Inside Asian Gaming

inside asian gaming MAY 2015 92 Morgan Stanley Slashes US Online Gaming Forecast Morgan Stanley has cut its estimate of the potential US Internet gambling market by nearly half. The firm now estimates the nationwide online betting market at $2.7 billion by 2020, down from an initial estimate of $5 billion. In a report issued last month, the firm predicts no additional states will approve Internet gambling this year, but foresees California, Pennsylvania, New York and Illinois getting into the game within a few years. Three states—Nevada, New Jersey and Delaware—have legalized Internet gambling, but online betting is off to a slow start. It took in $135 million last year; Morgan Stanley initially forecast $678 million. “We continue to believe that there is a material runway for growth, but results have been disappointing,” the firm wrote. “Legislative processes continue to be slow as lawmakers remain unconvinced that online gaming is currently worth the hassle for limited tax revenue.” The report cites several factors holding back the Internet gambling market, including problems with payment processing, a lack of effective advertising, difficulties with geolocation technology intended to ensure that a gambler is within a particular state’s boundaries, and a thriving offshore Internet gambling market. Morgan Stanley forecasts the 2017 online market will be $410 million, down from an initial estimate of $1.3 billion. It predicts 15 states will legalize online gambling by 2020, with legalization in larger states prompting smaller ones to follow suit. It also believes a federal ban on Internet gambling remains unlikely, but is a growing risk. Two Las Vegas Strip Operators Go Cashless at Poker Tables Two major Strip casino operators recently made changes to their poker operations that may reflect a broader push to beef up their anti-money laundering efforts, reports online news site Vegas Inc . Effective last month, MGM Resorts International and Wynn Resorts no longer allow cash at their poker tables. Previously, poker players could use cash without first converting it into chips. Some experts think the change is motivated by casinos’ attempts—in the face of pressure from financial regulators—to keep a closer eye on the money moving through their properties. The casinos themselves, however, have not publicly said that’s the reason behind the policy shift. “This change is a result of one of our regular reviews of our policies and procedures, and puts our poker room operation in line with how we operate our other table games,” said MGM Resorts spokesman Gordon Absher in a statement. Players who like to use cash while playing poker may soon have even fewer options on the Strip. A spokeswoman for the Venetian and Palazzo said that the resorts are “reviewing our current policies and procedures” due to the changes at MGM Resorts and Wynn Resorts. But Caesars Entertainment casinos still allow cash at poker tables, and the company doesn’t plan to change that right now, according to a spokesman. Wynn Resorts Swings to a Loss in Q1 Wynn Resorts Ltd cut its dividend last month as it swung to a quarterly loss amid steep declines in Macau gaming revenue. The quarterly dividend was reduced to 50 cents a share from $1.50 and comes as a corruption crackdown, tighter regulations and a weakening economy on the mainland have cut into Wynn’s business in Macau. The dividend cut will save the company about US$101.5 million in the quarter. The results also follow an intense public battle with Elaine Wynn, the company’s co-founder and third-largest shareholder, after shareholders voted not to return her to the board. For the most recent period, Las Vegas-based Wynn reported revenue from its Macau operations fell 38% to $705 million, with table games turnover in its VIP segment declining 52%. Average daily hotel room rates fell 2.1% to $331, while occupancy fell to 97.5% from $98.1% a year earlier. In addition to its majority-stake at Wynn Macau, Wynn Resorts owns a resort in Las Vegas and is developing a resort in Everett, Mass., north of Boston. In the latest quarter, Wynn’s Las Vegas operations posted a 1.6% increase in revenue to $387 million. Room revenues were down 3.3%, and occupancy fell to 83% from 88%. Overall, Wynn reported a loss of $44.6 million, or 44 cents a share, compared with earnings of $227 million, or $2.22 a share, in the year-ago period. Excluding preopening costs and other items, profit fell to 70 cents a share from $2.32 a share a year earlier. Revenue fell to $1.09 billion from $1.51 billion. INTERNATIONAL BRIEFS Wynn Macau