Online Casino Edition – Casino News News about online casinos and gambling

June 15, 2013

Cosmopolitan Making Slow Headway to Profit

Filed under: Casino — Tags: , , — OCE News @ 6:17 am

The Cosmopolitan is known for being the most expensive property built on the Vegas Strip. It was opened in December of 2010, and even then many analysts were wondering just how long it would be before the casino made a profit. The casino has been running now for 9 financial quarters and the pricey $3.9 billion casino and resort is using lots of red ink on its ledgers. However, the casino did see good increases in its year-over-year segments during its first quarter.

One reason for its slow move to profits is that many other clubs have opened in the local area. And don’t forget the Vegas skyline is full of properties owned or run by MGM Resorts International, Wynn Resorts Ltd., and Caesars Entertainment Corp. It is tough neighborhood to break into, no matter who you are.

So far, the Cosmopolitan has relied on its revenue from food and beverage sales. Since opening, the resort has generated some $648.5 million. For their first quarter, they earned 40 percent of their gross (or $74.7 million) from food and beverage sales. It can be said that non-gaming venues have been very important to them during these early days.

The casino does understand that maintaining an edge is crucial if the business wants to compete with the other big properties. So far, they have been able to do this with their outstanding restaurants and clubs. Also, the resort plans to add to its event space with a new addition that will be called The Chelsea. The new space will be for events and performances. It is expected to be finished later this year, according to the resort. When finished, The Chelsea will be a 50,000-square-foot venue that will be capable of holding more than 3,000 people.

Only 22 percent of the casino’s gross revenues came from gaming. This is down for the average of Strip properties that come in at about 36 percent (for 2012). The Cosmopolitan as reported that it is already seeking new ways to increase its international hosting services, as well as beginning to build a base of slot machine customers, and that it will be expanding alliance programs in order to earn higher casino revenues.

In addition to having to work hard on its revenue streams, the Cosmopolitan has had to weather some bad press lately when negotiations with the Culinary Union went south. Before it was over, union members and supporters had put together a protest of sorts and blocked a portion of the Vegas Strip. This occurred back in March. The talks between the parties have stalled and include issues such as working hours, pensions, health care, and how many rooms each housekeeper is to clean. Officials of the casino believe that a solution can be reached that will be agreeable to all parties.

If an agreement is not forthcoming, it could impact the resort as some people will not cross and picket line on a moral basis, and others will not want to wade through any blockages that lead into or off of the property.

June 13, 2013

PokerStars vs Atlantic Club Continues with Lawsuit

Filed under: Casino — Tags: , — OCE News @ 6:16 am

Owners of the Atlantic Club have filed papers in court that respond to a lawsuit that PokerStars brought seeking to force the Atlantic Club to complete an acquisition deal concerning the New Jersey casino. The new papers that were filed ask the judge to remove a restraining order that was imposed so the Atlantic Club can continue to entertain offers from other interested parties on their casino until the court makes a decision as to if time has expired on the PokerStars agreement.

The agreement in question states that PokerStars has to have gotten its casino license by 26 April. If that did not occur, the agreement says the contract may be terminated. At issue is the fact that the PokerStars’ casino application will not be ruled on by state gaming regulators until sometime in August. In its defense, PokerStars says that under the New Jersey Casino Control Act no purchase agreement can be terminated if an application is pending.

Irreparable harm is being cited by the Atlantic Club as the basis for their request. They content that if they have to wait many months until PokerStars gets its license they are likely to lose current competitive bids and potential profit on the property. They content that the market is hot right now and fear that it will cool by the time the restraining order expires. In addition, they believe that PokerStars may not get their license from the gaming officials in New Jersey. The fact that two former PokerStars’ executives are fugitives was cited as a reason for PokerStars to not get their license.

The two former execs are Isai Scheinberg and Paul Tate. Both were indicted in 2011 and remain at large. The Atlantic Club went on to say that Scheinberg still acts in the capacity of company executive. This allegation comes from a call between Scheinberg and Eric Matejevich, Chief Financial Officer for the Atlantic Club. The call took place just before the contract expired. A part of the agreed upon settlement between the U.S. Department of Justice and PokerStars was that Scheinberg had also agreed that he would no longer be a part of company affairs. The Atlantic Club contends that if he is still working in of the day-to-day activities, he is violating the agreement made with DOJ.

In addition to the above, the lawsuit also addresses the issue of some $11 million that has already been paid out since last year to the Atlantic Club. This was to keep the club running and it was in accordance with the agreement. An additional $4 million will be payable once the contract terminate. In their defense, PokerStars claims the $15 million purchase price for the casino is being paid and if the agreement is thrown out they will be left empty-handed.

Attorneys for the Atlantic Club were not impressed with that charge and state that PokerStars knew it was taking a chance when it agreed to buy the casino. Just because the NJ operating license was not approved by April 26 is the fault of PokerStars and no one else. They further contend that they are honoring the agreement as it was set forth.

June 11, 2013

Macau Gambling Revenue May Double By 2017

Filed under: Casino — Tags: , — OCE News @ 6:15 am

Those who follow gaming and gambling news already know about the amazing success Macau has had with its casinos and resorts. Macau is the only area in the huge country of China where casino gambling is legal. It has now been reported that Macau may see a doubling of its annual gambling revenues in as little as four years. This assessment came from a report issued by Nomura Equity Research.

Back in 2012, it was reported that Macau gaming revenues had hit $38 billion in US dollars. This was a record level. Even so, Nomura goes on to say that stronger consumer demand will almost certainly push revenues to $70 billion by the time 2017 rolls around. Also contributing to the increase is that officials in Beijing officials are now allowing even more cities to take advantage of the Individual Visa Scheme.

The study used growth rates for Las Vegas markets that took place between 1990 and 2005 for its template. It was able to conclude that a market that is undersupplied in Macau now will allow for very strong growth in the future. Also, Macau has a 3 percent annual limit when it comes to adding new gaming tables. This will help to ensure that a positive trend between supply and demand will continue.

The study went on to sat that Macau now has 57,187 gambling seats. This makes a ratio of one gambling seat for every 1891 people who live in Hong Kong and Guangdong. These areas are where most of those who gamble in Macau come from. In the US, the ratio is one gambling seat for each 227 people. It should be noted that that ratio stated in the report does not include other people living in China. Once those people are able to get into Macau easily, the revenues could be staggering.

Because they are having such huge success now, and see more success in the future, Macau is not too anxious to get into the online gaming market. There may be one exception to this, however. It has been reported that the most recent administrative regulations that govern slot machines has in it a section that is completely devoted to the operating mobile devices inside casinos. This new change is said to only be sensible if there are some types of plans to open sports betting.

In Macau, sports betting is not nearly lucrative as other types of betting. In 2012, it only brought in a little over $50 million. For that same period, sportsbooks in Nevada brought in almost $170 million. It has been reported also that while the general public may not be too interested in sports betting, investors are. As of right now, the contract for any sports betting is being held by Macau Slot. That contract was just renewed for another three years. No action can be taken on sports betting action until at least 2015, and by then the stakes at gaming tables may make it a worthless endeavor in comparison.

June 9, 2013

Paul Godfrey Fired and Board Resigns

Filed under: Casino — Tags: — OCE News @ 6:10 am

CEO for the OLG (Ontario Lottery and Gaming Corporation, Paul Godfrey was recently fired from position. As it happened, the entire board followed by resigning in protest. Needless to say, all of this news has created much confusion in this locale which is Canada’s largest province.

Speculation that something might be in works came out a few days prior to Godfrey’s removal. The dismissal of Godfrey came during a meeting with Charles Sousa, Finance Minister. After the meeting concluded, Godfrey announced to the press that no reason for his sacking had been given to him by the Minister or anyone else for that matter. He suggested that there were no known good reasons for his removal that he could think of and simply said that he had been fired.

Later, Minister Sousa did put out a statement that praised Godfrey for his work in turning around the OLG. He did not, however, offer any further information as to why Godfrey was fired.

It has been reported that Premier Kathleen Wynne is said to have list of possible replacement for Godfrey already in hand. In the meantime, Peter Wallace, cabinet secretary, will be the interim CEO. Unless something changes, however, he will not have a board to report to. The former board was shocked at Godfrey’s removal and resigned, all of them, in protest of the sudden action.

Premier Wynne has made it no secret that she does not support gambling. She took office back in February when Dalton McGuinty resigned the position. This happened long after the OLG had begun some sweeping changes and expansion plans which included some new casinos as well as the launch of legalized online gambling. It is reported that later this summer proposals for the casino as well as bingo software will be sent out to providers.

Godfrey later said that his most pressing concern about being fired is that it may stall all of the work that OLG has done so far. If the plans for expansion are indeed stalled, the province could see a loss of some $1.3 Billion from annual tax revenues. The province is already in deep financial debt and these added revenues would go a long way in helping the province. Godfrey went on to say that Premier Wynne had said to him that she wanted the OLG to go in a different direction. Godfrey believes the government cannot afford to do so at this time.

As of this writing, there are no details concerning if the old board will return to work or if a whole new board will have to set into place. Also, there are no details just yet as to how the removal of Godfrey and the loss of the board will affect any pending actions that may be in the works at this time. Further information is expected to be forthcoming, but no one at this time seems to be able or to be willing to discuss when this might happen. Certainly, residents of Ontario will be awaiting news.

June 7, 2013

Gambling Not the Biggest Atlantic City Draw

Filed under: Casino — Tags: — OCE News @ 6:09 am

In the past, Atlantic City, NJ was known for its gambling venues and that alone brought in a great deal of revenue. Now, however, as more casinos are going up in various states, people are not visiting Atlantic City primarily to gamble anymore.

A recent study suggests that many of those who come to Atlantic City now are doing so more for the beaches and other amenities that they are for gambling. This is a huge change from when the city was known as the second-largest gambling destination, only Las Vegas. It can be said that in earlier days, visitors to Atlantic City did not care much for the beaches or other venues. They were in the city to gamble, and gamble is what they did.

The change began when neighboring states such as Maine, Delaware, New York, Maryland and Massachusetts began to authorize their own casinos. This began only a few years ago, but has already made a big impact on AC casinos. In fact, Pennsylvania has now surpassed New Jersey as being the second-largest gambling state.

The study was conducted over the phone and included some 700 respondents. More than 38 percent of those responding reported that vacations were their main reason for going to Atlantic City. The study reported that only about 27 percent said that gaming and gambling were the reasons for going to Atlantic City. It was also reported in the study that the number of people who are visiting AC now who have children less than 18 has doubled. Two years ago, the number came in at about 9 percent. Now, the number is at about 18 percent. This increase is suggested to be because of the increase of family-friendly venues that are now in AC that were not there in years past.

The current Atlantic City gaming officials are not going down without a fight however. They, along with many New Jersey lawmakers, are working on a variety of new ways that will bring gamblers back. They still believe that AC is a premier casino location and have high hopes that they can pull this off.

A few months ago, NJ passed some laws that allow Atlantic City casinos the right to expand and to operate online casinos as well as offer sports books on their AC resorts. It has been reported that the online casinos may be operational and running by the end of this year. The sports betting initiative will need to go through some hurdles at the Federal level before it can become a part of this revitalization idea.

With any luck, AC will be able to bring back at least some of its most loyal visitors. The casinos and resorts that are now occupying space there depend on this revenue for their very existence. The full impact that other states opening their own casinos will have on AC will not be felt for a few more years. One thing is certain as more states see the value of having their own in-state facilities, the number of new casinos is certainly going to increase.

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