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Minnesota’s Running Aces Racino Adds More Casinos to RICO Suit

Minnesota harness racing track Running Aces has added two more casinos to a federal racketeering suit that claims tribal operators in the state are running “illegal” games.

Running Aces, Taro Ito, RICO lawsuit, Mystic Lake Casino, Little Six Casino, Shakopee
Running Aces president and CEO Taro Ito, above, says that all he wants to do is compete on a level playing field. But tribal interests dismissed his lawsuit as a stunt to designed to “mislead the public” and “influence the legislature.” (Image: The Business Journals)

Last month, the Columbus, Minn.-based racino sued the Grand Casino Hinckley, Grand Casino Mille Lacs, and Treasure Island Resort. Running Aces claims they conduct class III card games that are not covered by their tribal-state gaming compacts, such as Three Card Poker and Ultimate Texas Hold’Em.

The Grand Casinos are owned by the Mille Lacs Band of Ojibwe. Treasure Island belongs to the Prairie Island Indian Community.

In an amended complaint filed Tuesday, Running Aces added Mystic Lake and Little Six Casinos, which are owned by the Shakopee Mdewakanton Sioux Community (SMSC).

‘IGRA Violated’

The racino accuses all five casinos of violating the Indian Gaming Regulatory Act (IGRA), as well as state laws, by operating not only class III card games but also “video games of chance,” such as slots.

The tribes are permitted by the state to offer these games under the terms of their compacts. Minnesota was the first state to sign compacts with its federally recognized tribes after the enactment of IGRA in 1988.

Many feel lawmakers blundered by failing to negotiate revenue-sharing provisions. The state is not permitted to renegotiate any of these compacts without the tribes’ approval.

But the Minnesota criminal code “specifically prohibits and makes illegal the playing of electronic video games of chance for any person,” as the lawsuit notes.

This is something the tribes “know only too well,” per the lawsuit. When Running Aces applied to Minnesota Racing Commission to “modestly expand its ‘dealer assist’ table games,” the SMSC objected on the grounds that “video games of chance are not permitted in Minnesota,” the suit states.

‘No Merit’

“All that we have ever sought was to be treated fairly, compete on a level playing field, take advantage of improvements within the pari-mutuel environment, and operate without fear of being eliminated,” Running Aces president and CEO Taro Ito said in a statement to local CBS affiliate KSTP-TV. “It is our sincere desire to have our day in court and let the facts determine the outcome.”

But the SMSC dismissed the Running Aces lawsuit as having “no merit,” labeling it a “desperate stunt to attack the good reputation of tribes and tribal gaming” in a statement to FOX 9.

All gaming conducted at Mystic Lake and Little Six Casinos complies with tribal law, federal law, and the gaming compact that was executed in 1989,” read the statement.

The SMSC claims Running Aces is seeking to “mislead the public and influence the final stages of the Minnesota Legislature’s 2024 session,” to prevent the passage of a bill that would hand a sports betting monopoly to the tribes.

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Caesars Q1 Results Miss Estimates as Regional Casinos, Sports Betting Lag

Shares of Caesars Entertainment (NASDAQ: CZR) slumped during Tuesday’s after-hours session, extending declines following a 4.66% drop during normal trading hours after the casino operator posted first-quarter results that badly missed Wall Street forecasts.

Caesars Digital
Caesars Palace Las Vegas. The operator said first-quarter earnings and revenue at its Las Vegas and regional casinos declined. (Image: YouTube)

The Harrah’s operator said it lost 73 cents a share on revenue of $2.74 billion in the first three months of the year. Analysts expected a loss of eight cents on sales of $2.83 billion. While the gaming company mentioned unfavorable outcomes on the Super Bowl and the NCAA Tournament as among the reasons the first-quarter numbers missed forecasts, analysts and investors might apply scrutiny to Caesars’ Las Vegas and regional casino results.

On the Strip where it’s the second-largest operator, Caesars revenue declined to $1.03 billion in the March quarter from $1.11 billion a year earlier. The gaming company said adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) at its Sin City venues declined to $440 million from $533 million a year earlier.

That could heighten concerns that activity is slowing down on the Strip following a multi-year run of pent-up demand sparked by coronavirus shutdowns.

Caesars Regional Woes Not Surprising

Caesars said its regional casinos posted first-quarter adjusted EBITDA of $443 million on revenue of $1.37 billion, down from $448 million and $1.39 billion a year earlier.

The tepid results from the regional side of Caesars aren’t surprising because multiple operators have flagged softness at such venues due to bad weather in January that hampered visitation to gaming venues in Reno/Tahoe and the Midwest. Additionally, there are mounting signs of lower-tier bettors reducing spending at gaming venues in the South.

There have been signs that high interest, sticky inflation, and other macroeconomic headwinds are weighing on some gaming venues in the Midwest and the South. Likewise, six of the nine casinos in Atlantic City, NJ experienced profit declines last year as more locals embraced iGaming.

“Moving past the first quarter headwinds, we remain optimistic toward improved operating results throughout the balance of the year,” said CEO Tom Reeg in a statement.

Modest Progress on Debt Reduction

Entering this year, analysts and investors wanted to see more evidence of Caesars trimming its debt burden — one of the industry’s largest. There were incremental signs of that progress in the first quarter. As of March 31, the Horseshoe operator had $12.436 billion in outstanding liabilities compared to $12.439 billion at the end of 2023.

At the end of the March quarter, Caesars had cash and cash equivalents of $726 million, a figure that does not include $139 million in restricted cash.

“Excluding joint venture capex, we estimate 2024 cash capex spend of $800 million. We anticipate using free cash flows to continue to reduce debt in 2024,” said CFO Bret Yunker in the press release.

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Nevada Casinos Report Net Income of $3.44B in Fiscal Year 2023

Nevada casinos generated record revenue of $29.86 billion during the state’s 2023 fiscal year, but net income slid because of billowing inflation, interest, and overall administrative costs.

Nevada casinos abstract income revenue
The Resorts World Las Vegas casino floor is bustling in a file photo. Nevada casinos reported net income of $3.44 billion during the state’s 2023 fiscal year on gross revenue of $29.86 billion. (Image: AP)

The Nevada Gaming Control Board (NGCB) on Friday unveiled the 2023 Gaming Abstract for the 12 months ending June 30, 2023.

During the fiscal year, 300 casinos grossed at least $1 million on their gaming floors. Only casinos that generated over $1 million in gross gaming revenue (GGR) are included in the annual report that provides a financial analysis of the state’s nonrestricted gaming licenses.

The nearly $30 billion in revenue includes gaming win and sales from hotel rooms, food and beverage, entertainment, spa services, and other resort attractions. Gaming represented about 37% of the revenue, or $10.92 billion.

On the $29.86 billion in sales — 8.9% higher than the 2022 fiscal year — the 300 casinos reported net income of $3.44 billion. Net income dropped over 21%, with higher borrowing rates, labor, and materials and goods costs blamed for the decline.

Net income refers to the amount of revenue retained by the casinos after expenses have been paid but before federal income taxes are deducted and extraordinary expenses are covered.

2023 Still Solid

Nevada casinos experienced their second-best financial year in 2023, as 2022 was a banner performance.

Clark County, home to Las Vegas, accounted for the most revenue at $26.86 billion, which was a 9.5% year-over-year increase. Net income for Southern Nevada casinos was $3 billion, a 21% drop but the market’s second-best year.

Strip casinos generated $20.48 billion of the revenue and $1.37 billion of the net income. Downtown casinos reported revenue of $1.55 billion and net income of $259.17 million. While Strip casinos saw net income slide almost 34%, downtown resorts said net income fell 4%.

Every metered area in the state report incurred a net income decline from the 2022 fiscal year. But each market still reported positive net income aside from Lake Tahoe’s South Shore.

The positive net income came despite interest expenses surging 23% to nearly $449 million, rent increases of 70%, or $248 million, and general expenses climbing 17% to $613 million.

2024 Outlook

Nevada casino execs aren’t expecting costs to subside anytime soon, so revenue must continue to increase. Many expect that to happen, including MGM Resorts International President and CEO Bill Hornbuckle.

2023 was an amazing year. We’ve got some headwinds, particularly with labor costs, but there’s enough programming and enough momentum that we think we surpass,” Hornbuckle said on the company’s earnings call last week.

Last fall, the Culinary Union that represents resort workers up and down the Strip struck new labor terms with several casino operators, including MGM, Caesars Entertainment, and Wynn Resorts. Some 50,000 Las Vegas casino employees are receiving wage increases as a result of the new five-year union contracts.

The 12 months in 2023 were a record year for Nevada casinos, as GGR climbed to a new high of $15.5 billion. Union leaders successfully campaigned that their members deserved a bigger piece of the financial pie by way of increased pay and more robust benefits.

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Playtech Signs Agreement with Boyd Interactive for Stardust Online Casinos

boyd-interactives-stardust-online-casinos-to-feature-playtech-gamesPlaytech, the global supplier of technology and gaming content for online casinos, has announced it reached an agreement with Boyd Interactive, one of the top online casino operators in the United States.

The deal will see the online casinos operated by Boyd Interactive under the Stardust brand in the United States feature both slot games and table games provided by Playtech. Live dealer games from the supplier are also included in the agreement.

The content will be rolled out in Pennsylvania and New Jersey, including popular titles such as Age of the Gods, Gold Rush: Cash Collect and Adventures Beyond Wonderland, along with live casino titles such as Adventures Beyond Wonderland, along with different variants of Roulette and Baccarat.

Boyd Interactive appeared on the iGaming scene in 2022, when Boyd Gaming acquired Pala Interactive and all its subsidiaries in a deal worth 170 million dollars. After the acquisition the company was rebranded as Boyd Interactive and shortly after that it launched its Stardust online casinos in the spring of 2023.

In October 2023 Boyd Gaming announced that it had registered healthy online growth as the company’s revenue recorded an increase in the third quarter of the current year.

Expecting Mutual Success

Speaking about the partnership with Boyd Interactive, Marcus Yoder, the Chief Commercial Officer of Playtech USA, declared himself confident that the agreement would bring “mutual success” to the two companies and added that the American company has a “reputation for excellence.”

The Playtech executive added that Boyd Gaming has “expanded its long-standing tradition” on the American gambling market by launching the Stardust online casinos, which aim to deliver “unique entertainment experiences into the online space.”

Jim Ryan, Chief Executive Officer of Boyd Interactive, declared himself “excited” by the addition of games from Playtech into the offerings of Stardust both in Pennsylvania and New Jersey.

Playtech has been gaining more and more ground on the United States market this year. In July the company formally announced its plans to launch a live casino game show broadcast from a dedicated studio in New Jersey, while in November it launched a new live casino studio in Pennsylvania.

Source: “Playtech Partners with Boyd Interactive to Launch Games for Stardust Online Casinos in the United States“. Playtech. December 20, 2023.

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Colorado Man Pleads Guilty to Damaging Nevada Solar Array Linked to MGM Casinos

The man who drove his car through a fence at a solar power facility and then created a blaze pled guilty in Las Vegas court last week.

Mohammed Mesmarian
Mohammed Mesmarian in a mug shot, pictured above. He pled guilty last week in connection with damage to a solar complex in Nevada. (Image: LVMPD)

Mohammed Mesmarian, 35, a one-time Colorado dentist, entered guilty pleas to two reduced charges: second-degree arson and malicious destruction of property, according to Las Vegas TV station KLAS.

Initially, he was charged with committing an act of terrorism, arson, destroying or injuring real or personal property of another, and escape by a felony prisoner for the Jan. 3 incident.

Emotional Illness

He’s also claiming he’s suffering from emotional illness, so a judge could order that he receives treatment for mental health issues.

Mesmarian is scheduled to be sentenced on Dec. 18. He could head to prison or be given probation, KLAS reported.

Earlier this year, Mesmarian was ruled emotionally unfit for trial by Clark County District Court Judge Christy Craig, the Associated Press reported.

He was sent temporarily to a Nevada forensic psychiatric institution. Before the judge made the ruling, at least two psychiatrists examined Mesmarian.

His actions damaged a transformer and other infrastructure at the facility. Power was knocked out for weeks until repairs were made. When the power was out, MGM Resorts properties were able to find alternative sources of energy by turning to the grid.

Court Outburst

On Jan. 5, Mesmarian was arrested. He was located by police at a campground in Boulder Beach at Lake Mead.

Earlier this year, when he first appeared in court, Mesmarian blasted out, “There’s so much wrong in the whole system since I entered here. Nothing’s right. Just a bunch of Black people stuck in a room together.”

In a statement to Las Vegas Metropolitan Police Department (LVMPD) officers, Mesmarian denied committing sabotage.

Complex Details

The complex where the incident took place is the Mega Solar Array facility. It’s located on U.S. 93, north of the Las Vegas Motor Speedway. The array is in the desert, some 25 miles from Las Vegas.

Chicago-based Invenergy operates the facility, and it provides power to 13 MGM Resorts properties.

The MGM Resorts Mega Array project — a key component of the gaming company’s long-term climate strategy — is the world’s largest renewable energy plant serving the gaming industry. It delivers 100 megawatts of power captured by 336K panels installed on 640 acres.

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