon receive an additional lift.
Hornbuckle said construction of a 30,000-seat Major League Baseball stadium “literally in our front yard” on the Tropicana Hotel and Casino site places the amenity within walking distance of some 13,000 MGM-operated hotel rooms.
“That should drive over 400,000 new tourists,” Hornbuckle said of the planned $1.5 billion ballpark that would serve as the new home of the relocated Oakland A’s.
Combined with the neighboring 65,000-seat Allegiant Stadium and the 18,000-seat T-Mobile Arena, he noted “three professional sports teams … are directly adjacent to one or more of our properties with a possibility for multiple events on the same day. It’s clear that Las Vegas has become the world’s premier sports and entertainment destination.”
It’s the first time that MGM executives have made public comments about the A’s stadium prospects. During the Legislature’s special session in June to allocate up to $380 million to help construct the ballpark, sources said MGM worked behind the scenes in support of an amendment that tied the venue to the Tropicana site.
Analysts previously touted how the ballpark would benefit Strip gaming companies, but it particularly stands to benefit MGM Resorts, which has five properties — MGM Grand Las Vegas, New York-New York, Excalibur, Luxor and Mandalay Bay — directly across from the Tropicana with Aria and Park MGM just a few blocks away.
While MGM Resorts isn’t paying for the stadium, Hornbuckle said he expects the company will make upgrades at its properties ahead of the ballpark’s anticipated 2028 completion. The 5,000-room MGM Grand is celebrating its 30th anniversary later this year. He said the areas inside the resort need some improvement but the main entrance from the Strip will be a focal point.
“[MGM Grand] needs some love anyways,” Hornbuckle said. “We’re not pleased about the way it all connects right now, so we’d like to work on connectivity on that corner.”
Pedestrian overpasses connect visitors to the street corners at the Strip and Tropicana Avenue intersection in all directions.
“We’d like to think our front door could be enhanced and I know it can,” Hornbuckle said. “This will be a catalyst to that dialogue. We do think there’s an opportunity there.”
Durango Station to be Las Vegas’ first all-new locals resort in more than a decade
The last time Las Vegas saw the opening of a casino-hotel targeted to locals was 14 years ago when the 390-room M Resort opened in Henderson. Since then, four locals-oriented properties have closed, including three operated by Red Rock Resorts.
The company announced last week it will open the $780 million Durango Casino and Resort on Nov. 20, some 20 months after starting construction on the 201-room development in southwestern Las Vegas near the 215 Beltway.
In the past year, Red Rock demolished and sold the land for Texas Station and Fiesta Rancho in North Las Vegas and the Fiesta in Henderson to concentrate efforts on other development sites throughout the Las Vegas Valley.
The opening of Durango, which is the only major casino to serve 250,000 adults within a five-mile radius, kicks off a development program that could double Red Rock’s Las Vegas footprint by 2030.
The company surprised analysts by announcing the opening date during its second-quarter earnings conference call last week. The Monday night opening will follow the hoopla of the preceding weekend’s Las Vegas Grand Prix and kick off the Thanksgiving holiday.
Red Rock Vice Chairman Lorenzo Fertitta said it wouldn’t be a soft opening.
“When we open properties, every aspect of the property is open, ready to go,” he said. “We’ll open the doors and let in customers, so it will be full on that day.”
Fertitta said sight design work has already started on a second phase of the resort, but a timeline hasn’t been created.
When the Durango project broke ground on a 50-acre site, the resort had a price tag of $750 million. Red Rock increased the budget by $30 million in May when the company decided to expand the 83,000-square-foot casino floor to add a mix of 360 additional slot machines and table games.
The hotel-casino will have 15 dining establishments that include four full-service restaurants and a 25,000-square-foot food hall. The property will have 20,000 square feet of convention and meeting space and a spacious resort pool area.
Durango faces a competitive labor market given the planned openings of The Sphere in September and the December opening of Fontainebleau Las Vegas.
Red Rock Resorts President Scott Kreeger said the company has completed hiring workers from the company’s six other properties and will launch an external hiring effort next week.
“We feel confident that we’re going to be able to fill our needed employment,” Kreeger said, adding the company “right-sized” employee pay ranges and benefits.
“We knew this was coming and we got ahead of this probably well over a year ago,” Kreeger said.
Quotable
Via second-quarter earnings conference call from DraftKings
DraftKings has sports betting operations in 21 states, but not in Nevada. CEO Jason Robins said last week the company would like to offer sports betting in the state, but the lack of remote registration, where customers don’t have to come into a casino to open an account, keeps the operator on the sidelines.
“There’s a robust sports betting market there. It’s an important state because people go there who are our customers and they want to be able to make bets. I think being able to give them that option as well as to be able to access the Nevadans that are now betting with others and would like to try DraftKings is definitely something that we’re exploring.”
– Jason Robins, CEO, DraftKings
Via press release from Nevada State AFL-CIO
The Oakland A’s are the title sponsor for the union’s weekend convention at Grand Sierra Resort in Reno. The Nevada AFL-CIO, along with union representatives, testified in support of legislation passed and signed by Gov. Joe Lombardo to provide the A’s with up to $380 million in public financing for the construction of a $1.5 billion, 30,000-seat stadium in Las Vegas. The A’s previously signed a project labor agreement with the Southern Nevada Building Trades covering the stadium and has an agreement with Culinary Workers Local 226 to organize the ballpark’s employees.
“As a labor leader, my priority has not just only been to look after our members but to support our community as a whole. That’s why I’m thrilled that the Athletics are working with us to ensure that future generations of Nevadans have access to opportunities that will help them lead successful lives and contribute to our workforce.”
– Susie Martinez, executive-secretary treasurer, Nevada State AFL-CIO
Via press release from MGM Resorts International
More than a year after acquiring the operations of The Cosmopolitan of Las Vegas for $1.6 billion, MGM Resorts International announced plans to merge the hotel-casino into its rewards program. Customers who have been part of the one-off resort’s loyalty program will transfer to the MGM customer rewards system on Feb. 1, 2024. In addition to its Strip properties, MGM has properties in seven other states that honor the company’s loyalty program: Maryland, Massachusetts, Michigan, Mississippi, New York and Ohio.
“Welcoming The Cosmopolitan into MGM Rewards is an important and exciting milestone in the evolution of our loyalty program experience. The Cosmopolitan will add an entirely new set of ways for gaming and non-gaming customers to enjoy all of the unforgettable, exceptional moments MGM Resorts and Las Vegas have to offer.”
– Steve Zanella, chief commercial officer, MGM Resorts
Via press release from Empire Technological Group
Gaming equipment provider Play Synergy was licensed by Nevada gaming regulators last month. The licensing comes as Play Synergy looks to acquire the slot machine and online gaming businesses from bankrupt Aruze Gaming America. The deal was approved by the U.S. Bankruptcy Court and is expected to close next month. Play Synergy is seeking ownership of other Aruze businesses, including its overseas operations.
“These two accomplishments propel us to an exciting new level in this competitive space. A Nevada gaming license is a key and indispensable component of any supplier’s ability to establish a leadership position in our industry.”
– Frank Feng, president, Play Synergy
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