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Political Chill Pill for Commercial Gambling in Texas?

political_chill_pill_for_commercial_gambling_in_texasBills are making their way through House committees and support for expanded gambling venues and sports betting in Texas is at an all-time high. However, Lt. Gov. Dan Patrick is the president of the Senate and he has no appetite for legalized gambling in the state – unless it is a Republican idea with broad GOP support in the Senate.

The Texas House State Affairs Committee recently approved two bills to be sent to the floor of the House for a vote, opening a path for them to be acted on by the Senate and potentially signed into law by the Governor. Governor Abbot has had a sort of fluid response to the issue of expanded gambling – once “wholeheartedly” opposed to it, then open to letting voters decide, and now seemingly leaning more toward sportsbetting but not too excited about casinos.

Charlie Geren (R-Fort Worth) saw his House Joint Resolution (HJR) 155 approved first and then Rep. John Kuempel’s (R-Seguin) saw his House Bill (HB) 2843 make it through the committee as supporting legislation. The companion bills would authorize destination casino resorts in limited numbers and at specific locations based on the population if Texas voters approve of the idea.

Bills Would Allow Voters to Decide

The bills lay out important frameworks for liberalized gambling in the state which is currently illegal and only allowed grudgingly on Native lands that the state has no control over. The legislation would simply allow voters in Texas to approve a constitutional amendment in November that would allow commercial gambling.

The current bills would allow for two casinos in the Dallas and Fort Worth area along with six others elsewhere in the state.

Some reports indicate that at least 75% of Texans favor being given the choice to decide for themselves. That doesn’t mean that three-quarters of all voting residents favor casino gambling or sports betting, only that they want to decide the issue for themselves.

Rep. Jeff Leach (R-Plano) got his mobile sports betting bill through the committee as well as a separate piece of legislation. This law would set a licensing fee of half a million dollars for mobile sportsbetting sites and levy a 10% tax on revenues.

In a March hearing on the Leach bill, the lawmaker said it would advance “freedom and liberty” in the state and empower tax collectors to make money for the state on an activity that already goes on anyway.

“There are hundreds of our constituents — citizens of all ages, including minors — who right now, especially with March Madness, are placing unsafe, <sic> unsecure, illegal, criminal bets very easily,” Leach said.

Multiple local media outlets reported earlier this week that Texas Lt. Governor Dan Patrick was making the rounds on state broadcasting networks to make the case against any gambling bills lawmakers might be entertaining. According to his own words, it’s not so much a matter of whether or not Texans want to choose, but which side of the aisle the bills originate from or at least who supports them.

Lt. Gov Claims There is No Support for Voter Choice in Senate

According to Texomashomepage.com, the Senate president took a swipe at the House efforts saying there was “zero support” for the idea in the Senate even though one of his top allies in the Senate, a Republican, is sponsoring Senate Joint Resolution 39 – a constitutional amendment to allow sports betting if voters were to approve it during the next election.

“Our members have been clear: they’re not in support today. We don’t have any votes in the Senate,” Patrick said. “Couldn’t find one Senator who supported it.”

Playing partisan hardball, Patrick reportedly said: “Unless I have 15 to 16 Republicans, meaning it’s a Republican-driven bill because we’re a Republican-driven state, I’m not bringing a bill to the floor,” he said. “I need Republican consensus otherwise, it’s a Democrat bill.”

The Lt. Governor’s political posturing has not slowed down the push to let the people decide and it hasn’t dampened the drive to get the business taken care of. The Texas Destination Resort Alliance issued a statement in support of the bills making it through committee.

Matt Hirsch, a spokesperson for the Alliance said: “The efforts to bring destination resorts to Texas made significant progress with today’s vote. Texans have made it clear that they want destination resorts in Texas, and we are now one step closer to ultimately allowing them to decide on this issue.”

Dallas Mavericks owner, Mark Cuban has indicated he’d be open to moving his team to a new home when his current long-term lease comes to an end. A casino resort in Dallas would be an ideal location for the NBA franchise.

There are two very small slots/bingo casinos in the state including Naskila Casino near Livingston. The largest casino is also a native operation near the Mexican border at Eagle’s Pass. Legislation has been written to protect Kickapoo Lucky Eagle Casino from too much competition all at once by authorizing the tribe to operate any type of game or gambling a commercial operation is allowed to offer.

It’s estimated that Texans leave over $5 billion a year in out-of-state casinos and tribal gambling venues. Millions of visitor trips a year are logged to Oklahoma and other neighboring states with more liberal gambling laws.

Source: Texas House State Affairs Committee passes two bills on resort casinos and mobile sportsbetting, G3 NewsWire, April 5, 2023

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Road to the Kentucky Derby: Forte Remains Solid Favorite as Field Solidifies

We’re now four weeks away from the Kentucky Derby, and with the final three major prep races occurring Saturday, we now have a fairly clear picture of who will be running for the roses on May 6.

Tapit Trice
Tapit Trice, left, runs past Verifying down the stretch of Saturday’s Blue Grass Stakes at Keeneland in Lexington, KY on Saturday. The win gave Tapit Trice 100 points toward qualifying for next month’s Kentucky Derby. (Image: Keeneland/Twitter)

Despite exciting wins by a pair of favorites, Tapit Trice in the Blue Grass Stakes and Practical Move in the Santa Anita Derby, neither of them looked as impressive enough to bump Forte from the mantle of presumptive Kentucky Derby favorite. (The other Derby prep, the Wood Memorial, featured 59-1 shot Lord Miles edging favorite Hit King for the upset win.)

Honestly, it was going to take a lot for that even to be considered. Assuming he stays healthy, Forte will likely be a strong betting choice as the horses head to the starting gate at Churchill Downs.

All the Todd Pletcher-trained colt has done to earn that is win five straight races. Not only have they been graded stakes wins, but that streak includes four Grade 1 wins. The last came last weekend in the Florida Derby in stirring fashion as Forte rallied from fifth place and well outside in stretch to score the victory.

Pletcher will actually come into Louisville with three contenders. Besides Forte, he also trains Tapit Trice and Kingsbarns, an undefeated colt who won the Louisiana Derby two weeks ago.

“We’re blessed,” Pletcher told reporters at Keeneland Saturday after Tapit Trice’s victory. “We’ve had a good spring, and now we got to hopefully have another good four weeks.”

The Case for Forte

Favorites have had a little bit of a dry spell recently in the Derby. The last to win was Triple Crown winner Justify in 2018, but the bettors’ choices have come close in recent years, with Epicenter, last year’s favorite, finishing second.

What I think helps Forte’s case this year is how he won the Florida Derby.  He had an outside post – 11th out of 12 – and found himself stuck in traffic for most of the race and looked to be out of contention when he finally made his move. Those conditions are about as close as you can get to a Kentucky Derby environment, where Forte could find himself battling 19 other competitors.

Pletcher had said the major prep race at Gulfstream Park would serve as a good test for his prized colt. The trainer came away pleased that Forte’s best part of the 1-1/8 mile Florida Derby was the final sixteenth, which would indicate he’d do well in the 1-1/4 mile Kentucky Derby.

What was impressive… was when he did make the lead, he kind of pricked his ears again which we’ve seen him do a number of times,” Pletcher said. “It kind of makes you believe there’s a little more in the tank there.”

After Saturday’s races, Circa Sports in Las Vegas kept Forte as favorite, with odds of +315, meaning a $100 wager would net $315.  Tapit Trice and Practice Move are next at +550 each, and Verifying, who lost by a neck to Tapit Trice Saturday, and Kingsbarns are +950.

If Not Forte, Then…

With up to 20 horses in the field, the Kentucky Derby is definitely not a conventional horse race, and with that large a field, it does present bettors with opportunities for value.

If you’re looking for an intriguing long shot possibility, one horse to consider is Two Phil’s, who won the Jeff Ruby Steaks two weeks ago at Turfway Park. Turfway, a Churchill Downs track in Florence, KY, has a synthetic tapeta track, which is different from the dirt track at Churchill.

But Two Phil’s won at Churchill last year on a sloppy track.

If there’s one thing that’s consistent about Louisville in May, it’s that the weather is anything but consistent. It can be 80 and sunny or gloomy and 50 or anywhere inbetween. Sometimes even in the same week. Over the last seven Derby days, it’s rained on five. However, only two of those led to sloppy track ratings, the last coming in 2019.

“I’m hoping it rains,” trainer Larry Rivelli told reporters after the Jeff Ruby.

So, that’s something to keep in mind should the clouds turn dark on May 7. Two Phil’s could be your silver lining.

At Circa, Two Phil’s Derby futures odds are +3000.

Who Will Run in the Kentucky Derby

The field for the Derby is based on points horses accumulate in prep races. Saturday’s races each awarded 100 points to the winner, with the runners up getting 40, the horses in third getting 30, and the horses finishing fourth receiving 20.

Those with the 18 highest point totals are guaranteed spot in the race, with slots also available for horses in Japan and Europe. If an owner withdraws a qualifying horse from contention, the horse with the next highest total of points becomes eligible.

Churchill Downs Senior Director of Communications Darren Rogers tweeted the updated point totals Saturday evening.

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Station Casinos Brings Down Fiesta Rancho in North Las Vegas

Demolition of the Fiesta Rancho in North Las Vegas began this week, with most of the resort’s five-story hotel tower reduced to rubble. Owner Station Casinos announced last July that the Fiesta Rancho would be demolished along with its other North Las Vegas property, Texas Station, which was leveled in February.

Another Fiesta takes a permanent siesta. (Image: FOX5/Vegas)

Both casinos had been closed since the COVID-19 pandemic began, as was Station’s Fiesta Henderson casino. Despite the popularity of the casinos, Station said, their customers switched over to other casinos owned by the company. So they opted to sell the land to buyers who, as part of the deal, promised not to open competing casinos on the sites.

The Fiesta Henderson, which was also demolished in February, was purchased for $32M by the city of Henderson, which intends to use its 35 acres for an indoor youth sports facility. No buyer has been announced for the Fiesta Rancho or Texas Station sites.

“These properties have been an important part of our business over many years, so it is not without sadness that we announce these permanent closures,” Station Casinos president Scott Kreeger said in a statement last July. “We would like to recognize and thank our former team members who worked at these properties for making them a place where our guests always felt welcome. We are pleased that approximately one-third of the team members from each of these three properties are already working at another Station Casinos property, and we hope that number will grow. We also want to thank our loyal guests for their support.”

The ice rink at Fiesta Rancho will remain open, Red Rock Resorts said.

Doubling Up

Red Rock plans to double its Southern Nevada presence by 2030. The locals-focused casino giant opened a new a new Wildfire casino in downtown Las Vegas in February. And it pumped $750M into its Durango Casino & Resort, a new 73K square-foot casino, sportsbook, and 200-room hotel on Durango Drive in Southwest Las Vegas that’s on target to open later this year.

Red Rock also recently closed on the purchase of nearly 67 acres in North Las Vegas for $55 million, after it received approvals for a new 75,700 square-foot casino and 600-room hotel on the site. (That casino is likely to be much more upscale than the Fiesta Rancho or Texas Station.) And, in July, it purchased 126 acres south of the Strip for $172 million — boosting its unused land holdings in the Las Vegas Valley to nearly 430 acres.

Red Rock’s land portfolio shrunk by 21 acres when the company sold excess land surrounding Durango to a housing developer last December for $23.9M. Its total strategic landholdings now total about 522 acres, about 120 of which are under contract or being actively shopped for divesting.

In addition to the Red Rock Resort and Green Valley Ranch, Red Rock currently operates multiple gaming properties under the Station brand throughout the Las Vegas area. The company also runs 10 Wildfire casinos, including seven in Henderson.

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Caesars Windsor Operating License to Expire, Ontario Opens Competitive Bidding

Caesars Entertainment’s operating license at Caesars Windsor will expire in 2025. In anticipation of reaching a new partnership with the Las Vegas Strip firm or a new gaming management entity, the Ontario Lottery and Gaming Corporation (OLG) this week opened up a competitive bidding process.

Caesars Windsor Ontario Lottery OLG casino operator
Caesars Windsor in Ontario has an operational agreement in place with Caesars Entertainment that runs through 2025. In anticipation of renewing the contract or finding a new partner, the casino’s owner, the Ontario Lottery and Gaming Corporation, is conducting a competitive bidding process. (Image: Caesars Windsor)

The OLG on Wednesday initiated its Request for Pre-Qualification (RFPQ) for its Windsor casino. The RFPQ, the OLG explained, is the first step in the procurement process to select the casino’s next operator.

OLG is advancing plans that will support the long-term vibrancy and excitement of the casino experience in Ontario,” said Duncan Hannay, the president and CEO of the OLG. “Releasing the RFPQ for the Windsor casino is the first step in selecting a highly qualified service provider that will ensure the long-term competitiveness of the site while continuing to generate economic benefits for the local community and for Ontario.”

To prequalify, interested firms must demonstrate to the OLG that the organization has a lengthy track record in managing a large casino resort such as Caesars Windsor. Companies that prequalify will advance to the Request for Proposal (RFP) phase of procurement.

Caesars Windsor is near Detroit and features 750 hotel rooms. The casino floor offers 2,230 slot machines, 85 table games, and a Caesars Sportsbook. The resort also has six restaurants and four bars, plus the 5,000-seat Colosseum theater.

Caesars Favored

The OLG says the casino operators that qualify for the RFP will be given the opportunity to present their ideas for the future of Caesars Windsor. In the second round of the bidding process, the OLG will supply bidders with documents and information outlining the opportunity and the sort of information the government is looking for in a proposal.

The OLG is a Crown corporation owned by the Ontario government. Formed in 1975 with the purpose of using lotteries and gaming to generate provincial tax revenue, the OLG today owns the province’s lotteries, charity gaming businesses, Aboriginal casinos, commercial casinos such as Caesars Windsor, and racinos.

The OLG partners with both public and private companies to manage its locations. While Caesars Entertainment is a publicly traded firm, the Great Canadian Gaming Corporation and Gateway Casinos, which operate numerous OLG casino properties, are privately held.

Caesars Entertainment has operated the Windsor casino throughout its entire existence, which dates back to 1994 when the venue opened as the first commercial casino in Ontario. Caesars is reportedly interested in extending its OLG contract and is the presumed heavy front-runner in the competitive bid.

Contracts Uniform

The OLG’s brick-and-mortar casino portfolio includes 28 locations. The OLG’s gaming partners all utilize the same formula to decide the amount of the gaming proceeds that must be shared with the government unit. Those proceeds are predominantly allocated back to the host community.

The City of Windsor’s revenue share from Caesars Windsor in the fourth quarter of 2022 was a little more than $2 million. Since its opening, the casino has benefited Windsor with more than $80.3 million.

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Aussie Banks Want Credit Cards Banned for Online Gambling

aussie_banks_want_credit_cards_banned_for_online_gamblingAustralia has no online casinos licensed in the country even though federal law allows states and territories to license and regulate internet slots and table games. However, home and mobile sports betting is licensed for punters there.

According to the country’s primary banking trade organization, there’s a big gap between financial protections online and on land so the Australian Banking Association (ABA) is asking the government to ban the use of credit cards at online sports betting sites.

The request comes decades after credit cards were banned for gambling at the land-based sportsbooks and casinos there. The licensed online gambling industry did not even exist at the time land-based credit card gambling was prohibited but is now worth an estimated A$50 billion a year.

Credit Cards Already Banned for Land-based Gambling

The ABA’s CEO, Anna Bligh asks: “Why should it be possible to do something in the virtual world that is prohibited in the real world? Every pub with poker machines, every TAB and every trackside bookie already implemented this 23 years ago.”

Bligh wonders if gambling, as a product “is this something we should be providing credit for given what’s happening to our customers?”

According to a report in the Guardian, banks are not on a moral crusade with the initiative but instead are looking out for their own business interests. That said, the association is quite aware of the damage undisciplined gamblers can do to themselves very quickly with potential long-term negative consequences.

“This is just a product that is not suitable for credit,” said Bligh. “You can accrue a very, very large amount of debt in an incredibly short period of time and have nothing to show for it.

“Banks have seen the harm that is being done and they are very conscious of their responsibility as lenders to ask [hard questions].

The initiative would tend to lend itself more to ideation than implementation due to the way merchant category codes work. The international merchant category code (MCC) that has been used for online gambling transactions since soon after the US changed its payment processor rules for online gambling with the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) can also be assigned to transactions involving charities that fundraise by selling lottery tickets.

MCCs are 4-digit numbers listed under the international standard ISO 18245 which currently doesn’t have a code for lottery tickets sold primarily for charity fundraising. In order to create one, advocates would need to apply through ISO/TC 68, Technical Committee 68 on Banking, Securities, and other Financial Services in Geneva, Switzerland. However, changes to ISOs such as adding a new MCC, are usually not entertained for industries generating less than $10m in revenues.

The ABA doesn’t seem interested in paying for changes through the Geneva process, indicating that gambling operators should have to deal with and pay for compliance on their own after a grace period to give them time to adjust.

Licensed Operator Body Supports Ban

Responsible Wagering Australia is an independent body for wagering service providers based in Australia. RWA members include well-known names such as bet365, Betfair, Entain, PointsBet, Sportsbet, and Unibet.

A spokesperson for the group said: “The RWA and its members have been at the forefront of the work to implement a credit card ban – having led the discussions with the banking industry to determine the technical solutions, and delivered them to the government. We cannot speak for other non-member gambling companies.”

While offshore casinos can run credit card gambling transactions through a form of potential money laundering by assigning “the wrong code” to deposit transactions, a few Australian banks have already banned their branded credit cards from being used for gambling transactions, which presumably disallows the purchase of lottery tickets sold for charity fundraising with a credit card. Bank Australia, Bank of Queensland, Citibank, and Suncorp will no longer process MCC 7995.

MPs Sharkie and Wilkie are each preparing legislation to address the issue as well as to introduce suspicious transaction reports to authorities with Rebekha Sharkie’s private member bill focused on banning online credit card gambling and Andrew Wilkie’s bill focused on proceeds of crimes and suspicious transaction report obligations.

Sharkie also wants operators to be required to inform bettors of ongoing losses prior to accepting further bets.

Source: Australian banks urge Albanese government to ban use of credit cards for online gambling, The Guardian, March 26, 2023

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