Caesars' announcement that it is expanding sports betting to its casinos in New Jersey and Mississippiwas good news for its technology partner Scientific Games.
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One aspect of the story that went virtually unmentioned is that Scientific Games is an American company.
The other major deal announcement came from MGM, which is entering a 25-year joint venture with GVC to take advantage of interactive gaming opportunities in online casino, poker, and sports betting.
GVC is a British company. And that's not surprising, since the majority of online gaming operators and gaming technology suppliers are not US companies.
As part of the deal presentation by MGM and GVC, the companies presented slides explaining what they were each bringing to the deal. The GVC's slide ranks it number one among its peers by annual revenues as an online gambling operator.
Market leaders in the gambling industry
The other eight companies GVC compares itself to are:
- Bet365—British
- PaddyPower Betfair—British
- William Hill—British
- The Stars Group (incl Sky Betting and Gaming)—Canadian
- Kindred Group—Swedish
- Betsson—Swedish
- 888 Holdings—British
- Jackpotjoy (owner of Intertain)—British
Not a US company in sight. If we expand our list of gaming companies to those involved in gaming technology, we might expect a greater US presence. After all, the US leads the world in IT:
- Kambi–Swedish
- IGT—Italian
- SBTech—Isle of Man
- SportRadar—Norwegian/Swiss
- BetGenius—British
- Mionmi—British/international
- CG Technologies—USA
- Scientific Games–USA
Finally, an American company! CG Technologies operates in Nevada. It is licensed as the operator of the CG race and sports book. It also provides technology to partners such as the Atlantis Casino on Paradise Island in the Bahamas.
Scientific Games owns a few other gaming technology companies whose names are familiar:
- NYX Gaming Group Limited
- WMS Industries
- Barcrest
- Bally Technologies
Scientific Games created the first secure instant lottery ticket in 1974. Since then, it has grown into a multi-billion dollar company with a NASDAQ market capitalization of over $4.5 billion. The company calls Las Vegas, Nevada home base. Scientific Games employs around 9,500 people worldwide.
Why is the US so far behind?
The Europeans seem to dominate online gambling either as operators or technology suppliers. With a few honorable exceptions such as Scientific Games, American companies and even Chinese companies don't get a look in.
Gambling has long been illegal in China. Resultingly, its largest companies have generally stayed away from the area. Companies like Tencent, which have a major ownership stake in esports titles have tried to keep out of the real-money gambling business.
In 2016, Caesars sold its online gaming business to a consortium of Chinese companies fronted by Alibaba founder Jack Ma. The one piece of the business which stayed in Caesars' hands was WSOP.com, the real-money online poker site active in New Jersey and Nevada.
In the US, the barriers to developing an online gambling business have been the Wire Act, PASPA, and the UIGEA.
The Wire Act has now been re-interpreted to apply only to sports betting with the result that states can legislate to establish their own online casino and poker games.
PASPA has been overturned by the US Supreme Court, so now states can add sports betting to their online portfolios.
Tide turning for US gaming companies
The spread of legalized gambling is making it more attractive for the banks to revise the blanket anti-gambling transaction policies enacted post-UIGEA. Easier deposits and withdrawals make it more likely that casual US bettors will get online.
In short, many of the barriers that prevented US companies from becoming global online gaming players have now been dismantled.
The online gambling market may be dominated by foreign companies, but the expansion of state-regulated sports betting could change all that.
Mergers and acquisitions to take US casino companies into the online space are something to look out for over the next couple of years. Within a decade, it may no longer be unusual for a US casino company to partner with a US online technology provider.
LAS VEGAS (AP) — In the 1970s, Gary Carano wouldn't have imagined his family's company would one day be the talk of the gambling industry.
But nearly a half-century after his father, the late Don Carano, opened the Eldorado Hotel Casino in Reno, that's precisely what Eldorado Resorts Inc. became this week when it reached an agreement to purchase Caesars Entertainment.
'It's beyond belief in a way,' Carano said. 'At the same time, we're confident about where we are now and where we're going.'
Assuming the $17.3 billion deal gets the necessary regulatory and shareholder approval, Eldorado, which only went public in 2014, is poised to become the largest gambling company in the country. It will grow from 26 properties and 18,000 employees to 81 properties and about 81,000 employees.
While Eldorado shareholders will own a majority of the combined company — about 51% — the merged company will bear the Caesars name.
The deal, announced Monday, had been rumored for some time, though it was anything but a sure thing after Eldorado officials first inquired about the purchase.
Carano, Eldorado's chairman and the eldest of five siblings, said the company was turned away when it first asked about a possible purchase of Caesars last year.
One aspect of the story that went virtually unmentioned is that Scientific Games is an American company.
The other major deal announcement came from MGM, which is entering a 25-year joint venture with GVC to take advantage of interactive gaming opportunities in online casino, poker, and sports betting.
GVC is a British company. And that's not surprising, since the majority of online gaming operators and gaming technology suppliers are not US companies.
As part of the deal presentation by MGM and GVC, the companies presented slides explaining what they were each bringing to the deal. The GVC's slide ranks it number one among its peers by annual revenues as an online gambling operator.
Market leaders in the gambling industry
The other eight companies GVC compares itself to are:
- Bet365—British
- PaddyPower Betfair—British
- William Hill—British
- The Stars Group (incl Sky Betting and Gaming)—Canadian
- Kindred Group—Swedish
- Betsson—Swedish
- 888 Holdings—British
- Jackpotjoy (owner of Intertain)—British
Not a US company in sight. If we expand our list of gaming companies to those involved in gaming technology, we might expect a greater US presence. After all, the US leads the world in IT:
- Kambi–Swedish
- IGT—Italian
- SBTech—Isle of Man
- SportRadar—Norwegian/Swiss
- BetGenius—British
- Mionmi—British/international
- CG Technologies—USA
- Scientific Games–USA
Finally, an American company! CG Technologies operates in Nevada. It is licensed as the operator of the CG race and sports book. It also provides technology to partners such as the Atlantis Casino on Paradise Island in the Bahamas.
Scientific Games owns a few other gaming technology companies whose names are familiar:
- NYX Gaming Group Limited
- WMS Industries
- Barcrest
- Bally Technologies
Scientific Games created the first secure instant lottery ticket in 1974. Since then, it has grown into a multi-billion dollar company with a NASDAQ market capitalization of over $4.5 billion. The company calls Las Vegas, Nevada home base. Scientific Games employs around 9,500 people worldwide.
Why is the US so far behind?
The Europeans seem to dominate online gambling either as operators or technology suppliers. With a few honorable exceptions such as Scientific Games, American companies and even Chinese companies don't get a look in.
Gambling has long been illegal in China. Resultingly, its largest companies have generally stayed away from the area. Companies like Tencent, which have a major ownership stake in esports titles have tried to keep out of the real-money gambling business.
In 2016, Caesars sold its online gaming business to a consortium of Chinese companies fronted by Alibaba founder Jack Ma. The one piece of the business which stayed in Caesars' hands was WSOP.com, the real-money online poker site active in New Jersey and Nevada.
In the US, the barriers to developing an online gambling business have been the Wire Act, PASPA, and the UIGEA.
The Wire Act has now been re-interpreted to apply only to sports betting with the result that states can legislate to establish their own online casino and poker games.
PASPA has been overturned by the US Supreme Court, so now states can add sports betting to their online portfolios.
Tide turning for US gaming companies
The spread of legalized gambling is making it more attractive for the banks to revise the blanket anti-gambling transaction policies enacted post-UIGEA. Easier deposits and withdrawals make it more likely that casual US bettors will get online.
In short, many of the barriers that prevented US companies from becoming global online gaming players have now been dismantled.
The online gambling market may be dominated by foreign companies, but the expansion of state-regulated sports betting could change all that.
Mergers and acquisitions to take US casino companies into the online space are something to look out for over the next couple of years. Within a decade, it may no longer be unusual for a US casino company to partner with a US online technology provider.
LAS VEGAS (AP) — In the 1970s, Gary Carano wouldn't have imagined his family's company would one day be the talk of the gambling industry.
But nearly a half-century after his father, the late Don Carano, opened the Eldorado Hotel Casino in Reno, that's precisely what Eldorado Resorts Inc. became this week when it reached an agreement to purchase Caesars Entertainment.
'It's beyond belief in a way,' Carano said. 'At the same time, we're confident about where we are now and where we're going.'
Assuming the $17.3 billion deal gets the necessary regulatory and shareholder approval, Eldorado, which only went public in 2014, is poised to become the largest gambling company in the country. It will grow from 26 properties and 18,000 employees to 81 properties and about 81,000 employees.
While Eldorado shareholders will own a majority of the combined company — about 51% — the merged company will bear the Caesars name.
The deal, announced Monday, had been rumored for some time, though it was anything but a sure thing after Eldorado officials first inquired about the purchase.
Carano, Eldorado's chairman and the eldest of five siblings, said the company was turned away when it first asked about a possible purchase of Caesars last year.
'They weren't interested,' he said.
After activist investor Carl Icahn started buying shares of Caesars and pushing for a sale of the company, that seemed to change, Carano said.
Icahn and Eldorado have a history together. Icahn's company, Icahn Associates Holdings LLC, sold Tropicana Entertainment to Eldorado in a deal announced last year.
'I think (Icahn) was comfortable with us as a company,' Carano said. 'When we approached Caesars again, we were able to make something work.'
Eldorado made another high-profile acquisition in 2017, essentially doubling in size with the purchase of Isle of Capri Casinos. Caesars will add 43 properties in the U.S. and 55 worldwide.
'As far as if we planned to grow this much or if we've taken advantage of opportunities that have been presented, I think it's both,' Carano said. 'During the last five years, many opportunities have presented themselves, and we have then determined whether they are the right fit for Eldorado Resorts.'
The Caesars brand, its coveted Caesars Rewards customer loyalty database and the iconic Caesars Palace property fit the bill.
'There's only one Caesars Palace in the whole world,' said Carano's son, Anthony, Eldorado's president and chief operating officer.
As with any change in ownership for a behemoth like Caesars, industry watchers are busy speculating what the sale will mean going forward for Caesars, its employees and the brand.
'Eldorado is a company known for executing on synergies and operational efficiencies,' said John DeCree, an equity research analyst with Union Gaming Group. 'You're looking at a company that really empowers property-level management at each individual casino. The Caesars organization has largely had a centralized cost base with a lot of corporate overhead.'
The Culinary Workers Union, which represents about 25,000 workers at Caesars and Eldorado properties, has already expressed concerns about the merger.
'Eldorado announced cost-savings of $500 million in the first year of the combined company,' union President D. Taylor said in a statement. 'Where are they going to cut?'
'We will not stand by idly if the proposed Caesars-Eldorado transaction will lead to significant job losses, worse wages and benefits for our members, and lower state gaming tax receipts in the many communities where members we represent work and live,' Taylor said.
Anthony Carano said it was too early to talk about any specific plans but that 'for hourly employees and management, I think there will be very little turnover.'
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'For a long, long time, Caesars was the gold standard. It has come down a little these past couple of years, but we're going to bring that standard back. A lot of current Caesars employees are going to be on our team,' he said.
The team concept is important to the Caranos, who are 'all a bunch of ex-athletes,' Gary Carano said.
His brother, Glenn Carano, played quarterback for UNLV from 1974 to 1976 and later played for the NFL's Dallas Cowboys.
His grandfather on his mother's side, Bill Ireland, was UNLV's first football coach and later served as the school's athletic director from 1973 until 1980. And Anthony Carano played baseball at UNLV and UNR.
'We give our employees the tools they need to succeed,' Anthony Carano said. 'Our employees are the people in the trenches. They're the ones who know their team members and players the best. Our company culture is all about the importance of being part of a team.'
There could also be some other big shifts as a result of the merger. During a conference call, Eldorado CEO Tom Reeg said the company expected to sell some properties, perhaps on the Las Vegas Strip.
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'I think that there's more Strip exposure than we would need to accomplish our goals with our regional database,' Reeg said. 'So, I would expect that we would be a seller of a Strip asset, but that decision has not been made.'
DeCree said the sale of a large property would provide a cash infusion that 'would go a long way toward managing the balance sheet, which is what people are focused on now. I think it's very possible we see a Las Vegas casino trade over the next 12 or 18 months.'
Already, Treasure Island owner Phil Ruffin and Houston Rockets owner Tilman Fertitta have expressed interest in Strip properties that might hit the market.
'We wouldn't be interested in the Rio, but we'd be interested in something on the Strip if something were to be available,' Ruffin said.
Meanwhile, those who have watched the meteoric rise of Eldorado Resorts marvel at the trajectory the company has taken.
Reno Mayor Hillary Schieve said it has 'been incredible to see the growth and success of Eldorado Resorts through the years,' calling it a 'true homegrown success story.'
Becky Harris of UNLV's International Center for Gaming Regulation said the rise of Eldorado Resorts is the epitome of 'the Nevada dream.'
'The Caranos are a hometown family that has grown Eldorado into this huge, successful company. It's quite the story,' she said.
With the sausage-making negotiation process now in the rearview mirror, Gary Carano can afford to reflect about just how far Eldorado Resorts — which started with a 282-room hotel casino that had 12 gambling tables in 1973 — has come.
Though Don Carano died in 2017, Gary Carano said his father's legacy is stronger than ever.
'I get kind of sentimental about it all,' he said. 'We came from small beginnings. It's a bit surreal.'
___
Information from: Las Vegas Sun, http://www.lasvegassun.com
