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I. Nelson Rose Gaming Guru  Is a New York City casino license worth $1 billion?20 April 2022
By I. Nelson Rose No government has ever asked $1 billion just for the right to build a casino. That still is true. But that’s how much New York Governor Kathy Hochul had originally wanted for casinos in New York City. Casino executives and lobbyists were able to get the leaders of the State Legislature to put pressure on the Governor. Now the state’s $220 billion budget for 2023 includes only a $500 million fee for each of three downstate casinos; although, that might rise to as much as $750 million. This is in addition to minimum gross gaming revenue taxes of 25% on slots and 10% on table games. The question is whether any casino, even one in Times Square, is worth a license of half or three-quarters of a billion dollars. Although the answer to that might be, “Yes,” I would advise against writing that check unless it comes with legislation guaranteeing that the state and city won’t come back later asking for more later. In 2009, I was hired by the State of Delaware to recommend the tax rate for its new sportsbooks. I looked at every jurisdiction I could find everywhere in the world. What I discovered was that every government had raised its tax rates or fees on casinos, once they were open and successful. When I mentioned this during a speech before leaders of state legislatures, one of the Mississippi delegates challenged me. “We never raised our casino tax rates,” he said. “That’s true,” I responded. “You just imposed a $1 per head fee on every patron entering a casino. Since no casino is going to stop and ask every patron for $1, they just accepted it as a new tax.” One legislator bragged to me that his state raised the gambling tax every year until a third of the casinos went bankrupt. Then they lowered it. Illinois even raised its highest tier casino tax to 70%, before the governor went to jail. Casino owners rightly feel that a tax above 50% makes the state the senior partner. The only jurisdiction I am aware of that did not raise gambling taxes in Singapore. Before the two casinos opened in 2010, the government locked itself into not increasing its take for 12 years. By 2019 the government couldn’t stand it anymore. So, starting in March 2022 mass-market tax went from a flat 15% to a tiered 18% and 22%; premium player tax from 4% to 8% and 12%. The lesson for every casino company about to write that $500 million check to New York is to make sure that all tax rates and fees are locked into the gaming legislation. Remember the proposed NY casino tax rates are minimums. And governments always get greedy. Texas’s poker clubs are in trouble1 February 2022
A little-known fact, known by few: Texas has poker clubs. These are by no means just a couple of tables in the back of a bar. The Lodge Card Club in Round Rock outside of Austin has more than 60 tables. The games — mostly Texas Hold ’em, naturally — are played for cash. PokerAtlas in Houston is advertising a no-limit game, with $10 & $25 blinds, $2,000 minimum buy-in. ... (read more)
China has plans for Macau19 November 2021
All six casino concessions in Macau are about to expire. The big question is whether the U.S.-based companies – MGM, Wynn, and Las Vegas Sands – will be able to continue operating some of the most successful casinos in the world. Of much less importance is whether Macau will let other operators come in. ... (read more)
New York's unforced error8 November 2021
Last week I wrote a blog explaining why the plan to issue online sports betting licenses in New York will be a disaster. Not only will the tax rate be the highest in the nation – possibly a ridiculous 71% – but the entire law is on its face unconstitutional. In a case involving fantasy sports, trial court ... (read more)
What should daily fantasy sports do now?The two big daily fantasy sports (DFS) operators, FanDuel and DraftKings, and their backers are, in the immortal words of former President George H.W. Bush, in "deep-doodoo." But lawyers with legal shovels can probably dig them out.Gambling and the Law: Are daily fantasy sports legal?Technology is speeding up changes in the world of gaming. It took almost two centuries for poker to evolve from Straight Poker – five paper cards dealt face down with no draw – to Internet Hold ‘Em linking players using computers in different states and even on different continents. Decades passed before ... (read more)Gambling and the Law: Culture clashIt is not easy to do business in Asia. Or in the U.S.This is especially true of heavily regulated businesses, like legal gaming. And the problems are compounded when an individual who is a product of one culture wants to expand into a foreign market.Sometimes, the barriers are structural. How, for example, ... (read more)Gambling and the Law: Be Afraid! Be Very Afraid!Opponents of legal gambling are notorious within the industry for making up numbers. Robert Goodman, for example, is a discredited "anti" and the founder of the grandly named, though now defunct, "United States Gambling Research Institute." He is infamous for proclaiming, "The American Insurance ... (read more)Gambling and the Law: 'Blackjack and the Law' wins case for casinoIn one of the very first cases heard by the federal court in Las Vegas in 2011, Harrah’s (now renamed Caesars) once again won the right to kick out card-counters. Roger L. Hunt, Chief U.S. District Judge for Nevada, based his decision, in part, on a book I co-authored in 1998, BLACKJACK AND THE ... (read more)I. Nelson Rose |
I. Nelson Rose |
