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State of the Union: Colorado, Nevada, MGM and more

Insight | Analysis

This week’s state of the Union, in partnership with Segev LLP, covers the launch of sports betting in Colorado, restrictions on Nevada casinos when they reopen after a lockdown that has lasted since March and the latest quarterly results from MGM Resorts.

Legal sports betting begins in Colorado

Legal wagering came to Colorado on May 1, with four operators  launching, while a further tranche of licenses were handed out at yesterday’s Limited Gaming Control Commission meeting.

By the end of the day, DraftKings – in partnership with Twin River’s Golden Mardi Gras Casino – will roll out a mobile app and website. FanDuel, meanwhile, will launch a website in partnership with Golden Gates Casino, another Twin River property.

Roar Digital, the joint venture between MGM Resorts and GVC Holdings, will roll out a betMGM branded site under the master license awarded to Triple Crown Casinos’ Midnight Rose Hotel and Casino.

Nevada casinos limited to 50% occupancy after reopening
Casinos in Nevada must limit the number of players in their facilities and at gaming tables in order to prevent transmission of novel coronavirus (Covid-19) when they reopen following a statewide lockdown.

In order to open, casinos must create and put into place a plan to prevent the spread of Covid-19 and other infectious diseases at their facilities.

For casinos, occupancy limits will be halved in order to increase the distance between players and slow the spread of the virus.

MGM revenue falls but property sales increase profits in Q1
MGM Resorts’ revenue fell 29.1% to $2.25bn for the first quarter of 2019 due to the effects of the novel coronavirus (Covid-19), but the operator’s profits skyrocketed due to sales of two of its properties.

Bill Hornbuckle, who has served as acting chief executive and president of MGM Resorts since Jim Murren stepped down after the operator announced its 2019 results, said the business had been doing well before the impact of the virus was felt.

“The year started strong with results ahead of expectations, however the COVID-19 pandemic resulted in the closure of our properties which had a material negative impact on our first quarter results,” Hornbuckle said.

WV igaming market could be live by July
The West Virginia Lottery Commission has approved emergency rules for online gaming in the state, with director John Myers revealing that operators could be up and running as early as June or July.

The emergency rules were approved by the Commission at a meeting on 29 April, and will now be filed by the West Virginia Secretary of State’s Office by 15 May.

The Secretary of State would then have 42 days to approve or reject those roles, Lottery director John Myers told iGB.

OK AG: Governor lacked authority to strike tribal compacts
Oklahoma Attorney General Mike Hunter has issued an official opinion stating that Governor Kevin Stitt lacks authority to agree compacts with Indian gaming tribes that authorize gaming activity, namely sports betting, prohibited by state law.

Hunter, who first questioned the validity of the new compacts with the Otoe-Missouria Tribe and the Comanche Nation late in April, has therefore asked Secretary of the Interior David Berhardt to reject the agreements. The Interior Department must ratify the compacts before they can come into force.

The new compacts aimed to allow each tribe to significantly expand the range of Class III games they could offer, including betting on a range of sports. However, the State-Tribal Gaming Act only allows state officials to agree compacts for products not prohibited under state law.

Impairment charges hit Penn National bottom line in Q1
Penn National Gaming (PNG) has posted a loss of $608.6m for the first quarter of 2020, primarily due to impairment charges and the shutdown of its casinos due to the novel coronavirus (Covid-19) outbreak.

Revenue for the three months to March 31, 2020, amounted to $1.12bn, down 13.0% from $1.28bn in the same period last year.

Wynn slips to loss in Q1 due to Covid-19 closures
Casino operator Wynn Resorts has put a net loss of $402.0m in the first quarter primarily down to the temporary closure of its sites in the US and Macau due to the novel coronavirus (Covid-19) pandemic.

Operating revenue for the three months to March 31, 2020, amounted to $953.7m, down 42.3% from $1.65bn in the corresponding period last year.

Mobile horse race betting to launch in Michigan
The Michigan Gaming Control Board has approved online and mobile betting on advance deposit horse racing after a new order from executive director Richard S. Kalm.

The order follows an amendment to the state’s horse racing laws made in December 2019, allowing for third party companies to offer wagering on live and simulcast pari-mutuel racing.

Impairment expenses push CDI to loss in Q1
Churchill Downs Incorporated (CDI) has posted a net loss of $23.4m for the first quarter of 2020, primarily due to write-downs of business assets.

Net revenue in the three months to March 31, 2020, amounted to $252.9m, down 4.7% year-on-year from $265.4m in the corresponding period in 2019.

CDI saw the biggest drop within its gaming business, with revenue down 12.4% to $149.1m, as the operator was hit by the closure of its gaming properties as a result of the novel coronavirus (Covid-19) outbreak.

Loto-Québec begins reopening of lottery retail network
Canadian provincial lottery operator Loto-Québec has begun to resume retail sales of its lottery product at certain venues throughout Québec.

Beginning yesterday (4 May), Loto-Québec reopened sales terminals at retailers with an outdoor entrance.

However ticket sales at retailers located in shopping centres, including via lottery kiosks, remains suspended until further notice as a result of the novel coronavirus (Covid-19) pandemic.

CANJ and AtlantiCare collaborate on reopening NJ casinos
The Casino Association of New Jersey (CANJ) and healthcare system AtlantiCare will work together to create a “comprehensive plan” to reopen casinos in Atlantic City once New Jersey’s stay-at-home order is lifted.

AtlantiCare will share regional healthcare metrics, data, and forecasts with Atlantic City casinos and advise CANJ as it develops reopening protocols.

In addition it will provide information about best practices it has adopted within its own facilities and assist with potential collaboration with other healthcare providers.

Nascar sets out plans to resume racing on May 17
Organizers of the Nascar motor-racing series have announced plans to resume racing on 17 May with a Nascar Cup Series event at the Darlington Raceway in South Carolina.

The 400-mile race will be held without fans in attendance and will be Nascar’s first on-track action in more than two months after the series was suspended in March due to the novel coronavirus (Covid-19) pandemic.

The Darlington event will be the first of seven races over an 11-day span at two different race-tracks throughout May, with all other races set to take place at the Charlotte Motor Speedway in Concord, North Carolina.

Illinois announces latest extension to gaming shut-down
The Illinois Gaming Board has once again extended the suspension of all brick-and-mortar gaming activity in the state as a result of novel coronavirus (Covid-19).

For the latest extension, however, the state regulator has not set a date at which the suspension will end.

This covers all video gaming operations across all licensed establishments, and all casino gambling operations until further notice.

DraftKings launches online casino in Pennsylvania
Real money gaming and fantasy sports operator DraftKings has announced the launch of its new online casino product in the state of Pennsylvania.

Launched in partnership with Hollywood Casino, an affiliate of Penn National Gaming, the product is accessible via the DraftKings sportsbook mobile app.