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UK Implements Online Slot Stake Limits and Gambling Levy

tatutory-levy-and-online-slot-stake-limits-to-be-introduced-to-tackle-gambling-harm-1The UK government has announced comprehensive measures to address gambling-related harm, introducing a statutory levy on gambling operators and online slot stake limits. These initiatives aim to bolster protections for vulnerable individuals while funding essential research, prevention, and treatment programs.

Mandatory Levy to Raise £100 Million

A new mandatory levy will require licensed gambling operators to contribute to a ringfenced fund dedicated to tackling gambling harm. Replacing the existing voluntary system, this statutory levy is expected to generate £100 million annually, with 50% of the funds allocated to NHS-led gambling treatment services across England, Scotland, and Wales. The remainder will support prevention campaigns and groundbreaking research initiatives.

Gambling Minister Baroness Twycross emphasized the importance of this measure, stating, “Gambling harm can ruin people’s finances, relationships, and ultimately lives. We are absolutely committed to implementing strengthened measures for those at risk, as well as providing effective support for those affected.”

Unlike the voluntary system, which saw some operators contributing as little as £1 annually, the mandatory levy ensures consistent and equitable funding. Contributions will vary depending on the type and risk level of gambling activities, with oversight provided by the Gambling Commission.

New Online Slot Stake Limits

To further safeguard vulnerable players, the government is introducing stake limits for online slots, a product often associated with prolonged play and significant losses. Adults aged 25 and over will face a £5 limit per spin, while younger players aged 18-24 will have a lower limit of £2 per spin.

This decision follows evidence from the Office for Health Improvement and Disparities, highlighting the susceptibility of younger adults to gambling-related harm. The measure aims to provide greater protection while encouraging responsible gambling practices.

Baroness Twycross reinforced the government’s focus on safeguarding younger demographics, noting, “We are also helping to protect those at risk, with a particular focus on young adults, by introducing stake limits for online slots.”

Funding Allocation and Long-Term Goals

The government’s consultation process, held between October 2023 and January 2024, guided the distribution of levy funds. The NHS will utilize half of the proceeds to develop a comprehensive treatment and support system, encompassing triage, recovery, and aftercare services.

An additional 30% of the funding will target prevention efforts, including public health campaigns and training for frontline workers. The remaining 20% will support research through UK Research and Innovation (UKRI), driving data-informed policies and regulations to combat gambling harms effectively.

Claire Murdoch, NHS National Director for Mental Health, praised the initiative, citing a 129% rise in service referrals over the past year. “This mandatory levy will help treat this growing problem,” she stated.

A New Era of Safer Gambling

The statutory levy and stake limits are part of broader efforts to modernize gambling regulations in an era of technological advancements. Other measures include financial risk checks and stricter marketing controls to create a safer gambling environment.

By combining mandatory funding with proactive safeguards, the UK government aims to balance enjoyment and responsibility, ensuring that players can gamble safely while receiving necessary protections and support.

Source:

“Statutory levy and online slot stake limits to be introduced to tackle gambling harm“ GOV.UK, November 27, 2024.

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Blackstone’s Crown Resorts Sells Nobu Stake, Turns Tidy Profit

Crown Resorts, the Australian casino operator controlled by US private equity Blackstone (NYSE: BX), sold its 20% interest in the posh Nobu hotel-restaurant chain.

Nobu
The Nobu restaurant at Caesars Palace Las Vegas. Crown Resorts sold its 20% stake in Nobu for $180 million. (Image: Caesars Entertainment)

As is often par for the course with Blackstone, an impressive profit was wrong from the divestment. Crown reportedly grossed $180 million by selling its Nobu interest after buying into the hospitality entity in 2015 for $100 million. Crown’s sale implies Nobu, which counts actor Robert DeNiro among its investors, at $900 million.

At the end of last year, there were 56 Nobu restaurants in 23 countries around the world, the first of which opened in Los Angeles in 1987 under the name Matsuhisa — the surname of founder Nobu Matsuhisa. Crown acquired the Nobu stake under founder James Packer. The gaming company controls Crown Melbourne, Crown Perth, and Crown Sydney in its home country.

Nobu Still Has Gaming Ties

Even with Crown shedding its Nobu investment, the hotel-restaurant company maintains an array of ties to the casino industry.

The first Nobu hotel opened in Caesars Palace on the Las Vegas Strip in 2013. Two years later, another such venue debuted at Melco Resorts & Entertainment’s City of Dreams Manila. A new Nobu hotel is also a centerpiece of enhancements at Caesars Palace on the Atlantic City Boardwalk as well as that operator’s New Orleans plans.

Nobu Hotel and Restaurant New Orleans are set to open within the newly created Caesars New Orleans, following a multimillion-dollar transformation of Harrah’s New Orleans,” according to the Nobu Hotels website.

The site indicates the New Orleans property should be open in late 2024. In Las Vegas, Nobu also has restaurant locations at Caesars-operated Paris and the Virgin Hotel in addition to Caesars Palace.

Blackstone Wants Crown Focusing on Gaming

Crown’s divestment of its Nobu stake was reportedly the result of Blackstone wanting the gaming to focus on its core competencies of casino hotel operations. The private equity giant shelled out $6.6 billion for the Aussie gaming firm in 2022, pledging an array of improvements to bolster Crown’s position in its home country and its appeal to bettors throughout the Asia-Pacific region.

Blackstone is intimately familiar with the casino business. It previously owned and operated the Cosmopolitan on the Las Vegas Strip prior to selling those operating rights to MGM Resorts International (NYSE: MGM) for $1.6 billion. The private equity firm also has an array of successes in the world of casino real estate.

In December 2022, it sold its 49.9% interests in Mandalay Bay and MGM Grand to VICI Properties (NYSE: VICI) for $4.27 billion. It sold Cosmopolitan’s property to VICI for more than $4 billion and is still the majority owner of Bellagio’s real estate. Blackstone also owns the property assets of Aria and Vdara, both of which are also operated by MGM.

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Maloof Brothers Sell Las Vegas Golden Knights Stake

The Maloof Brothers — George, Gavin, Joe, and Phil — have sold what is believed to be their 30% ownership interest in the Las Vegas Golden Knights to Bill Foley. The billionaire founder of Foley Family Wines has been majority owner and chair of the NHL team since its 2017 inception.

Gavin and Joe Maloof celebrate the Vegas Golden Knights Stanley Cup win in 2023. (Image: YouTube)

According to a media release from the team, a fifth Maloof sibling, Adrienne, will continue to be a limited partner with the franchise.

“We would like to thank the entire Maloof family for their contributions to the Vegas Golden Knights organization during their tenure as minority owners,” Foley said in a statement. “They were helpful in bringing NHL hockey to Las Vegas and had a belief and commitment to our city as a viable major professional sports market. We wish the family continued success.”

Though always minority owners, the Maloofs started started the puck scooting on the expansion team. After selling the NBA’s Sacramento Kings, which they owned from 1998 until 2013, they met with NHL commissioner Gary Bettman about bringing hockey to the desert.

Bettman suggested that they meet with Foley, who ended up footing the $500M expansion fee. The Golden Knights played their first game at T-Mobile Arena in 2017.

Not only were the Golden Knights the first major-league sports franchise ever to represent Las Vegas, they were also one of few expansion teams to ever experience immediate success. They reached the Stanley Cup Finals in their first season, 2017-18, and won their first Stanley Cup in 2023 by defeating the Florida Panthers in five games.

Casinos in the Family

Casinos have always loomed as large as sports in the Maloof portfolio. Nearly 30 years ago, the family, which hails from New Mexico, opened the Fiesta Rancho in North Las Vegas.

They sold that property six years later, to Station Casinos, to help finance construction of the Palms. The casino resort’s $275M first phase opened in November 2001, with Station Casinos as a minority owner.

In 2011, after the Great Recession decimated business across Las Vegas, the Palms was sold to Texas Pacific Group and Leonard Green & Partners, with the Maloofs retaining a 2% interest.

Red Rock Resort, Station Casino’s parent company, then purchased Palms for $312M in 2016, selling it for more than double that amount ($650M) to the San Manuel Band of Mission Indians, its current owner, five years later.

 

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Meister’s Corvex Management Takes 4.4% Stake in Entain

Less than 24 hours after Jette Nygaard-Andersen resigned as chief executive officer of Entain (OTC: GMVHY), Keith Meister’s Corvex Management revealed it took a 4.4% stake in the Ladbrokes owner.

Corvex Kindred
Corvex Management founder Keith Meister at an investment conference in New York. His hedge fund took a 4.4% stake in Entain. (Image: Bloomberg)

Corvex is a major investor in MGM Resorts International (NYSE: MGM) where Meister is a member of the board of directors. The casino giant is Entain’s 50/50 partner in BetMGM. Meister’s firm joins Dendur Capital and Sached Heam Capital, two New York-based hedge funds, in recently revealing activist stakes in the Coral owner. Those two money managers bought shares in Entain before Nygaard-Andersen’s resignation.

We believe Entain is at a critical juncture and can benefit from the constructive engagement of a well-informed shareholder with substantial industry and company-specific experience and expertise,” said Corvex in a statement.

The hedge fund added it intends to work with Entain Chairman Barry Gibson and interim CEO Stella David “to be a helpful force for change.”

Corvex Entain Investment Could Stoke MGM Rumors

In midday trading, Entain’s US-listed shares were higher by nearly 9%, indicating investors are enthusiastic about the departure of Nygaard-Andersen and Corvex taking a stake in the gaming company.

The news could also reignite speculation that MGM could revisit a takeover offer for Entain. Corvex is an activist investor, meaning it’s pushing for some form of change with its investment in the company. With Meister being an MGM director, he’d almost certainly vote in favor of the Bellagio operator bidding anew for its BetMGM partner.

Following Entain’s January 2021 rejection of an $11.06 billion takeover bid from MGM, speculation has been rampant the casino company would eventually revisit an acquisition scenario, though executives from that firm have said such a deal isn’t in the near-term offing. Entain investors are likely wishing their company had accepted that deal because the market value of the operator has since slumped to $6.83 billion.

Corvex and the other activists could push Entain to sell its BetMGM stake to MGM — something the latter would likely be agreeable to — but it’s not clear if that’s their plan of attack at the moment. Meister’s hedge fund is also a large investor in Sweden’s Kindred Group, but given Entain’s recent missteps with acquisitions, it may be unlikely that he’d push for Entain to be a buyer of Kindred.

Entain Performance ‘Unacceptable’

Entain and Nygaard-Andersen became targets for activists following a debt-fueled $2 billion acquisition binge that saw the operator gobble up smaller sports betting outfits across Europe, seemingly to bulk up and fend off unsolicited takeover bids.

Those missteps, coupled with BetMGM’s declining market share in the US and Entain’s recent $729 million payment to UK regulators to settle allegations of bribery related to its Turkish operations, likely sealed Nygaard-Andersen’s fate.

The former chief executive officer did herself no favors with her inability to control corporate costs and her knack for private air travel drew the ire of Entain investors who dubbed her “Private Jette.” For its part, Corvex sees more change coming at the gaming company.

“While the Company’s recent management change was a necessary first step, further change is required. Simply put, Entain’s recent performance has been unacceptable and all options must be considered to drive value,” concluded the money manager.

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Playtech Acquires Less Than 10% Stake in Hard Rock Digital for $85M

playtech_acquires_less_than_10pct_stake_in_hard_rock_digital_for_dlr85m.Playtech has entered into a wide-ranging global partnership with Hard Rock Digital (HRD), the iGaming and sports arm of Hard Rock International and Seminole Gaming.

HRD’s customers in the US and Canada will have access to a selection of Playtech slots, live dealer table games, and random number generator games through HRD’s existing proprietary platform and technology offering.

Outside the US and Canada, HRD will have access to HRD’s player management platform and other solutions including operations management, payment advisory, and marketing, as well as customer support services.

Playtech Purchases Minority Equity Share

In support of the deal, Playtech has purchased a single-digit minority share of equity in HRD for US$85 million from Hard Rock International and Seminole Gaming.

Playtech has purchased a minority equity ownership stake in Hard Rock Digital (HRD), the interactive gaming and sports betting division of Hard Rock International and Seminole Gaming, as part of a wider deal between the two businesses.

Hard Rock currently operates online and retail sports betting in the US inside the borders of Arizona, Indiana, Iowa, New Jersey, Ohio, Tennessee, and Virginia and expects to expand the offering internationally.

Revenue Sharing Part of the Deal

In addition to the equity share purchase, additional long-term agreements include revenue sharing with Playtech in return for offering its products and services through HRD.

Mor Weizer, Playtech CEO said: “The Playtech team is thrilled to announce our strategic partnership with HRD. Hard Rock International has cemented itself as a marquee name worldwide, not just in gambling, but more widely in entertainment.

“HRD will combine the strength of this global brand with a proven management team, some of whom we at Playtech have known for many years and believe to be among the strongest in the online gambling industry.

“For Playtech, this partnership significantly advances our position in the North American market and is very much in line with our B2B strategy.”

Hard Rock International and HRD chairman Jim Allen added: “This partnership will act as an accelerator to Hard Rock Digital’s planned strategic initiative to expand its online gaming offerings to international markets, becoming the first operator with a global omnichannel offering under a singular, irreplaceable brand.

“This announcement only reinforces our commitment to lead innovation in the gaming industry and expand the ‘Hard Rock’ experience worldwide. We look forward to providing an authentic, digital experience for Hard Rock’s global fan base within a comprehensive, omnichannel offering.”

Source: Hard Rock Digital, Playtech Enter Strategic Partnership, Hard Rock Digital News, March 14, 2023

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