Atlantic City Information

 

Casino Reinvestment Development Authority (CRDA) Luxury Tax Revenue Bonds downgraded by Fitch – Fitch Ratings downgraded the CRDA bonds from BBB+ to BBB. Fitch considered COVID-19-related revenue declines and anticipated slow recovery of the Atlantic City casino industry in its negative outlook for the bonds: “The 'BBB' rating level reflects heightened uncertainty about the strength of taxable activity through the recovery period and the vulnerability of receipts to further pressures, including those posed by prolonged public health concerns.” Fitch indicated in their analysis that the “resumption of taxable activity at a reduced level” was evidence of recovery already taking place.

 

Sister Jean’s Kitchen reopens as an emergency food pantry – As reported by The Press of Atlantic City, The Community Food Bank of New Jersey-Southern Branch has partnered with the local nonprofit to reopen the kitchen’s longtime home in the Victory First Presbyterian Church, at the corner of Pennsylvania and Pacific avenues as an emergency food pantry. The location was forced to close in 2019 when the city deemed the church uninhabitable due to continued deterioration of the building, and damage from Superstorm Sandy. The pantry will be open Tuesdays 10 a.m. to 1 p.m. and Thursdays 3 to 6 p.m. distributing 32-pound boxes designed to provide 14 complete meals to families.

 

Stockton University breaks ground on Phase II project in Atlantic City- On October 14, Stockton University held a groundbreaking ceremony celebrating the start of Phase II construction for its Atlantic City campus. The estimated $64 million residential dormitory expansion project is being developed as a public/private partnership with the Atlantic City Development Corp. (AC Devco). It is scheduled to open in 2023 and will increase the university’s residential capacity by 416 beds. The University opened a 533-bed Boardwalk residence hall and three-story academic building in fall 2018 as part of Phase I. State and local leaders gathered to praise the project and Stockton University’s presence in the city.

 

Two popular Atlantic City restaurants close permanently due to coronavirus – As reported by The Press of Atlantic City, Buddakan and The Continental, two popular dining concepts operated by Philadelphia restauranteur Steven Starr and the former Playground Pier, will remain closed permanently. The two restaurants, regarded among the city’s top eateries, employed more than 100 people combined. 

 

New Jersey Gaming News

 

Borgata first in Atlantic City to reopen poker room – As reported by The Press of Atlantic City, Borgata Hotel Casino & Spa reopened its poker room, the largest in the city, on October 21. The room has 30 spaced out tables with partitions between each player. Masks are required and spectators are not permitted. Borgata will only offer live cash games on seven-handed tables to begin with. Tournaments have not yet been scheduled.

 

Sale of Bally’s moves forward following meeting of Casino Control Commission- As reported by The Press of Atlantic City, after a public meeting on November 4, on November 5 New Jersey’s Casino Control Commission granted Twin River Worldwide Holdings interim casino authorization, the next step toward full licensure following the company’s $25 million purchase of Bally’s Atlantic City from Caesars Entertainment Inc. and VICI Properties. The commission approved the authorization, with the stipulation that $25 million in capital improvements should begin within the first year of Twin River taking ownership of the Bally’s property, and that no less than $75 million be spent on capital improvements in the first three years. According to an October 28 press release, Twin Rivers will be known as Bally’s Corporation effective November 9. The casino will retain its name, although the footprint of the building is expected to change. Caesars will retain ownership of The Wild Wild West Casino and the William Hill Sportsbook, and, according to the Associated Press, FanDuel will open a retail sportsbook elsewhere on the property. 

 

National Gaming News

 

5Dimes reaches $46.8 million settlement with US Department of Justice, admits illegal U.S. sports betting operations, money laundering and wire fraud – According to Legal Sports Report, 5Dimes a Costa Rica-based sportsbook operating illegally since at least 2011, reached a settlement with the U.S. Department of Justice admitting to illegally accepting wagers and making payouts to U.S. bettors and transferring more than $46.8 million earned from these activities. The company forfeited $46.8 million and in return will be permitted to pursue licensing to conduct legal, regulated gaming activity. An attorney for 5Dimes indicated that the next step for the company will be trying to become licensed to operate in New Jersey. Further coverage of the 5Dimes settlement from Legal Sports Report provides context for the agreement, suggesting it represents a new strategy of civil settlements rather than criminal crackdowns for federal officials dealing with illegal offshore sports betting.

 

American Gaming Association (AGA) President and CEO gives Annual State of the Industry Address at virtual Global Gaming Expo (G2E) 2020 – According to a release from the AGA, President and CEO Bill Miller offered a positive outlook for the industry as it begins to recover from the impact of COVID-19. Miller said that more Americans view gaming more positively than ever before. He cited the American Attitudes on Casino Gaming 2020 report recently released by the AGA, which found that 9 in 10 (89%) American adults viewed gambling as an acceptable form of entertainment and fifty percent (up five points in two years and up 16 points in 10 years) had a favorable impression of the industry. A fact sheet, prepared from the report, highlights survey respondents’ recognition of gaming’s positive impact on communities. Two-thirds said gaming behaves responsibly (69%), benefits the economy (69%) and creates jobs (63%). The annual G2E conference (October 27-28) went virtual in 2020 due to COVID-19. G2E content will be available year-round as the conference expands its “education, matchmaking, and networking opportunities beyond October.”

 

Federal Wire Act Case complicated by death of one of three presiding judges – According to Online Poker Report, one of the three judges who heard the Federal Wire Act Case, New Hampshire Lottery Commission v. Barr in June, Judge Juan Torruella, died on October 26. The judges, also including Sandra Lynch and William Kyatta, were expected to issue their verdict in November, six months after hearing the case. Judge Torruella’s death may or may not have a significant impact on the verdict, depending on how close the judges were to finalizing their decision. Whatever the decision, it is expected to have a major impact on online gambling in the US.

 

Illinois Gaming Board grants approvals for Fairmount Park (St. Louis) racino project– According to Legal Sports Report, The Illinois Gaming Board granted Fairmount Park near St. Louis a master sports wagering license and found the racetrack preliminarily suitable for a gaming license. The track, through a partnership with FanDuel Sportsbook, is expected to transition to a racino, offering slots and table games in addition to sports betting.

 

New Jersey sports betting handle surpasses Nevada for eighth time in September 2020 – According to Legal Sports Report, New Jersey may be on a path to becoming the new sports betting capital. New Jersey’s nationwide record sports betting handle ($748.5 million) in September 2020 out paced Nevada’s statewide record handle ($575 million) for the same month. Online/mobile sports betting platforms appear to be giving New Jersey an edge over Nevada with 90% of New Jersey sports wagers received online compared to 55% of Nevada’s wagers received online.

 

Pennsylvania launches online live dealer casino games – According to Online Poker Report, on October 21, Evolution Gaming began a two-day soft launch period with three online casino partners (BetRivers, PlaySugarHouse, and DraftKings). Pennsylvania is only the second state, after New Jersey, to introduce this style of play. The selection of games and number of tables is expected to dramatically expand after the testing period.

 

Stats Perform, sports data provider for FanDuel, DraftKings and others, victim of cyber attack- According to Legal Sports Report the data provider, Stats Perform was hit by a cyberattack on October 10 and remained at limited functionality as of October 27. FanDuel and DraftKings which experienced an hourlong outage on October 10 due to the breach, were able to switch to alternate data providers. StarPerform is not the only company in the U.S. betting market to have suffered an attack. Issues at GeoComply and Kambi also caused outages in October.

 

Tennessee becomes 20^th U.S. jurisdiction to launch sports betting – According to Legal Sports Report, sportsbooks in Tennessee went live at 12:01 a.m. on November 1. The state has four licensed sportsbooks to date (BetMGM, Draft Kings, FanDuel and Tennessee Action 24/7) and three additional operators have applied (Churchill Down’s BetAmerica, William Hill and Wynn) but did not launch on November 1. Since Tennessee has no casinos, all bets will be placed via a mobile device. The Tennessee Education Lottery, which oversees sports betting for the state, is not capping the number of licensed operators, however, sportsbooks are being required to hold a minimum 10% on average for the year and pay 20% tax on revenue.

 

Hospitality & Tourism News

 

American Hotel & Lodging Association (AHLA) updates Safe Stay initiative with newly released CDC guidance for hotel operations – On October 28, AHLA announced new endorsements from Infectious Diseases Society of America, the Association for Linen Management, and a certified industrial hygienist and infectious disease expert, Dr. Murray Cohen, for their Safe Stay protocols. The latest version of the industrywide initiative incorporates new guidelines from the CDC for hotel operations including meetings and events, elevator operations, food service operations, workplace health safety plans and making daily room cleanings ‘by request only’ to limit in-person contact.

 

Americans planning fall vacations with cautious optimism – According to a survey conducted by AAA, 67% of US adults planning a vacation before the end of the year report some degree of uncertainty about whether they will be able to take their vacation. Of those planning a trip before the end of the year, one in five expects to book their trip within one week of traveling. Most trips (80%) are expected to be road trips, with top destinations including Denver, CO, Las Vegas, NV, Los Angeles, CA and San Diego, CA.

 

Global tourism revenue may not fully recover until 2023 – According to research released by McKinsey & Company, global tourism revenues may cumulatively drop $3 trillion to $8 trillion before returning to pre-COVID-19 levels in 2023 or 2024. Optimistic scenarios predict recovery to 85% of 2019 revenue by 2021 with full recovery by 2023, however pessimistic scenarios see recovery as low as 60% of 2019 for 2021 delaying further recovery into 2024. Domestic tourism is expected to recover 1-2 years earlier than international tourism, with recovery favoring countries with less dependence on air travel. Other factors will dictate the relative speed of various countries’ recovery including strength of economy, COVID-19 response and access to land-based tourism options. 

 

Travel trade groups back Hospitality and Commerce Job Recovery Act of 2020 ­– As reported by Travel Weekly, the U.S. Travel Association, ASTA, American Gaming Association and the American Hotel and Lodging Association (AHLA) have expressed support for legislation introduced by Sens. Catherine Cortez Masto (D-Nevada) and Kevin Cramer (R-North Dakota) which aims to "provide comprehensive relief and recovery measures for the convention, trade show, entertainment, travel and hospitality industries." The legislation proposes to support gaming, hospitality and tourism businesses through a series of tax incentives. Examples of these incentives include a general business credit for restaurants to cover the cost of reopening or expanding service after being closed or forced to reduce service levels due to the pandemic, an enhanced  tax credit for employee-retention, and tax credits for the travel expenses (up to 50% of qualified travel expenses, max $3,000 for a family of 5) of Americans traveling through 2023.

 

U.S. hotel construction pipeline declines in Q3 2020 as developers closely monitor impact of COVID-19 – According to the U.S. Hotel Construction Pipeline Trend Report by Lodging Econometrics (LE), reported by Lodging Magazine, the U.S. hotel construction pipeline declined 7% by projects and 6% by rooms year-over-year at the end of Q3 2020 (5,282 projects/655,026 rooms) compared to Q3 2019. Announcements of new projects have been ‘muted’ and at the end of the quarter, the number of pipeline projects being canceled or put on hold totaled 191 projects/21,859 rooms. As of Q3 2019 there were a total 1,610 projects/216,136 rooms under construction. New hotel openings (559 hotels/68,712 rooms in Q3 2020) outpaced the number of projects entering the construction phase. An additional 326 projects/35,324 rooms are expected to open before the end of 2020 totaling 925 projects/104,036 rooms for the year.