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Alabama Pension Fund Administrator Encourages Lawmakers to Authorize Gambling

The top official overseeing Alabama’s pension fund is calling on Gov. Kay Ivey (R) to initiate a special legislative session to continue talks about casino gambling authorization that stalled in the Montgomery capital earlier this year.

Alabama casinos gambling pension program
Retirement Systems of Alabama CEO David Bronner thinks allowing commercial casinos and other forms of gambling in the Cotton State could provide critical tax money that might be used to provide state retirees with a cost-of-living-adjustment. Gaming talks stalled earlier this year in Montgomery. (Image: Bham Now)

David Bronner is the chief executive officer at the Retirement Systems of Alabama (RSA), the pension fund program for state employee retirees. One of the world’s largest internally funded pension programs, the RSA is perhaps best known for developing the Robert Trent Jones Golf Trail, 11 golf courses spread across the state. Bronner was instrumental in the golf destination’s development.

Bronner is looking for new funding sources and thinks lawmakers who this year supported efforts to bring a lottery, commercial casinos, and sports betting to the state are on the right path.

However, the gaming package compromise reached by a special legislative committee failed to pass the state Senate this month by a single vote. The House had easily passed the gaming bill with the needed three-fifths majority support.

Special Session Warranted

Writing in the RSA’s June newsletter, The Advisor, Bronner says Alabamans participating in the state pension program haven’t received a cost-of-living-adjustment in 18 years. The additional state tax streams that lottery and casino gaming would deliver could help boost the pension payouts.

After the one-vote loss in the Senate, the most popular Alabama governor in my lifetime was asked about a special session, to which she replied, ‘Why would I do that?’ Simply put, because you can accomplish it,” Bronner wrote in calling on Ivey to initiate a special session to push the gaming bill across the finish line.

Ivey has been supportive of bringing slot machines, table games, sports betting, and a lottery to the Cotton State. But the governor said this month following the Senate gridlock that she won’t waste tax dollars on a special gaming session when lawmakers “cannot come to a consensus among themselves.”

Bronner says recent tax cuts made by the Legislature on groceries and overtime pay, as well as various tax credits, including $100 million for school vouchers, means less revenue for the state’s pension system.

“Antigaming folks might suggest increasing Alabama’s property taxes, which are the lowest in America, to replace this revenue, but this has been impossible to accomplish in the past,” Bronner continued. He concluded by encouraging RSA enrollees to ask the state lawmakers who voted against the gaming bill “how they plan to address the state’s problems without any new revenue in light of the recent tax cuts and loss of federal monies.”

Gaming Holdout

Legislative efforts to bring new forms of gaming to Alabama have persisted nearly every year since 1999 when state voters rejected a ballot referendum that would have created a state-run lottery. Alabama today remains free of a lottery, commercial casinos, racinos, sports betting, and iGaming.

The only permissible forms of gaming are charitable games of chance, parimutuel wagering, and Class II Indian gaming. The state’s lone federally recognized tribe, the Poarch Band of Creek Indians, runs three tribal casinos where electronic bingo-based games that resemble traditional casino slot machines operate.

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Play’n GO Unveils 2023 Sustainability Report with Key ESG Initiatives

Play’n GO, the world’s leading casino entertainment provider, has announced the release of its 2023 Sustainability Report. This inaugural report outlines the company’s Sustainability Strategy, progress, and Environmental, Social, and Governance (ESG) commitments and goals for the year.

Building a Sustainable Industry and Planet

Playn-GO-announces-release-of-company-Sustainability-ReportThe report details Play’n GO’s efforts over recent months and years to contribute to a more sustainable industry and planet. Key areas covered include Responsible Gambling, Climate Commitments, and Inclusion and Diversity. The company has also embraced a pioneering Digital First culture, giving its employees the freedom to choose where and how they work.

Vanessa Arenram, Director of CSR at Play’n GO, expressed her excitement about the release: “Play’n GO has long made its commitment to sustainability and ESG very clear, and the release of our first-ever Sustainability Report is evidence of those words being put into action. We’re thrilled to finally share this report today, and it serves as a celebration of the dedication and progress made by our global team. From our commitment to player safety and collaborating with regulators to influence the development of sustainable regulation, to our Climate Pledge and how we are investing in our people and partnerships, we mean it when we say that the only viable future is a sustainable one. While much of the Report has already been actioned, we still have work to do, and this Report holds us to account as we continue leading the industry to a sustainable future of iGaming.”

Key Initiatives and Achievements

Responsible Gambling: Play’n GO’s groundbreaking Bonus Buy study is a highlight, showcasing the company’s dedication to player safety and responsible gaming practices. Collaborations with regulators have been pivotal in influencing the development of sustainable regulations.

Climate Commitments: The report outlines the company’s Climate Pledge, focusing on reducing its carbon footprint and implementing environmentally friendly practices across its operations.

Inclusion and Diversity: Play’n GO emphasizes its commitment to fostering an inclusive and diverse workplace. The company’s Digital First culture supports this by providing employees with the flexibility to work in ways that best suit their needs.

The Sustainability Report also underscores the importance of regulatory clarity and the need for self-regulatory bodies designated by the Ministry of Electronics and Information Technology (MeitY). This framework can incorporate lessons from existing IT rules to create a comprehensive regulatory environment for online games.

Future Goals and Continuous Improvement

While the report highlights significant progress, Play’n GO acknowledges that there is still work to be done. The company is committed to continuous improvement and innovation, ensuring that its strategies evolve to meet emerging challenges and opportunities in the industry.

Source: “Play’n GO Announces Release of Company Sustainability Report”, Play’n GO, May 28, 2024.

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Penn Entertainment Failing in Sports Betting, Should Consider Sale, Says Investor

In a letter to Penn Entertainment’s (NASDAQ: PENN) board of directors, the Donerail Group, which has long been an investor in the regional casino operator, said the gaming company is failing in online sports betting, is overcompensating CEO Jay Snowden, and should consider a sale to create shareholder value.

PENN Play
An image for Penn Entertainment. Investor Donerail Group said CEO Jay Snowden is overpaid and Penn should consider selling itself. (Image: Penn Entertainment)

Donerail Managing Partner Will Wyatt opined in the letter to Penn Chairman David Handler that the gaming company has spent four years and billions of dollars of shareholder capital in a bid to gain a foothold in the online sports betting space, but those efforts have proven unsuccessful.

Moreover, the growing pattern of guidance misses, alongside a demonstrated unyielding appetite to continue to invest in the Company’s fledgling Interactive projects, irrespective of past results and without a clear return framework, has significantly damaged the credibility of this management team and Board of Directors,” wrote Wyatt.

There’s something to those claims. Between January 2020 and February 2023, Penn shelled out about $551 million to acquire Barstool Sports in an effort to leverage that brand as a catalyst for its online and retail sportsbooks, but those dividends never accrued.

Last August, the regional casino giant sold Barstool back to founder David Portnoy for just $1 as it entered into a costly agreement with Walt Disney (NYSE: DIS) to use ESPN branding for the Penn-operated ESPN Bet mobile betting app. In addition to paying ESPN $1.5 billion over 10 years, the gaming company also granted the network $500 million in equity warrants. While ESPN Bet has performed better than Barstool Sportsbook, Penn has made little headway in terms of wresting market share from larger rivals DraftKings and FanDuel.

Penn Entertainment Sale Makes Sense, Says Donerail

The letter by Donerail, a Los Angeles-based, event-driven money manager, sparked a noteworthy rally by Penn shares with the stock closing high by 19.62% on volume that was more than quadruple the daily average. However, today’s showing was a departure from the norm.

As Wyatt pointed out to Handler, Penn shares shed 80% over the past three years. Today, the stock closed at $17.50 — a far cry from the all-time of $142 set in March 2021. That lengthy slump coupled with the aforementioned board and management missteps are among the reasons Donerail believes Penn should consider selling itself — a move that if executed could fetch more than double the operator’s current market value of $2.19 billion, according to Wyatt.

“Given our understanding of the Company’s assets, however, alongside an understanding of the industry participants’ current strategic appetite to grow inorganically, we do believe that a sale of the Company’s assets, if undertaken, could generate meaningful and certain value creation for equity investors,” he noted to Handler.

In the letter, Wyatt observed that Penn’s market capitalization represents a steep discount to the $13.35 billion average found among its peer group, but the Donerail partner didn’t directly identify potential suitors for the gaming company.

In recent months, Penn has been the subject of attention by professional investors. Last month, David Einhorn’s Greenlight Capital announced “medium sized” stake in Penn. Last December, HG Vora said it took an interest of 18.5% of Penn’s shares outstanding and demanded board seats in an effort to push for change at the gaming company. Despite that fanfare, the stock shed almost a third of its value since the start of 2024.

Donerail Decries Snowden Compensation

Wyatt didn’t hold back in his criticism of Penn’s compensation of CEO Jay Snowden, noting the board signed off on $99.3 million in total pay for the executive between 2020 and 2023 — a period that included significant declines by the stock.

Citing Institutional Shareholder Services (ISS), Wyatt said Snowden has the worst possible score issued by the firm in terms of his compensation being aligned with shareholder interests.

“In fact, Mr. Snowden’s compensation was deemed to be so gratuitous, As You Sow chose to use PENN as a case-study of wrongdoing in its report. Institutional shareholders appear to share our view, with leading institutional investors BlackRock, Vanguard, State Street Global Advisors, and CalSTRS all having voted against PENN’s executive compensation in the past, yet meaningful change has not been made by the Board’s compensation committee,” said Wyatt.

As You Sow, a leading shareholder advisory group, recently noted that Snowden was the third-most overpaid CEO among S&P 500 companies, but the stock was removed that index in September 2022.

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Crown Resorts Receives Approval to Operate Sydney Casino

crown-resorts-receives-approval-to-operate-sydney-casinoIn a decision that echoes through the Australian business landscape, Crown Resorts has finally secured approval to operate its Sydney casino. This long-awaited green light, granted on April 23rd, 2024, by the New South Wales Independent Casino Commission (NICC), signifies a turning point for the company.

However, the path to this point has been controversial, forcing Crown to undergo intense scrutiny and implement significant reforms. The approval will have significant implications, not only for the company but also for the broader Australian gambling industry and the local economy.

A Look Back at Crown’s Tumultuous Journey

Crown’s Sydney aspirations were initially met with enthusiasm. In 2013, the development of a $1.5 billion luxury resort with an integrated casino at Barangaroo, a prime location in Sydney Harbour, was approved.

However, the path to opening wasn’t smooth. In 2021, a devastating inquiry led by former judge Patricia Bergin, SC, exposed a series of concerning practices within Crown Resorts. The issue unearthed evidence of money laundering, irresponsible gambling practices, and connections to organized crime syndicates through the company’s dealings with high-roller junket operators.

These revelations sent shockwaves through the Australian public and regulatory bodies. Crown’s license for the Sydney casino was suspended, and its suitability to operate in New South Wales was called into question.

Regaining Trust

Faced with the potential loss of its Sydney venture, Crown embarked on a comprehensive reform program. The company underwent a leadership overhaul, with a complete restructuring of its board and senior management.

Furthermore, the organization focused on cultural change. It puts a high priority on responsible gambling, anti-money laundering, and strong governance. Crown also implemented stricter compliance protocols and risk management strategies.

This commitment to reform was further strengthened by a change in ownership. In June 2022, US private equity giant Blackstone acquired Crown Resorts for $8.9 billion. Blackstone, known for its focus on responsible investment, pledged to uphold the highest standards of governance and compliance. This commitment resonated well with regulators, demonstrating Crown’s dedication to reform.

What’s more, this shift brought in new leadership and significant investment. It includes $200 million specifically allocated to support responsible gambling initiatives and anti-financial crime initiatives.

Notably, Crown Sydney adopted cashless gaming for all electronic table games, a first for casinos in New South Wales. This demonstrated its commitment to addressing money laundering concerns.

A New Dawn for Crown

The NICC’s decision to grant Crown Sydney its license reflects confidence in the company’s reform efforts. However, the approval comes with a set of stringent conditions. The NICC will maintain close oversight, and Crown will be obligated to demonstrate ongoing adherence to new regulations and compliance protocols.

This period of conditional operation serves as a probationary phase. During this time, Crown must consistently prove its suitability as a responsible casino operator.

For the Australian gambling industry, Crown’s Sydney approval signifies a potential turning point. The industry has faced increased scrutiny in recent years, with calls for stricter regulations to curb problem gambling and enhance anti-money laundering measures.

Crown’s experience serves as a cautionary tale. It highlights the severe consequences of non-compliance and the importance of responsible practices. The industry will likely see a ripple effect with other gambling operators, including the online casino in Australia. They will re-evaluate their own internal controls and compliance measures to avoid a similar situation.

The economic impact of Crown Sydney’s opening is expected to be substantial. The casino complex is projected to create thousands of jobs and generate significant tax revenue for the New South Wales government. It should also contribute to the revival of Sydney’s tourism industry.

However, concerns remain regarding potential social costs associated with increased gambling activity. Measures to mitigate problem gambling addiction and ensure responsible practices will be crucial in the long run.

The Public’s Verdict: A Jury Still Out

While the green light for Crown Sydney signifies a step towards regulatory reconciliation, the court of public opinion remains in session. The controversies that engulfed Crown have left a deep scar on the company’s image. Regaining the public’s trust won’t be a quick fix; it will be a long and arduous process demanding sustained commitment from Crown.

Regaining trust requires more than just regulatory compliance. Crown needs to demonstrate a genuine commitment to responsible gambling practices. As part of this effort, it is important to implement effective player identification and monitoring systems as well as provide support services for problem gamblers. It should also encourage a culture that prioritizes player well-being over maximizing profits.

Transparency will be a key factor in this process. Open communication with the public about Crown’s reform efforts, including detailed information on implemented changes and their effectiveness, is crucial.

Crown should be proactive in engaging with stakeholders. This includes community groups, problem gambling organizations, and the media. Regularly publishing independent audits and reports on its compliance efforts would also demonstrate a commitment to transparency.

A Second Chance, a Continued Watch

The story of Crown Sydney goes beyond the fate of a single casino. It represents a critical moment for the Australian gambling industry. As Crown Sydney prepares to open its doors, the industry as a whole face a period of heightened scrutiny and potential reform.

Whether Crown can capitalize on this second chance and the industry can navigate a more responsible path remains to be seen. Only time will tell if the lessons learned from Crown’s tumultuous journey will lead to a more sustainable and responsible future for Australian gambling.

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Madrid Reports Significant Decrease in Betting Shops and Gambling Saloons

La-Comunidad-de-Madrid-reduce-un-60-las-casas-de-apuestas-desde-2019The Government of Madrid has announced a significant reduction in the number of land-based betting shops within the Spanish autonomous community, with a reported 60% decrease since 2019. The number of betting shops has dropped from 160 in that year to just 64 currently. Additionally, gambling saloons have seen a decreasing trend of 8%.

During a presentation to the plenary session of the Madrid Assembly, Carlos Novillo, the Minister of Environment, Interior, and Agriculture, highlighted the region’s standing in terms of gambling saloons per capita. Madrid ranks 14th out of the 17 autonomous communities and the two autonomous cities in Spain in terms of gambling saloons per 100,000 inhabitants.

Efforts in Regulation and Compliance

Carlos Novillo provided further insights, noting that the Madrid government has conducted an extensive number of inspections to ensure regulatory compliance. In 2023 alone, up to 27,000 inspections were carried out, with an additional 15,000 inspections conducted so far in 2024. These inspections have shown a decreasing balance of sanctions, which Novillo interprets as evidence of the sector’s adaptation and respect for the current regulations.

“The decreasing balance of sanctions indicates that the sector is adapting to regulation and is respecting it,” stated Novillo during his address. He emphasized that the efforts of the regional government to regulate and control the betting and gambling sector are bearing fruit.

Impact on Accessibility and Compliance

The reduction in the number of gambling establishments, alongside the decrease in sanctions, suggests a trend towards greater compliance by operators with the regulations imposed by the regional government. This compliance potentially leads to a decrease in the accessibility of these premises for residents of the Community of Madrid, contributing to a more controlled gambling environment.

Novillo concluded his remarks by reinforcing the positive outcomes of the regulatory measures, stating, “This trend suggests a greater compliance by operators with the regulations imposed, as well as a possible decrease in the accessibility of these premises for residents of the Community of Madrid.”

Additional Context from Regional Data

Supporting the minister’s statements, regional data indicates that the efforts of the Madrid government are effectively managing the gambling landscape. The comprehensive inspections and subsequent reduction in sanctions highlight the commitment to ensuring a responsible and regulated gambling environment.

As the Community of Madrid continues to monitor and regulate the sector, these measures demonstrate a proactive approach to managing the impacts of gambling on its residents. The government’s actions serve as a model for other regions aiming to balance industry growth with social responsibility.

Source: “La Comunidad de Madrid reduce un 60% las casas de apuestas desde 2019”. MadridActual. May 23, 2024.

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