Seminole Tribe of Florida (with an Assist from Disney) Protects Florida Gambling Monopoly


The Walt Disney Company spent $20 million in support of a ballot initiative that would give Florida voters the right to prevent the expansion of casino gambling within the state, a measure designed to protect their tourism interests and the state’s brand as a “family friendly” destination. Amendment 3 of the Florida Constitution passed on Tuesday evening, with more than 70% of the state’s voters backing the law that will require new casino projects to gain the support (60% must vote in favor) of the state-wide voting public prior to breaking ground; few (if any) projects are likely to meet the 60% benchmark. MGM Resorts International (seeks licensure in state), the Miami Dolphins and the Tampa Bay Buccaneers (both NFL teams are hoping to profit on sports betting) were among those that publicly opposed the measure; each of the 3 entities spent $500K on the proposed amendment’s “no” campaign.

Howie Long-Short: Disney (DIS) was invested in the amendment passing for its own selfish reasons, but there’s no bigger beneficiary to the “Voter Control of Gambling” amendment passing than the Seminole Tribe of Florida (spent $16 million on “yes” campaign). The Tribe dominates the Florida gaming landscape, operating in the state under a Federal gaming exemption afforded to Native Americans with little competition; the amendment’s passage ensures the moat remains around their business.

The long and costly battle for gaming company expansion into the state just became infinitely more difficult, but don’t expect casino operators to give up on Florida. Dan Alkins (Chairman of the committee opposing the ballot initiative) said should the measure pass “there’s going to be litigation just continuing on forever.” The state’s size/population, reputation as a tourism destination and abundance of retirees makes it a highly desirable locale for casinos to take up residence.

It’s worth pointing out the irony in the Miami Dolphins opposition of the amendment, while playing their home games at Hard Rock Stadium; a chain owned by the Seminole Tribe and the one that will pay the franchise $250 million over the next 18 years for naming rights.

Speaking of MGM Resorts International (MGM), the company is reportedly exploring a potential merger with Caesar’s Entertainment (CZR) to form a gaming behemoth (think: +/- 50% of all hotel rooms in Las Vegas and Atlantic City). While there’s no offer on the table (and it’s possible regulators could determine a merger would create “undue economic concentration), it’s known that “without a CEO, Caesar’s is in play” and that it’s CZR’s activist investors (own +/- 25%) driving the tie-up talk; a merger would allow the combined companies to eliminate redundant “overhead and marketing” expenditures. Wynn Resorts (WYNN) and the Genting Group (OTC: GEBHY) have also been names as companies that could have interest in a CZR (-25% YTD) take-over. With licenses in 13 states (49 casinos), the company is well positioned to benefit from wide-spread sports betting legalization.

Fan Marino: Howie mentioned Las Vegas and Atlantic City, so it seems like an opportune time to note that Eilers & Krejcik is projecting New Jersey sportsbooks will generate more sports betting revenue than those in the gambling mecca, as soon as 2021 ($442 million vs. $410 million). The boutique research firm (with a focus on the gaming industry) supported their thesis by pointing out NJ gamblers can make “sports betting transactions” on credit card (as opposed to being forced to make a deposit in a casino), that the state’s sportsbooks have created a highly competitive online/mobile market (think: pricing/promotions) and that state’s licensees have had “very high rates of black market recapture.”

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Steve Wynn Accused of Sexual Misconduct; WYNN Shares Drop 10%, Could Fall Another 10%


Wynn Resorts (WYNN) chairman and CEO Steve Wynn has been accused of sexual misconduct by multiple women. The allegations, spanning several decades, include charges that Wynn pressured employees to engage in sexual activity. WYNN says the claims are part of a smear campaign related to his divorce and orchestrated by ex-wife Elaine Wynn, seeking a revised divorce settlement. While Steve too has personally denied the allegations (calling them preposterous), it’s been reported that a former manicurist received a $7.5 million settlement (personally paid by Steve, not WYNN) after being forced to have sex with the billionaire casino mogul. Shares of the hotel & casino operator declined -10.2% (down to $180.29 at Friday’s close), following news of the allegations.

Howie Long-Short: A recent WYNN securities filing stated, “if we lose the services of Mr. Wynn, or if he is unable to devote sufficient attention to our operations for any other reason, our business may be significantly impaired”; a viable concern after watching the falls of Roger Ailes and Harvey Weinstein. Should Wynn be forced to resign (no succession plan is in place), gaming analysts believe the stock could drop another 10%; having assigned a 20% “Wynn premium” to the stock’s value. Earlier in the week the company hit a 3-year high ($201.99), following release of an earnings report that reflected a 184% YOY increase in profits (revenue was up 30% to $1.69 billion) during Q4 2017.

Fan Marino: If the Massachusetts Gaming Commission (they’ve opened an investigation) substantiates the allegations, WYNN’s unlikely to receive a gaming license in the state. That’s a big deal with the company working on the biggest private construction endeavor in state history. Commission spokeswoman Elaine Driscoll is on record saying, “integrity of our gaming licensees is of the utmost importance”, indicating potential findings by the enforcement bureau pose a serious threat to the $2.5 billion Boston Harbor resort & casino project scheduled to open in 2019; particularly noteworthy with legalized sports betting likely to become reality before the end of June.

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Las Vegas sportsbooks (MGM, WYNN, LON: WMH) are preparing for what could be their worst loss in history, should heavy favorite Floyd Mayweather lose this weekend’s mega-fight to MMA superstar Conor McGregor. With nearly 90% of all bets made thus far on McGregor, the line has moved from McGregor as a +$1,100 underdog to just +$400 (, 24 hours before the fight. While experts agree, McGregor is unlikely to win, many are hoping to see the controversial Mayweather suffer his first career loss. Casino operators believe the smart money, from experienced gamblers, will come in late on Mayweather and balance the books.

Las Vegas books staring down Mayweather-McGregor disaster

Howie Long-Short: When Clemson beat Alabama for the National Championship in January, Vegas said it was one of the 3 biggest losses on a CFB game in the history. WYNN reported high 6 figure losses, while MGM report low 6 figure losses, on the game. If McGregor wins this fight, one Vegas property stands to lose $3 million+. Those are big stakes!

Fan Marino: Heart says McGregor, mind says Mayweather. Glove weight irrelevant. You can’t knock Mayweather out, if you can’t catch him.