Monthly Archives: February 2017

One consistent theme for gaming stocks over the past two decades is that growth hasn't been hard to come by. Ever since Steve Wynn opened the Mirage in Las Vegas in 1989, it seemed like the industry was on a tear to build bigger and better casinos around the world. First Las Vegas and Atlantic City were built out, then Macau and Singapore came online, and now there's an East Coast gaming boom.

But growth for casino operators is becoming harder to come by, and that may signal a major shift for the gaming industry. Maybe it's even time for gaming companies to look past growth to returning cash to shareholders?

Macau's skyline at night. Image source: Getty Images.

For most of the 1990s and 2000s, the world's two most important gaming markets were Las Vegas and Atlantic City. Gaming companies rapidly built new casinos, which drew more customers, which led to more casinos being built, and an upward cycle emerged. But in the last decade, the pattern has been a little different.

Gaming revenue in Las Vegas and Atlantic City. Data Source: Las Vegas Gaming Commission and New Jersey Division of Gaming Enforcement. Chart by the author.

As the chart above shows, gaming revenue in Las Vegas has stagnated over the past decade, and Atlantic City's numbers have fallen off a cliff. It's no wonder that no major resort has been built in Las Vegas in six years (the Cosmopolitan, which went bankrupt during construction but opened in December 2010, was the last) and Atlantic City can't even keep new casinos operating. Growth has dried up in both markets.

For many years, gaming companies focused their growth dollars on Macau, where Las Vegas Sands (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN), and MGM Resorts (NYSE:MGM) have all opened properties. But Macau has suffered its own hardships over the last three years.

Data source: Macau Gaming Inspection and Coordination Bureau. Chart by the author.

So, three of the biggest markets in gaming are all experiencing challenges, if not downright collapses. What can the gaming companies do to grow?

When there aren't any big growth markets, gaming companies have gone looking for opportunity in other locales. MGM Resorts recently completed National Harbor near Washington, D.C., and has a resort under construction in Springfield, Massachusetts. Wynn is building a property in Everett, Massachusetts, just outside of downtown Boston; Las Vegas Sands opened Sands Bethlehem in northeastern Pennsylvania.

The problem with all of these resorts is that they're entering, and further diluting, the barely profitable East Coast gaming market. They're also searching for growth in areas where gambling and high-end resorts aren't really a staple, which could be a big risk, long term. The decline of regional gaming was a big reason Caesars Entertainment's largest subsidiary was forced into bankruptcy, and why Foxwoods, Trump, Revel, and Stations Casinos have either had financial trouble or gone into bankruptcy. Yet it's these same regional markets where it has proved difficult to make money that major casinos are building in.

Gone are the days where casino companies could just expand up and down the Las Vegas Strip. That was the tactic that made MGM, Mirage, Mandalay Group, and Caesars Entertainment what they were before they consolidated. So if growth opportunities aren't attractive anymore, it may be time to try another strategy.

Rather than bringing new casinos to markets that aren't all that attractive to begin with, gaming companies could transform themselves into cash flow machines for investors. Las Vegas Sands has started paying a dividend and currently yields 5.6%, while Wynn Resorts pays a more modest 2.1% yield. With growth options limited, paying dividends may be the best use of cash in today's casino business. That's a change from what investors have expected in the past, but today's gaming giants may become tomorrow's dividend aristocrats, given the limited opportunities they have for growth.

Travis Hoium owns shares of Wynn Resorts. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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The Newest Challenge in Gambling: Finding Growth - Motley Fool

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This court ruling is the first time we've seen a big-name YouTuber get properly punished for scamming viewers.

After pleading guilty to gambling charges concerning his ownership of the FIFA video game-focused gambling site FUT Galaxy, YouTube personality Craig Douglas, known online as Nepenthez, has been court-ordered to pay more than 90,000 pounds in fines.

Douglas was first charged with illegally encouraging gambling on the site back in September, a violation of the United Kingdoms Gambling Act and the first video game-related case concerning the law. He had uploaded videos to his YouTube channel showing him using FUT Galaxy to win FIFA Ultimate coins without disclosing that the site was, in fact, his own, and, according to district judge Jack McCarva, he and business partner Dylan Rigby did nothing to discourage children from using it Douglas even said that the site didnt require users to be 18 because this is a virtual currency.

More: Valve starts cracking down on Team Fortress 2 gambling websites

In my opinion, both of you were aware of the use of the site by children and the attractiveness of it to children. At the very least, you both turned a blind eye to it, McCarva said.

Three years ago, Douglas sang a much different tune, saying that minors shouldnt be gambling but that doing so is only on their parents and not the responsibility of outside influencers.

This isnt the first time such a controversy has erupted in the YouTube gaming space. Last summer, popular streamers Tom Syndicate Cassell and Trevor TMartn Martin were caught doing almost the exact same thing via their Counter-Strike: GO gambling website, CSGO Lotto.

Both intentionally misled users into believing that they had simply stumbled upon the site and made several videos showing them winning pots of cash. Cassell has remained almost entirely silent on the subject, while Martin made an apology video, since taken down from his own channel, that attempted to minimize his wrongdoing. Neither Cassell nor Martin has been charged with a crime, but Martin is in the middle of a Florida lawsuit regarding CSGO Lotto. You can find a detailed rundown of their situation as well as Douglas case over at YouTube channel HonorTheCall.

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FIFA gaming YouTuber faces huge fine after pleading guilty to gambling charges - Digital Trends

Did you win any money from your Super Bowl pool?

Congratulations!

Now make sure you report iton your2017 tax return.

Yep. Gambling winnings of any kind are taxable income, and Uncle Sam wants his cut.

So if you had winnings from the Super Bowl, a fantasy league or even the local lotto, make sure you tally them all up with the money made in Vegas last year.

All gambling winnings are reported as "Other Income" on line 21 of your Form 1040.

Your losses, on the other hand, are limited.

You only can deduct your losses to the extent of your winnings, says Nathan Rigney of The Tax Institute at H&R Block.

So if you won $1,000 last year but lost $1,500, you can only report $1,000 in losses.

The other $500 is, well, lost.

And you can't carry those losses back or forward, like you can in other situations, notes Cari Weston, director of tax practice and ethics for the AICPA.

It gets worse. Your losses are reported on line 28 of your Schedule A - Itemized Deductions.

So if you are a high earner, your itemized deductions may be reduced because of the overall adjusted gross income limitation. Then you won't be able to deduct the full amount of your gambling losses.

The good news is that losses from one kind of gambling are deductible against gains from another kind.

So let's say in 2016 you played the lotteryevery week at $10 a pop and didn't win a thing. But you did hit it big at your Church bingo night and won $3,000. Since you had winnings, you at least can take a deduction for the $520 you dropped (wasted) on the lotto.

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How to Handle Gambling Wins and Losses This Tax Season - TheStreet.com

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WASHINGTON, D.C. - A new report from theUnited States Government Accountability Office is recommending that the military screenits members for gambling disorder addiction.

The government watchdog agency released its report on January 31st, noting Department of Defense and Coast Guard"non-medical personnel do not have clear guidance addressing gambling disorder."

According to data from the Department of Defense, "less than 0.03 percent of the average number of service members in each yearwere diagnosed with gambling disorder or were seen for problem gambling in fiscal years 2011 through 2015 in the Military Health System."

While the GAO report acknowledges that figure is low, it stated "without explicitly including gambling disorder in DoD and CG guidance on substance use, DoD and the CG may not being able to identify and provide appropriate treatment and counseling to DoD and CG service members afflicted by gambling disorder and mitigate or prevent individual readiness issues."

The GAO report makes eight recommendations, including that the Department of Defense incorporate gambling disorder questions in a systematic screening process.

In its response, the Department of Defense concurred with recommendations about updating guidance, but did not agree with incorporating questions into ascreening process.

"There is no evidence to suggest that gambling disorder is a high prevalence disorder in the DoD, and it is impractical to screen for every low prevalence disorder," the Department of Defense wrote in comments to the GAO recommendations.

It goeson to saythat there are multiple mental health disorders with similar or higher prevalence such as Bipolar Disorder and Obsessive Compulsive Disorder, which are not routinely screened.

Keith Whyte is the Executive Director of the National Council on Problem Gambling, a non-profit that is neutral on legalized gambling.

"We are neither for nor against, we just want to help people who may have a problem," Whyte told News 3's Todd Corillo Tuesday.

Whyte says the NCPG has been advocating for better screening in the military for the past decade.

"The military surveys of behavioral health used to include gambling addiction questions and those questions were returning rates of up to 5% of active duty troops who were meeting criteria for a gambling problem," he stated.

According to the NCPG, the rate of military members impacted is low now because it is based only on those who seek treatment and not on a general screening.

The NCPG argues that because the military generates revenue from Department of Defense run slot machines overseas, they have a greater obligation to screen service members.

"If you are providing, promoting and profiting from slot machines at overseas bases, youve got a higher ethical and economical obligation to take care of the health of your service members," Whyte argues.

Data in the Government Accountability Office report shows that the Department of Defense generated $538.9 million in revenue from DoD run slot machines on military installations overseas in fiscal years 2011 through 2015.

You can read the entire report from the GAO here:

DOD and the Coast Guard Need to Screen for Gambling Disorder Addiction and Update Guidance

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GAO report recommends military members be screened for ... - wtkr.com

Updated February 08, 2017 14:31:18

People playing poker machines don't expect to win and consider it no different to going to a movie, a hospitality group representative has told Tasmania's gambling inquiry.

A joint select committee, holding public hearings on the Government's gaming policy, was considering the future of Tasmania's poker machine industry along with the economic and social impact.

On the table is a proposal to end Federal Group's monopoly licence to operate electronic gaming machines across the state, the inclusion of a community interest test for new machines, and lowering the cap on how many machines can operate.

The Australian Leisure and Hospitality Group told the inquiry that people who play pokies "don't expect to win".

Greens MP Andrea Dawkins quizzed the group's David Curry on whether gamblers thought they'd win when using the machines.

"Do you think they understand that generally they're not going to win? she asked.

Mr Curry said people did not expect to make a win.

"I don't think people generally expect to win when they play but what they are doing is buying a form of entertainment," he said.

"They are enjoying that form of entertainment, it's no different to me going to the movies - whether it's a good movie or a bad movie - and buying an ice cream."

Tasmanian author and historian James Boyce urged the committee not to ignore the state's two casinos in the debate on whether pokies should exist in pubs and clubs.

Mr Boyce has written a book on the pokies, which is due to be released soon.

"I would plead with you to look at the issue of the casino," Dr Boyce told the committee.

Mr Boyce said as soon as the casino was licensed to operate high intensity poker machines in 1994 it turned into a "giant pokies barn".

"They need to be treated as poker machine venues."

He said the regulation of poker machines was failing vulnerable people, and there was a "tale of two Tasmanias".

"We have this vibrant growth with many things happening in Tasmania, and many people benefiting," he said. "But we have this large group being left behind."

Meanwhile, Dixon Hotel Group director Peter Dixon told the committee pubs in regional areas would struggle to stay viable without the revenue from poker machines.

"We speak from the heart on this, I've had 40 years in this industry and have invested in country areas and I can tell you the vast majority of our places would be broke without the pokies," Mr Dixon said.

"You get into the areas where we deal like Scottsdale, New Norfolk, Longford, Exeter, George Town - most of those venues haven't seen a tourist."

Mr Dixon's group operates 35 pubs, 30 of which are in regional Tasmania.

"The bottom line is they are doing in tough, pokies aren't a big part of the business but that helps us buy."

Topics: gambling

First posted February 08, 2017 14:04:33

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Gambling inquiry: Pokies no different than going to the movies, hospitality group says - ABC Online

News Gaming Business Military Should Screen for Gambling Problems, says Government Report

The Department of Defense should screen military personnel for problem gambling, concludes a report by the Government Accountability Office (GAO).

The watchdog said it was concerned that the DOD had no clear guidance addressing gambling disorders, as it does with other disorders.

The GAO report was requested by Senator Elizabeth Warren, who was concerned that the DOD makes an estimated $100 million a year from slots, while not doing enough to help personnel who might suffer from gambling addiction. (Image: )

It also emphasized that DOD data, which showed that less than 0.03 percent of the average number of service members per year were diagnosed with problem gambling disorder, is likely to be misleading because few sufferers seek treatment directly.

DOD officials stated they do not screen for gambling disorder because they focus on mental health disorders that are high risk to overall readiness, high volume, and have validated measures for assessment, said GAO in its findings. While gambling disorder is not a frequently diagnosed condition, the preoccupation with gambling, financial hardship, and increased risk of suicide can pose a risk to individual readiness.

The report was requested by US Senator Elizabeth Warren (D-MA) in 2015. Following the revelation that the DOD operates some 3,000 slot machines at US military bases across the world, she asked whether further resources were needed to help US servicemen battling gambling addiction.

The slots yield estimated annual revenues of $100 million per year, none of which goes back into funding problem gambling help programs for service members. This is despite the fact that Congress passed a law in 1951 banning slot machines from domestic US military bases.

The report found the machines are found predominantly in US army bases in Japan and Germany, while the Navy has them in Korea, Italy, Spain, Diego Garcia, Greece and Singapore.

If the military is going to operate gambling facilities that bring in tens of millions of dollars in revenue, it also needs to ensure there is adequate prevention, treatment, and financial counseling available for service members struggling with gambling addictions, said Warren.

Responding to the report, the DOD said it disputed the need for screening, although it added that it would amend its policies to promote education and awareness of problem gambling.

There is no evidence to suggest that gambling disorder is a high prevalence disorder in the DOD, and it is impractical to screen for every low prevalence disorder, it asserted.

But this ignores several studies that have indicated the opposite. Recent research by the University of Georgia, for example, found that rates of pathological and problem gambling were much higher than average among veterans, military recruits and current service members.

Research suggests that military personnel are at risk of experiencing negative consequences as a result of gambling related issues such as stress from financial debts, which may have a negative effect on military readiness, the study said.

Furthermore, military and veteran populations are more prone to substance abuse, mental health problems, and suicide, all of which are highly co-morbid with problem gambling.

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Military Should Screen for Gambling Problems, says Government Report - Casino.Org News

If you ever had the overwhelming urge to bet on the primary color of Fox Sports announcer Joe Bucks tie or what Gatorade color will be poured on the winning head coach, then you are probably an avid sports watcher.

These are some prop bets that are popular during the Super Bowl and World Series.

For Super Bowl 51, $4.7 billion was spent on American betting, according to the American Gaming Association. This number is actually an 11 percent projected increase over the 2016 Super Bowl gambling totals, which featured the Denver Broncos and the Carolina Panthers.

However, only an estimated $132 million of that money is going to be spent legally through sports books.

The other $4.5 billion will reportedly be illegally wagered through certain bookmakers and off-shore websites.

Fourth year psychology major Aaron Moszkowicz believes there is a gambling problem in America and prop bets might have something to do with that.

Ive never gambled myself, but obviously gambling can be really addicting, Moszkowicz said. So I feel like people just use the Super Bowl to make dumb bets on whatever they want to and maybe theyll continue to gamble as a result of it.

There was an attempt to thwart sports betting in in the 1990s when the government approved the Professional and Amateur Sports Protection Act, which took effect on Jan. 1, 1993. This law made sports betting illegal in all states except Nevada.

The bill failed and caused the sports gambling problem in America to gradually increase over the past 25 years.

President and CEO of the AGA, Geoff Freeman, believes lifting the ban would help the country in a number of different ways.

A regulated marketplace would generate tax revenues and jobs, Freeman said. Protect consumers and leverage cutting-edge technology to strengthen the integrity of the games we all love.

It seems like a simple solution, but helping those who have a clinical gambling problem may become more difficult as a result.

CSUN psychology professor, Delinah Hurtwitz, believes the Super Bowl and prop bets contribute to the problem of gambling addiction.

Its a gateway drug, Hurtwitz said. Some of the ridiculous prop bets are tempting to the people who are not usually into sports to be able to bet on aspects within the event without actually forcing the person to have any interest in the game itself.

Some of these include a bet on whether Lady Gaga wears an outfit that breaks Twitter and the odds on which brand will win best commercial.

CSUN computer technology major Jacob Ruprecht said the game has become more of a national holiday rather than a sporting event.

I feel like its becoming less and less about the game and more and more about the commercials and the halftime show, Ruprecht said.

Last years Super Bowl saw the third largest audience of all time with an average of 111.9 million people, according to CNN. source

Hurtwitz explained the signs in which you may be suffering from a gambling problem.

It comes down to whether or not they are ignoring their basic human needs in order to gamble or do something that involves gambling, Hurtwitz said. For example if someone were to get up for work in the morning and play online poker instead of taking a shower in the morning or brushing their teeth then its becoming a problem.

According to the Gambling: Help and Relief website, other signs of a gambling addiction are: feeling the need to hide your gambling from others, gambling to forget, stealing or committing fraud to gamble, and gambling out of necessity among others.

People who believe they have a gambling problem can call the National Gambling Helpline at 1-800-522-4700 or go to http://www.npcgambling.com/chat.

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Dangers of sports gambling - Daily Sundial