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I. Nelson Rose Gaming Guru  China has plans for Macau19 November 2021
By I. Nelson Rose 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. A concession is not a license: Each of the three concessionaires and three sub-concessionaires already has the right to open as many casinos as they want. They also can have unlimited numbers of partners, some of whom are the real owners and operators of their casinos. The current limit on concessions really only serves to cut out two groups: Casino companies that failed to get in when they had the chance, namely Caesars and Genting, and wealthy Mainland Chinese companies like railroads, which like the cash flow produced by legal gambling. All current concession-holders will undoubtedly be renewed. No matter how bad the relationship between the US and China – short of a shooting war – economic ties require that everyone play nice. American companies spent billions of dollars building the most massive casinos in the world; there will be no more foreign investments if Macau says, “Thanks. Now, goodbye.” (Legally, if concessions are not renewed, the casino companies still own the land- leases and buildings, which, without legal gambling, would be the most massive white elephants in the world.) There has also been a lot of anguish over the length of the renewals. The original concessions were 20 years. But the political and economic realities requiring renewals now will continue to exist in ten years. The real danger comes from Beijing, which has decided to reassert control over Macau. The People’s Republic of China was never happy with the pro-democracy politics of Hong Kong. It seized the opening it was given by COVID and Donald Trump’s weakness and cracked down, eliminating all demonstrations and free press. Having gotten control over Hong Kong, Beijing turned to Macau. The Chinese government has always wanted a bigger share of Macau casinos’ profits to stay in China. So, all American casino companies will have to sell more than 10% to local Macanese partners. And the government will decide when companies can declare dividends. Top officials are concerned with the enormous amounts of cash fleeing the Mainland, often through smuggling. A new law puts more restrictions on junket operators, especially when cash is involved. The PRC is a Marxist government and believes in imposing 10-year plans on its society. The massive Harbor Plan envisions remaking most of southern China, in a giant crescent from Hong Kong to the border with Vietnam. Factories will be built, villages turned into urban centers. Land-poor Macau will be given control over most of the large, neighboring Hengqin Island, where the University of Macau already built a $1.2 billion new campus. Beijing has told Macau to diversify. My guess is casino companies will be told if they want their concessions renewed, they will have to contribute tens of millions of dollars to build soccer stadiums on Hengqin, and more public transport. The southern tip of Hengqin is designated a non-gambling center for resorts, hotels, and amusement parks for Mainland Chinese tourists. Many will be funneled to the casinos in Macau; the new passage from Hengqin can handle 80 million people a year. To ensure Macau’s casinos will change their focus from high-rollers to the mass market, the government will now have a representative on every casino’s board of directors. The proposed new laws will also require that a government representative will supervise day-to-day operations. This is the most frightening proposal. I have had direct experience with Chinese government bureaucrats. When I first started teaching Gaming Law at the University of Macau, Business Class tickets from L.A. to Hong Kong cost $10,000; Economy Class only $3,000. So I said I would bring my wife and daughter and fly Economy Class, and the University would save $1,000. “No,” I was told. “Full Professors have to fly Business Class.” To get from Hong Kong to Macau, I took the Jetfoil. “Oh! You went Business Class,” I was told. “You are only allowed to go Economy Class.” So, I was reimbursed $10,020 instead of $10,029. By the end of next year, these same government bureaucrats will be in charge of the day-to-day operations of the Wynn Macau, MGM Grand Macau, and the Venetian Macau, the largest casino-hotel in the world. What could possibly go wrong? 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)
New York's sports betting disaster25 October 2021
On Friday, 22 October the New York State Gaming Commission announced what the tax rates will be for anyone unfortunate to win the right to operate online sports betting. Most of the bids were probably already in, but the Gaming Commission graciously gave the companies involved til Monday to amend their complex, multi-million-dollar proposals. ... (read more)
Gambling and the Law: The power of television5 March 2019
The more things change, the more . . . What? They remain the same? They change? One of the last book stores in Los Angeles recently closed. And record stores are just as rare. This doesn’t mean that people aren’t buying, or at least reading, books. And more individuals have copies of recorded music, mostly downloaded, than when it was only available on vinyl or tape. ... (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 |
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