Each week, CasinoBeats breaks down the numbers behind some of the industry’s most interesting stories. In this latest edition we look at two US states, Kindred’s acquisition of Relax Gaming’s remaining shares, the decline in gambling sponsorships in sports and MGM Resorts International’s “largest directly sourced renewable electricity project worldwide”.
Virginia marked a record breaking month in May – which saw it become the quickest state to reach $1bn in sports betting – with a 19 per cent gross gaming revenue increase.
Wagers in May produced £23.2m in GGR, compared to $19.4m in April. Adjusted GGR also rose to 15.7m from 13.8m the month previous, which yielded £2.4m in state taxes, including $59.527 for problem gambling support.
Since launch, sportsbooks have generated $85m in gross gaming revenue and $5.6m in state taxes.
Moreover, recording $1.1bn in wagers in just over four months after launching, PlayVirginia – which tracks the state’s gaming market – noted the record is the “latest sign of how successful” the launch of sports betting has been for the Commonwealth.
Major operator Kindred Group has taken up the option to acquire the remaining 66.6 per cent of outstanding shares in slots developer Relax Gaming.
At an implied value of €320m for 100 per cent of the shares – on a cash and debt free basis – the acquisition of Relax accelerates Kindred’s product control and differentiation capabilities.
In order to secure continued integrity of Relax Gaming’s B2B customers, Kindred said its intention is to keep Relax Gaming as an independent entity within the Group with a separate board of directors and management team.
Kindred’s ambition is to continue investing in Relax Gaming to cement its position as a leading B2B igaming supplier by further strengthening Relax Gaming’s product offering and broadening its B2B customer base.
In conjunction with the completion of the transaction, all existing employee share option programmes in Relax Gaming will be exercised and Relax Gaming’s management, who are committed to the future success of the company, will retain an ownership of seven per cent of total fully diluted shares in the company.
Meanwhile Kindred’s ownership stake in Relax Gaming will be 93 per cent after the completion of the transaction and the exercise of the options.
Due to the closures of casinos in South Africa as a result of COVID, Sun International’s share price dropped by almost nine per cent.
Following an announcement from the South African president, Cyril Ramaphosa, casinos in the country will be closed until at least July 11 due to an increase in infections of the Delta variant of COVID-19.
“The new regulations require our casinos and restaurants to close, but given the new restrictions on leisure travel into and out of Gauteng, alcohol and the curfew, our hotels and resorts will struggle to operate, so we have taken a decision to temporarily close them too,” explained Graham Wood, chief operating officer for hospitality at Sun International’
“We are mindful that the government is concerned about the risk of transmission and the need to curtail the rise in new infections. However, these restrictions will have a further negative impact on our tourism industry, the thousands of people employed and the surrounding local communities.
“We remain hopeful that the worst of the latest COVID-19 outbreak will have subsided 14 days from now so that we can safely reopen our hotels, resorts and casinos.”
MGM Resorts International has launched its 100-megawatt solar array – lauded as the hospitality industry’s ‘largest directly sourced renewable electricity project worldwide’.
The array now produces up to 90 per cent of MGM Resorts’ Las Vegas daytime power needs, spanning 65 million square feet of building across 13 properties, along with more than 36,000 rooms on the Las Vegas Strip, including Bellagio, ARIA, Mandalay Bay, MGM Grand and The Mirage.
The launch marks a milestone in MGM Resorts’ long-term climate strategy and significantly accelerates progress toward its 2025 goal to reduce the company’s emissions by 45 per cent per square foot.
Additionally, MGM Resorts has announced two new goals it has developed in line with guidance provided by the Science-based Targets Initiative, and has submitted for consideration by the Initiative: to reduce absolute scope one and two Greenhouse Gas emissions 50 per cent by 2030 (2019 base year) and to source 100 per cent renewable electricity in US and 80 per cent globally by 2030.
Colorado’s betting volume was enhanced to nearly $250m in May due to the playoff runs of Colorado Avalanche and Denver Nuggets.
According to PlayColorado, the month of May highlighted the importance of local teams’ success to bookmakers, especially in the offseason of sports betting. Sportsbooks accepted $249m in May wagers online and in retail, equivalent to $8m bets per day – revealed in data released by the Colorado Division of Gaming.
Wagers were up from 1.9 per cent from $244.5m in bets in April and up nearly 10-fold from $25.6m in May, 2020; the first month of sports betting in the state.
Moreover, May’s wagers produced $15.2m in gross gaming revenue, down 13.7 per cent from $17.6m in April but up from $2.6m in May 2020. After promotional credits, sportsbooks reported $5.9m in net sports betting proceeds, which yielded $635,641 in tax revenue.
The betting and gaming industry suffered a decline in the number of sponsorship agreements with professional sports teams, according to latest figures from research firm Caytoo.
Gambing has seen its share of sponsorships almost halve from 15.3 per cent to 8.1 per cent across football, rugby and cricket, falling into fourth place from the top position held two years prior.
Caytoo notes that this trend ‘has been driven entirely by football’ – although gambling remains the most prevalent sponsor for the world’s most popular sport, it has still seen its share decrease by more than half from 32.7 per cent to 15.2 per cent.
Although gambling sponsorships have been identified as a significant revenue driver for football – in addition to other sports – several Premier League clubs held a meeting earlier this year to discuss future marketing and branding arrangements.
As a result of the review of the 2005 Gambling Act, sponsorship deals between professional football clubs and the betting and gaming industry come under increasing scrutiny.
A blanket ban on gambling sports sponsorships has been predicted as ‘the most likely outcome’ of the review, and reportedly has the support of Prime Minister Boris Johnson and his cabinet.
Caesars Entertainment and Columbus Exposition and Racing agreed a partnership which will see Caesars build and operate a Harrah’s casino and racetrack in Columbus, Nebraska – estimated to cost around $75m.
Expected to be completed in 2022, the casino development is said to feature a new one-mile horse racing surface, a 40,000-square-foot-casino and sportsbook with more than 400 slot machines and 20 table games, along with a restaurant and retail space.
“When Nebraska voters opened up gaming at racetracks, we knew that our experience in the casino industry combined with our commitment to horse racing made Harrah’s a perfect fit,” said Tom Reeg, CEO of Caesars Entertainment
“We look forward to creating an all-new Harrah’s experience in Columbus and connecting it to our Caesars Rewards network across the country.”
“We are excited to welcome Harrah’s to Nebraska,” added Tom Jackson, managing partner of CER. “When looking for a casino operator partner, Harrah’s brand recognition and established code of commitment to its employees, customers and the communities in which they operate proved an easy selection. In addition, their superior rewards program and marketing team, high-performing entertainment network and best-in-class gaming experience check all the right boxes for this partnership.
“As we work to create a new entertainment destination for the midwest, this partnership will be an important economic driver and job creator for Columbus and the surrounding communities.
“It also further reinforces our commitment to the hardworking people involved in the Nebraska horse racing industry. We look forward to providing new gaming and entertainment experiences to our valued customers.”
MGM Resorts International has become the sole owner of CityCenter Holdings after the company entered an agreement to purchase Infinity World Development Corp’s 50 per cent interest.
The price of the $2.125bn dollar purchase represents an implied valuation of $5.8bn based on a $1.5bn net debt, after giving effect to the recently closed sale of a two-acre parcel of land.
In addition, the company has entered into an agreement with Blackstone in order to monetise the Aria and Vdara real estate assets, pending the close of the equity purchase agreement between MGM Resorts and Infinity World.
The funds managed by Blackstone will acquire the real estate for $3.89bn in cash, representing a multiple of 18.1x rent. Both of the properties will be leased to MGM Resorts following their attainment, with an annual rent of $215m.