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The shuttered ‘cashless casinos’ in the Chinese island province of Hainan could be making a comeback following a recent court ruling.
About four or five years ago, resort operators on the island of Hainan launched so-called ‘cashless casinos,’ which resembled a standard casino gaming floor except all of the table winnings were paid in credits that could only be redeemed for non-gaming amenities at those same resorts.
The local authorities were quick to crack down on these cashless casinos, despite operator claims that they were part of a government-approved pilot program that would ultimately lead to real-money casinos on Hainan.
In February, the Intermediate People’s Court of Hainan overturned a lower court’s ruling stemming from the cashless casino fiasco that resulted in jail time for four staff members of the Mangrove Tree Resort. The court found that “the facts of the original judgment were unclear and the evidence was insufficient” and sent the case back to the lower court for retrial.
Ben Lee, managing partner at gaming consultancy iGamiX, told iGamingTimes that the Hainan high court wouldn’t have overturned the lower court ruling “without approval from Beijing.” Lee noted that Hainan’s tourism industry was overdeveloped and underutilized, and gaming reform was way of rewarding companies that invested in Hainan at Beijing’s urging.
The intention behind Hainan’s cashless casinos “was to invigorate the economy” but since other invigorating options had failed to move the needle, Beijing is “finally going to let them try this concept again. Online lotteries and sports betting are all part of this liberalization.”
The high court ruling, coupled with Beijing’s recent decision to permit sports lottery operations on Hainan, could lead to the launch of real-money casinos on Hainan, albeit not for another five or ten years. Lee predicted the cashless casinos would be trialed again for five years, but “between the fifth year onward to the tenth year, we think they may let the cashless casinos become full casinos.”
Whatever transpires and however long it takes, Lee added that Beijing was anxious not to repeat its perceived mistakes in Macau, meaning western casino companies would likely be left on the outside looking in at Hainan’s casino market.
The post Hainan’s ‘cashless casinos’ could return following court ruling appeared first on CalvinAyre.com.
Viewed from the outside, Steve Wynn’s ex-wife Elaine Wynn’s crusade against some of Wynn’s Board of Directors seems petty at first glance. 
Just more aftermath from a nasty divorce involving billionaires, where the wounds keep festering and never seem to heal. But Ms. Wynn may have a point to her battle other than the fury of a woman scorned, and shareholders may end up agreeing with her. Yes, maybe there is some revenge element in her actions, but that doesn’t look like the crux of it. And even now, two weeks before the shareholder meeting when a vote on the Board will take place, it seems she has already started to sway the decision-making process.
On April 27th, Ms. Wynn filed a definitive proxy statement with the SEC urging shareholders to oust Legacy Director John Hagenbuch from Wynn’s board, hinting that she would like to see others ousted as well. On the same day that proxy statement went out, Wynn CEO Matt Maddox told the press that he wants to change the name of Wynn’s new Boston project from Wynn Boston Harbor to Encore Boston Harbor. While mainstream media seems to be touting the vapid point that the company is trying to “clean its image” from Wynn’s now disgraced reputation, it really has very little to do with that. That’s a valid explanation for kindergarteners. “People say he did a bad thing so they don’t want to use his name anymore, children, so people aren’t reminded of the bad things they say he did. Now go on and play!”
It has much more to do with Ms. Wynn’s legitimate point that Wynn management suggested the possibility of divesting from Wynn Boston Harbor shortly after the announcement of a Massachusetts Gaming Commission investigation into the Board’s handling of the allegations against their former boss.
In Ms. Wynn’s own words:
Some members of the current board are directly implicated by the Massachusetts regulatory investigation. I do not know what the Commission will conclude, but I believe that the legacy directors would prefer that their actions not be scrutinized by the gaming officials.That is why I am concerned that not long after the announcement of the investigations, management suggested, for the first time, that the Company might divest Wynn Boston Harbor, which is scheduled to open in June 2019.
By changing the name, the Board looks like it’s trying to meet Ms. Wynn halfway and assure her that the resort will not be sold.
Wynn Resorts gets a government-granted monopoly on a luxury gaming resort in the northeastern United States by virtue of being the only company with a license, is expecting an estimated $800M to $900M in annual revenue from it, and then considers selling it before it even opens on the word of an investigation into the conduct of Wynn board members. Ms. Wynn has a right to be suspicious here.
It looks like the board, at least as currently constituted, may have prioritized protecting its own members over the interests of shareholders. If that is a valid suspicion, even if it ends up being not being true, then it would be prudent to withhold the reelection of the problematic director or directors, just to quell shareholder fears.
At issue is a $7.5M settlement between Steve Wynn and a former employee to quiet accusations of sexual misconduct. That settlement was not disclosed to regulatory authorities on its application for a gaming license for the Boston resort in 2012. Going through the possible scenarios, I don’t see how it could have possibly been disclosed. If it were, word would have gotten out and what eventually happened with Steve Wynn, would have happened way back then. I’m sure Wynn himself made sure that it was not disclosed, and I doubt that any board member would have been able to countermove.
Now, we can all make ourselves feel better by telling ourselves that had we been in the same situation, we would have “Done the Right Thing.” But going up against Steve Wynn, when he was invincible, is dangerous, so the fact that it wasn’t disclosed is understandable. While women caught up unwillingly in these sordid affairs are considered victims, men also caught up in the web unwillingly are called enablers without question. This seems unfair.
Let’s ask some deeper questions still, though. Why do gaming regulators need to know about a $7.5M settlement? What’s to investigate? Why does it have to be disclosed at all? (Even deeper: Why does the Massachusetts Gaming Commission exist?) Isn’t a settlement a private thing between two people? Yes, hush money is not a nice thing. But what do people in Boston who want to go to a nice gambling resort have to do with a settlement between Steve Wynn and one of his employees? Won’t it create jobs for people who need them? What about them?
What’s worse? A $7.5M settlement that was hidden from the eyes of bureaucrats or the fact that a group of bureaucrats has the power to grant a gambling monopoly to a single company, to the detriment of all its potential competitors and its customers who will be paying higher prices by virtue of the artificial constriction in supply?
The settlement not being disclosed does show a conflict of interest, but imagine the conflicts of interest we don’t know about involving the group of human beings with the power to grant Wynn Resorts a gambling resort monopoly over all of New England.
Let me be clear. Pushing Steve Wynn out was the right thing to do, whether he is innocent or guilty of the allegations against him. What he allegedly did was bad, so nobody should think I’m defending him. Having him around was bad for the company’s reputation, so it was bad for shareholders. And given the laws we have, not disclosing the settlement was and is a practical problem. So the next logical step looks to be getting rid of the board members who, whether they were so willingly or not, got caught up in the web when not disclosing the settlement to regulators. It doesn’t look good for the company either, and it does create conflicts of interest.
Elaine Wynn has a point, and I don’t see what keeping controversial board members, who just recently seemed interested in selling Encore Boston Harbor but settled on a name change, can do for the company. Keeping them on will just keep regulators sniffing and generate future conflicts of interest based on past mistakes. Let’s see how shareholders vote at the meeting.
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GVC Holdings completed the acquisition of Ladbrokes Coral ahead of what now seems to be an imminent crackdown on FOBTs, Playtech decided to cement its position in the Italian gambling market by acquiring one of its major players, Snaitech, The Stars Group announced that it would buy Sky Betting and Gaming, and most recently Cirsa selected American buyout firm The Blackstone Group as the preferred bidder for its diverse business portfolio.
The consolidation wave has just struck the field and more and more merger and acquisition deals are likely to be announced in the coming months. However, it is important to say that while it is yet to be seen what the future has in store, all of the above-mentioned transactions are of a scale that would change not just their own operations, but also the industry as a whole amid regulatory pressure in key regulated markets, growing competition within the field, and customers seeking greater diversity and innovation.
Here is a bit more about each of the four deals.
GVC Holdings and Ladbrokes Coral
The deal was confirmed on December 22, 2017 and was completed at the end of March 2018. It practically created a gambling powerhouse with presence across all sectors and across multiple regulated jurisdictions.
It was announced back in December that Ladbrokes Coral would be valued at between £3.2 billion and £3.9 billion, depending on the UK Government’s decision regarding the highly controversial fixed-odds betting terminals. Ladbrokes Coral operates the largest number of such devices across the UK and a proposed cut of the maximum stake these accept to just £2 would hit its profitablity significantly. Reports emerged last week that British MPs have actually agreed to that proposal and their final decision is expected to be announced within the next few weeks. GVC Holdings’ shares plummeted 6% last week after the reports appeared in multiple news outlets.
While Ladbokes Coral will certainly suffer a heavy blow from the looming crackdown, it might be able to offset some of the losses by improving its online product. GVC has a solid online precense and its new asset will certainly be able to leverage its new parent company’s experience and positions across multiple jurisdictions. What is more, GVC has a good record of successfully integrating new businesses into its existing operations, so its tie-up with Ladbrokes Coral now, and for now, seems to be like a profitable move, particularly for the latter.
Playtech and Snaitech
To boost its operations in that particular vertical, the company set sights on another major European market and a company with strong presence in it. It became known in early April that Playtech has entered an agreement to buy Snaitech, one of Italy’s largest gambling groups by annual revenue generated.
Playtech will first acquire a 70.6% stake in the company. It expects to complete the transactions by the third quarter of the year. It will then launch a mandatory takeover offer for the remaining 29.4% stake in Snaitech, which it believes it will obtain by the end of the year.
Playtech will pay €846 million for the Italian company, including its debt. The deal is expcted to generate cost synergies of €10 million.
Snaitech currently operates both online and land-based gambling businesses, including 1,600 betting points across Italy and online sports betting and casino games. Last year, the company generated revenue of €890 million and core earnings of €136 million. That combined with the rapid growth of Italy’s gambling market attracted Playtech to the company.
Playtech’s CEO Mor Weizer that the transaction will secure Playtech with a better position in Europe’s largest gambling market by revenue generated. The executive pointed out that Italy’s market was worth well over €20 billion last year.
The Stars Group and Sky Betting and Gaming
The deal valued Sky Betting and Gaming at $4.7 billion and once completed will create the world’s largest listed gambling company. The transaction is expected to be completed in the third quarter of the year, pending approval from the Toronto Stock Exchange, NASDAQ, and several gambling regulators.
The acquisition will give The Stars Group the opportunity to work to leverage SkyBet’s expeirence in the sports betting field. The Canadian gambling giant launched its sports betting product, BetStars, in 2016 and is now looking to improve it and gain positions in key regulated betting markets with it.
As for SkyBet and its benefits from the deal, the company will be able to extend its global precense across multiple jurisdictions where its new parent company already operates. SkyBet currently has one of the largest customer bases in the UK and also operates in Italy and Germany.
Blackstone and Cirsa
Cirsa is Spain’s largest gambling operator. The company’s porfolio includes both land-based and online gambling businesses, including casinos, online gambling websites, betting points, bingo halls, and recreational gaming machines, among others. Aside from Spain, it also operates in Italy and several Latin American countries.
The post Consolidation Wave Strikes Global Gambling amid Regulatory Pressure and Heavy Competition appeared first on Casino News Daily.
