[toc]The first half of 2017 was mostly sluggish in the world of gambling news. What started with a flicker finished with a flash though. It ended up being quite a busy year after all.
New Jersey found itself in the national spotlight on several key issues with broad implications. Headlines included an online gaming partnership with Nevada and Delaware, a far-reaching sports betting hearing in front of the US Supreme Court, and some inflammatory comments from a pair of adversarial casino owners.
Much of what happened this year will continue to frame the conversations in the next one too. What follows are a handful the stories worth keeping an eye on as the calendar ticks over.
Christie brings sports betting to SCOTUS
Sports betting ended up being the biggest topic of conversation in 2017. If things shake out right, it could be front and center once again in 2018.
New Jersey has tried to repeal its prohibition on sports betting several times over the past few years. Each time, sports leagues have blocked the legislation in court, citing a 1992 federal ban called the Professional and Amateur Sports Protection Act (PASPA). This year, Gov. Chris Christie went all the way to the Supreme Court to argue that the Act is unconstitutional.
It looks like he might be successful too.
In October, SCOTUS announced that it would hear one hour of oral arguments in Christie vs. NCAA. It’s already a bit of a win for the state. The Court only hears a fraction of cases submitted to it, and it is prone to overturning lower decisions when it does so.
The two sides presented their cases before the Justices in December, and a decision is expected in the first half of 2018.
Most of the experts who attended the hearing walked out handicapping the state as the favorite to win. Like sports betting itself, though, trying to infer Justices’ opinions is an inexact science.
The potential ramifications are hard to overstate. If PASPA is struck down, states would be free to make their own decisions regarding sports betting.
New Jersey would be at the front of the line for legalization, but many more are queuing up right behind it. Eight or ten states are considering legislation, and a handful have fully passed sports betting laws pending the outcome of Christie.
For now, at least, Nevada is still the only state with legal, single-game sports betting.
Online poker slows, online casino grows
When 2017 began, the online gaming industry was generating just about $18 million in total monthly revenue. That number was split roughly 8:1 between casino and poker, with poker accounting for just over $2 million. In slope, casino was trending upward, while poker was stagnating, or slightly in decline.
Those trends continued in 2017. By the end of the year, poker made up less than $2 million of a bottom line that is approaching $21 million per month. The overall revenue numbers are climbing, though, thanks to the success of NJ online casino products.
Golden Nugget is the one driving the bus. Its namesake, Betfair, and SugarHouse platforms are earning more than $6 million per month, leading the market despite not even having a poker product. The group of brands accounts for nearly a third of total iGaming revenue in the state.
The Nugget’s increase is the fruitage of a handful of incremental improvements made late in 2016.
First, the addition of SugarHouse brought some brand recognition for Pennsylvania gamblers, in particular. SugarHouse has a successful land-based casino in Philadelphia and a customer base that straddles state lines.
Golden Nugget also became the first licensee with 400 games in its digital library, and it’s still expanding. It rolled out live-dealer games on its online client in 2016, and the product has been an unexpected hit.
The games are hosted live in a studio inside the casino and available for online betting. Golden Nugget and Betfair are still the only places you can find them right now.
There’s no reason to think online casino growth won’t continue in the same manner in 2018. The industry is still shy of its fifth birthday, and the landscape is still being painted in.
Poker might be getting a bit of a lifeline, too, with interstate agreements starting to take shape in the regulated states.
Sharing the wealth with Nevada, Delaware
New Jersey is one of four states with legal online gambling, and it has always been a ring-fenced market. Players in New Jersey are limited to the games (and opponents) in their own state.
In October, Christie announced that he was opening up the virtual borders. New Jersey joined Nevada and Delaware in a liquidity-sharing agreement dubbed the Multi-State Internet Gaming Alliance. The three states will soon combine their player bases into one pool, which should provide a shot in the arm for online poker revenue.
Pennsylvania is new to the online gaming party but may be considering an MSIGA membership, itself. And as more states consider online gaming legislation in the coming years, the Alliance hopes to start a domino effect. The more states enter the pact, the more other states will be on an island if they don’t.
New Jersey appears to be setting its gaze further along the horizon, too. Late in the year, Sen. Ray Lesniak introduced legislation that would pave the way for international gambling agreements, too. Current state law requires gaming servers to be physically located in Atlantic City, but Lesniak is seeking to repeal that portion of the law.
There are some immediate benefits that would come to the online poker community, but the state has some extra motivation now, too. Both pieces of interstate movement could be seen as early positioning for a sports betting industry.
Hard Rock bets on Atlantic City
He had a contentious relationship with lawmakers, too. Senate President Steve Sweeney moved to strip Icahn’s casino license in the event that he tried to reopen without the union. Gov. Christie vetoed that bill, but the Taj was still shuttered with no future in sight.
It’s a fixer-upper, to be sure, but that’s still a bargain for 17 acres of prime Boardwalk real estate. Icahn said he lost more than $300 million operating the resort, which initially cost Donald Trump $1.2 billion to open in 1990.
Hard Rock has serious plans for the space, too. It initially allocated $375 million to the renovation project, then increased that spend to $500 million. The details are still coming together, but Hard Rock says it will have 2,400 slots and 130 table games, several music venues, and a full compliment of resort-class amenities.
The one thing it won’t have? A Trump sign. In fact, CEO Jim Allen says the new building will be completely unrecognizable from its current visage.
“There will not be one — and underscore the word ‘one’ — piece of design, architecture, minaret or anything left over from the Taj Mahal,” Allen said. “We are removing it all.”
The new Hard Rock Atlantic City should open in the summer of 2018.
Wait… who owns TEN?
It’s strange to think that the ownership of a $2.4 billion resort would be hazy, but that’s just the kind of year 2017 was. It has suddenly become unclear who owns TEN (or Revel, if you please).
The property has already had an interesting history for all the wrong reasons. The city’s most expensive resort opened in 2012 and closed in 2014 amid a pair of bankruptcy filings. Real estate developer Glenn Straub swooped in and purchased it for just $82 million in 2015, but he’s yet to get the doors open.
Despite not having a gaming license, Straub promised to reopen the property as TEN in February of 2017. That date, like others he’d promised, came and went without incident.
Now, it appears Straub might not even own the building anymore. In August, court filings revealed mortgage documents from a proposed buyer. Denver-based AC Ocean Walk LLC had apparently secured an agreement of sale to purchase the property from Straub. Businessman Bruce Deifik is to oversee the new venture.
Deifik had no comment for the press, while Straub took a page out of his own book and denied all knowledge of the transaction. “I can file anything — it doesn’t mean it’s true,” Straub said of the real estate documents. “I can file that I’m the king of Arabia at the clerk’s office.”
Evidence continues to mount, though. Two months later, the Division of Gaming Enforcement revealed that Deifik’s group had also applied for an NJ casino license. The application includes a $100,000 non-refundable fee, further indication that the rumors are serious. AC Ocean Walk LLC is incorporated in New Jersey and lists TEN’s address as its primary place of business.
Straub continues to deny. “Categorically, there is no deal,” he said.
The financials of the rumored sale are undisclosed so far, but it’s likely pennies on the dollar of TEN’s original price tag.