Posts Tagged ‘gaming’

Parx Casino to PA Gaming Control Board: One Skin Per Licensee

 Parx Casino to PA Gaming Control Board: One Skin Per Licensee

First reported by GamblingCompliance (paywall alert), the Parx Casino has written a letter to the Pennsylvania Gaming Control Board (PGCB), requesting that online gaming license holders only be allowed to have a single skin.

The letter sums up the request as so:

The Board should establish a limitation on the number of interactive gaming skins an Interactive Gaming Certificate Holder (“Certificate Holder”) may operate, and that limitation should be one skin per Certificate Holder, with the different categories of interactive games the Certificate Holder is authorized to offer on that single skin limited to the different categories of interactive games approved in its Interactive Gaming Certificate(s).

As it goes on to explain, Parx seems to not like the idea of multiple (or even unlimited) skins per license holder because it supposedly does a few things: 1) effectively puts the license holder in the role of regulator over the operators who run the skins, 2) allows software providers to effectively become online gaming licensees for less money than the license holder, and 3) essentially renders the ceiling on Pennsylvania online gaming licenses (currently twelve, soon to be thirteen) meaningless.

Parx Casino also wants the PGCB to require that each online gaming site go by the same name – or similar name – as its license holder. Thus, Parx Casino’s online poker site would have to be ParxPoker, SugarHouse Casinos’ site would have to be SugarHousePoker, and so on and so forth, or at least names that resemble the casino/company that holds the license.

“The Board should require that any branding associated with a skin match, or be predominantly the same, as the brand of the Certificate Holder as noted on the Interactive Gaming Certificate,” is how it is worded in the letter, with little additional explanation.

One could surmise that the reason Parx Casino wants these rules in place is to limit competition. Parx is the casino market leader in Pennsylvania with about 18 percent of the market share as of December 17. Sands Bethlehem is close behind with over 17 percent. As said market leader, Parx probably wants to keep its brand name strong and allowing multiple skins per license holder could dilute that brand.

On top of that, it would prevent a license holder from partnering with, say, PokerStars as its software platform provider and then branding its poker site something like PokerStarsPA.com. PokerStars obviously has gigantic name recognition in the online poker world and Pennsylvania players very well may gravitate toward a Stars-branded site rather than a Parx-branded one, even though Parx is the brick-and-mortar market leader.

Online casino games and slots will likely be bigger money makers than online poker, but a Stars-branded site could possibly even do better than Parx in that realm, too (keep in mind, I am just speculating). Whether its Stars or any number of other experienced operators, Parx does not want others infringing on its territory if it can help it.

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UK Regulator Settles on Agreement with Gaming Operators Over Unfair Deposit Bonus Practices

 UK Regulator Settles on Agreement with Gaming Operators Over Unfair Deposit Bonus Practices

The United Kingdom’s Competition and Markets Authority [CMA] announced last week that three online gambling operators who were under investigation for unfair promotional practices have agreed to change said practices to make them more consumer-friendly. The three operators – Ladbrokes, William Hill, and PT Entertainment – have all signed documents laying out what will now be expected of them.

The issue at hand has to do with deposit bonuses and how they are promoted and marketed. Anyone who has played online poker or tried their hand at online casino games in the past decade and a half (at least) is familiar with the banner ads: “Deposit $ 100 Get $ 100 Free!” or “25% Deposit Match up to $ 1,000!”

Of course, it is not as simple as that. There are playthrough requirements, withdrawal restrictions, and more. And that’s where the CMA’s problem with the gaming operators lies. When it launched an investigation last June, the CMA was concerned that “people often don’t get the deal they are expecting as the promotions come with an array of terms and conditions that are often confusing and unclear and, in some cases, may be unfair.”

The press release at the time continued:

Customers might have to play hundreds of times before they are allowed to withdraw any money, so they don’t have the choice to quit while they’re ahead and walk away with their winnings when they want to.

Even when players haven’t signed up for a promotion, there are concerns that some operators are stopping customers taking money out of their accounts. The CMA has been told by customers that some firms have minimum withdrawal amounts far bigger than the original deposit, or place hurdles in the way of them withdrawing their money.

“We know online gambling is always going to be risky, but firms must also play fair. People should get the deal they’re expecting if they sign up to a promotion, and be able to walk away with their money when they want to,” CMA Senior Director for Consumer Enforcement Nisha Arora said.

“Sadly, we have heard this isn’t always the case. New customers are being enticed by tempting promotions only to find the dice are loaded against them. And players can find a whole host of hurdles in their way when they want to withdraw their money.”

The bottom line of the agreement with the operators is that all playthrough requirements – the amount of gambling that is required to earn a bonus – must be very clear and easy to access before a player signs up and while the person is playing. Additionally, players must be able to cash out their original deposit whenever they would like.

The CMA’s summary of the rules is as follows:

• Players won’t be required to play multiple times before they can withdraw their own money
• Gambling firms must ensure that any restrictions on gameplay are made clear to players, and cannot rely on vague terms to confiscate players’ money
• Gambling firms must not oblige players to take part in publicity

UK Gambling Commission Executive Director, Sarah Gardner, chimed in:

We back the action taken by the CMA today. Gambling firms must treat their customers fairly and not attach unreasonable terms and conditions to their promotions and offers.

We expect all Gambling Commission licensed businesses to immediately review the promotions and sign up deals they offer customers and take whatever steps they need to take, to the same timescales agreed by the three operators, to ensure they comply.

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Online Poker Bill Passes New York Senate Gaming Committee

 Online Poker Bill Passes New York Senate Gaming Committee

If at first you don’t succeed…you know how it goes. Such is the case in the New York state legislature, where for the third consecutive year, a bill which would legalize and regulate online poker has made it through the Senate Racing, Gaming, and Wagering Committee. S3898 passed easily by a 10-1 vote and now moves on to the Senate Finance Committee.

There was significant movement with the bill last year, as it not only made it out of the Racing, Gaming, and Wagering Committee, but also the Finance Committee and then passed a vote of the full Senate in mid-June. Despite having half the year to get through the Assembly, it never even made it out of committee there. And it’s not even that it lost a vote; the Assembly really just didn’t bother with it.

One would think that it would move fairly quickly this time, as it is the same bill as last year. It was introduced around this time in 2017, getting through the first committee and reported to Finance in mid-February. Now, I don’t know what Senate schedules look like and there are certainly more pressing issues in Albany, New York than online poker, but it wouldn’t be difficult to envision lawmakers shuttling S3898 through the process in a hurry to get it over to the Assembly with as much time left in the year as possible.

Most of the bill is standard fare, but shortly before the full Senate vote last year, the dreaded “bad actor” clause was added. This type of clause, which has been seen in other online poker legislation, punishes operators who continued to accept U.S. players after the Unlawful Internet Gambling Enforcement Act was passed in 2006. Some bad actor clauses outright ban these operators, while others delay their licensing application or assess fines.

The bad actor clause in the New York legislation says that, among others, this factor may be looked like by the New York Gaming Commission when evaluating the suitability of an applicant:

(f) Whether the applicant:

(i) has at any time, either directly, or through another person whom it owned, in whole or in significant part, or controlled:

(A) knowingly and willfully accepted or made available wagers on interactive gaming (including poker) from persons located in the United States after December thirty-first, two thousand six, unless such wager were affirmatively authorized by law of the United States or of each state in which persons making such wagers were located; or

(B) knowingly facilitated or otherwise provided services with respect to interactive gaming (including poker) involving persons located in the United States for a person described in clause (A) of this subparagraph and acted with knowledge of the fact that such wagers or interactive gaming involved persons located in the United States; or

(ii) has purchased or acquired, directly or indirectly, in whole or in significant part, a person described in subparagraph (i) of this paragraph or will use that person or a covered asset in connection with interactive gaming licensed pursuant to this article.

It does not appear that this bad actor clause is of the strictest variety, as it does not say that such an operator would be automatically deemed ineligible to receive an online gaming license. Rather, an operators actions after the UIGEA should be considered by the Commission.

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Penn National Gaming to Acquire Pinnacle Entertainment for $2.8 Billion

 Penn National Gaming to Acquire Pinnacle Entertainment for $2.8 Billion

Penn National Gaming announced Monday that it has agreed to acquire Pinnacle Entertainment for $ 2.8 billion in combined cash and stock. Pinnacle shareholders will receive $ 20 per share of Pinnacle plus 0.42 shares of Penn National stock for each Pinnacle share they own. The implied price per share is $ 32.47, a 36 premium for Pinnacle based on the company’s closing price on October 4th.

Penn National CEO Timothy Wilmott did some of the usual corporate cheerleading-speak in a press release:

The combined company will benefit from enhanced scale, additional growth opportunities and best-in-class operations, creating a more efficient integrated gaming company. Going forward, we will have the financial and operational flexibility to further execute on our strategic objectives, while maintaining our track record of industry-leading profit margins and generating significant cash flow to reduce leverage over time. We look forward to welcoming Pinnacle’s talented employees to our team and to further enhancing our status as North America’s leading regional gaming operator.

Anthony Sanfilippo, Chariman and CEO of Pinnacle, also had some things to say:

Pinnacle shareholders will receive immediate value from the cash consideration, as well as participation in the longer-term growth of Penn National that we expect will occur from the integration of two great companies into a more efficient, larger-scale gaming entertainment platform. We are also pleased that Boyd Gaming will be acquiring our Ameristar properties in St. Charles and Kansas City, along with Belterra Casino Resort and Belterra Park. We look forward to working closely with Penn National and Boyd to seamlessly transition the Pinnacle businesses to their respective new owners.

As Sanfilippo mentioned, Boyd Gaming – mostly notable the owner of the Orleans, Gold Coast, and Fremont casinos in Las Vegas – is buying four of Pinnacle’s casinos in the deal. The purchase will be made from Penn National after the initial acquisition is completed. Boyd Gaming will pay $ 575 million in cash for the properties.

Both Penn National and Pinnacle Entertainment are “regional” gaming companies, focusing on smaller casinos, mostly in places other than Las Vegas and Atlantic City. That doesn’t mean none of their properties are in gaming hotbeds. Penn National owns the Tropicana in Las Vegas as well as the M Resort in Henderson, Nevada. Its casinos mostly concentrate in Mississippi and the Midwest; Hollywood Casino is one of Penn National’s main brands.

Going into the deal, Pinnacle owned sixteen casino properties in the U.S., though of course four of those will be going to Boyd Gaming. Pinnacle also focuses on the Midwest, Mississippi, and Louisiana. It is (was, I guess) the owner of the Ameristar casino chain.

The boards of both companies have already approved the deal, but it still needs approval from shareholders and gaming authorities. Assuming all goes as planned, the transaction is expected to close in the second half of 2018.

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Pennsylvania Online Gaming Has Passed, But Will Online Outlets Join Them?

 Pennsylvania Online Gaming Has Passed, But Will Online Outlets Join Them?

After more than a year of haggling over the details, the state of Pennsylvania passed online gaming, poker and DFS regulations for its citizens. While the passage of that bill was a watershed moment that brings to four the number of states with such legislation, the question now is when will it go live. Although state legislators are looking to move quickly on the issue, there are questions regarding the taxation that could keep suitors away from Pennsylvania’s burgeoning online gaming industry.

In a report prepared by Moody’s Investors Service, which provides financial bonds research for investors and other companies, the taxation rate for slots segment of the Keystone State’s online gaming industry could scare off some suitors. The rate of 54% is much higher than the rate that states such as New Jersey (16%) and slightly higher than that in Delaware (43.5%). Such heavy taxation could be anathema to online gaming operators, who would be looking to make more of a profit from the games than not even 50% of their “win.”

And what effect would that massive tax bill on casino gaming have on those who want to enter for online poker? While they continue to indicate that they want to be a part of the industry, companies like 888 Holdings (888Poker), The Stars Group (PokerStars) and partygaming (partypoker) might not want to invest heavily with either a poker or a casino gaming operation in a market that they won’t see a suitable return.  

For now, the big question is when the clock starts ticking on just getting the licenses handed out. Although Governor Tom Wolf signed the bill into law at the end of October, the Pennsylvania Gaming Control Board hasn’t yet started the clock on accepting applications for online gaming licenses. Currently the PGCB is putting the final changes on the regulations themselves, pushing back further the opening of the Pennsylvania online gaming industry.

Once the PGCB opens the licensing process, those casinos inside the state will get first crack at the three levels of licensing. Those three licenses – for slots, table gaming and poker – will be available for a $ 4 million price tag for individual license. If an entity were looking to get all three, then the “hometown discount” would be $ 10 million for all three. The time frame for those companies already located in Pennsylvania will be 90 days from the date the PGCB opens for business.

After that 90-day period, outside operators would then be allowed to apply. They wouldn’t receive the discount price for all three licenses, instead they would be charged at the $ 4 million per license price. That process would run for 120 days, making for a grand total of 210 days – seven months – before just the licensing procedures would be complete. Looking at the calendar today, that would mean that just the licensing process would take until the beginning of July 2018.

Once the licensing process is complete, then the actual testing process for the different gaming software would have to be completed. If the PGCB was expedient in its review process, it is conceivable that it could take 30 days before online gaming would be opened in the state. Playing on the conservative side, let’s say it takes 90 days for them to complete their testing. That now makes it October 2018 before the first bets can be taken in the state of Pennsylvania.

Although online gaming and poker are now the law in the home of the Steelers and the Eagles, it isn’t going to be anytime soon that the games start. Hopefully within that time, state regulators will consider joining with the other three states that have online poker regulations – Nevada, New Jersey, and Delaware – and join that compact to fully maximize the abilities of the online poker segment of the industry. With 2018 around the corner – and several states examining the online gaming and poker question – a fully functioning and profitable Pennsylvania market would encourage others to join the party.

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