Open sesame: MGM set to capitalize in UAE

MGM’s Arabian dreams, North Carolina nixed, UK health lobby win, UKGC on misunderstandings +More

Compliance+More

Sep 12, 2023

Good morning. On today’s agenda:

MGM Resorts is sitting pretty as UAE gears for gaming.
North Carolina’s casino push hits the buffers.
UK health lobby notches a win on suicide prevention strategy.
UK Gambling Commission addresses risk checks misunderstandings.

You must see the movie the sand in my eyes.

Arabian dreams

MGM Resorts is “well positioned” to capitalize on the UAE’s move to legalize casino resorts, says CEO.

What are the odds: MGM has a 25-acre site in the Persian Gulf region that began life as a hotel-only project in 2015, but as luck would have it is now plumb in the middle of a region that could rival Las Vegas and Macau.

“It will be one of two things: a casino or a retail center,” CEO Bill Hornbuckle told investors at the recent Bank of America Securities 2023 Gaming and Lodging conference in New York.
“We’re well positioned. It’s in the ground as we speak. Dubai today is as big as Vegas, it’s a $3bn-plus market, we will wait for it.”

Get the party started: The United Arab Emirates recently announced a new federal body called the General Commercial Gaming Regulatory Authority (GCGRA), which will create a “regulatory framework for a national lottery and commercial gaming”.

Gambling is currently banned under Sharia law, but following the launch of the regulator each of the seven Emirates rulers will decide on whether to allow gaming in their regions.
Hornbuckle said he was confident of MGM’s chances given its close business relationship with the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum.
“There’s a gaming decree signed but not yet released,” he said. “The ruler is our partner and we believe we can push it forward to gaming.”
Another plus for MGM is the appointment of its former CEO Jim Murren as chair of the GCGRA.

Footprints in the sand: When the dust settles, the operator expects to eventually lease the casino, Hornbuckle said. “It has to be a sizable piece of the real gaming business,” he said. “What we are not going to do is take our brand, our company, our database of customers and get an 8% to 10% vigorish. That ain’t happening.”

Standing in MGM’s way of being the first licensee is Wynn Resorts, which has plans for a nearly $4bn UAE property, Wynn Al Marjan Island.
On an earnings call last month prior to the announcement of the GCGRA, Wynn said the planned resort would have a gaming area, hinting that it was only a matter of time before the desert kingdom embraced legalization.

Cyberattack

Defcon 3: Separately, MGM Resorts was the subject of a cyberattack yesterday, which saw the reservation system go down and put a number of slots at some of its Las Vegas establishments out of action.

The Las Vegas Review Journal carried a statement from the company – emailed from a Gmail account because its internal email system was also down – that said it had “quickly began an investigation with assistance from leading external cybersecurity experts”.
“We also notified law enforcement and took prompt action to protect our systems and data, including shutting down certain systems.”

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North Carolina fail

Proposals for casino expansion fail to gather enough support.

The House speaker in the North Carolina state legislature Tim Moore has told Republican colleagues that a plan to open up to four new casinos will not be included in the state budget after failing to gain enough supporters in the GOP caucus.

The budget needs the 61 Republican House votes to pass, and in an email Moore said “there are not 61 Republicans willing to vote for the budget if it includes gaming”.
A meeting about a budget bill that excludes gaming will take place this week.

US notebook

Missouri’s six professional sports teams are continuing to push for legalized sports betting, with four possible ballot initiatives being put to the Secretary of State in an effort to get approval on next year’s referendum, according to local media.

St. Louis Cardinals president Bill DeWitt said the teams are working together and that, while the four initiatives are slightly different, plans are to quickly narrow it to one.
The MLB’s Kansas City Royals issued a statement in support of the sports-betting legalization efforts.

AGA: US consumers continue to report high levels of responsible gaming engagement, according to survey data from the American Gaming Association, with eight out of 10 gamblers aware of at least one responsible gaming resource. That figure rises to 91% for sports bettors.

Past-year gamblers also report high confidence in the effectiveness of responsible gaming tools, policies and initiatives, with 85% believing deposit limits work and 78% agreeing that time limits are also effective.

UK health check

Harmful gambling has been recognized for the first time as a factor to be addressed as part of the UK government’s suicide prevention strategy.

Dominant factor: In laying out the cross-government Suicide Prevention Strategy published yesterday, the Department of Health and Social Care (DHSC) said harmful gambling was a “new priority” as it seeks to halve the number of suicides in the UK over the next five years.

The report noted there was “increasing evidence” of the relationship between harmful gambling and suicide, especially among younger age groups.
“Although reasons for suicide can be complex, we do know that gambling can be a dominant factor without which the suicide may not have occurred,” it added.
“Action therefore needs to be taken to address the harms of gambling, including suicide, and reach people at risk.”

Two sides now: Notably, in a letter to the chair of the Department for Culture, Media and Sport select committee published last week addressing the misuse of statistics when it comes to gambling, UK Gambling Commission CEO Andrew Rhodes said there were no “robust figures on the prevalence of severe harms” such as gambling-related suicide.

“This is, in part, because this is an extremely difficult area to develop an accurate picture of, as the reasons people take their own lives can be exceptionally complicated, with multiple factors being potentially important.”
The Samaritans recently waded into the debate, criticizing Betting and Gaming Council CEO Michael Dugher for trying to “evade recognition of the established link between gambling and suicide risk” when he used similar language as Rhodes to say suicide is complex.

UK risk checks

The UK Gambling Commission seeks to address what it calls a “very high level of misunderstanding” about what the current consultations have to say on financial risk checks.

The Commission has sought to clarify the proposals contained within the consultation of financial risk checks in order to explain what CEO Andrew Rhodes said was “misinformation” in the media and on social media.

In a blog posting, Rhodes said what the Commission is trying to do is “make sure that when people are responding to our consultation they’re doing so with the right information”.
The GC reiterated the proposals would see frictionless checks instigated for the estimated 3% of accounts that would exceed the limits as set out by the Gambling Act Review.
These checks would take place primarily via a credit reference agency, “with no impact on credit score”.

The Commission said that “nearly all customers would have a credit reference file, which could hence be checked frictionlessly. It continued that, in the “few cases where this can’t happen”, then the operator would be obliged to ask for the customer to consent to sharing via open banking.

The Commission said this would likely amount to an estimated 0.3% of accounts.
Only where there is no credit file and consent is not given to sharing of data via open banking would the customer be asked to provide other evidence of financial circumstances.
“This means that only an estimated 0.3 percent of account holders would ever be asked to provide information such as payslips or bank statements,” Rhodes’ blog argued.
On the issue of vulnerability checks, the Commission said a “light-touch” check using only publicly available data would be employed.
“These would be carried out on around 20% of accounts and most of those checked will not be inconvenienced at all,” the GC said.

Carry on at your convenience: It said the “key myth” around the types of check proposed was that they would cause inconvenience to a “significant proportion” of consumers.

But when viewed in light of the level of problem gambling rates associated with online gambling as measured by the 2018 Heath Survey, the GC said the proposals as laid out were “proportionate”.

BHA wades in

Horse’s blanket: On the same day that Rhodes was appearing in front of the Culture, Media and Sport select committee, the CEO of the British Horseracing Association warned during a speech at a reception in parliament against taking a “blanket approach” to affordability.

While noting that “no one in British racing wants to see someone come to financial harm as a result of betting on horseracing”, Julie Harrington said the industry had been “taking steps to look at what more we can do as a sport to encourage socially responsible betting”.
But she added that the measures as outlined in the White Paper around financial risk and vulnerability checks were “not appropriate”.
“We look forward to further discussions with both DCMS and the Gambling Commission about how the impact on racing fans, and the industry as a whole, can be decreased,” she said.

The levy: Harrington also made the case for an extended levy to cover the international racing provided by UK operators to UK customers. “The status quo cannot remain,” she said, suggesting that British racing was “increasingly falling behind” its international counterparts when it comes to prize money.

She added that the BHA was currently in negotiations with the Betting and Gaming Council to see if a “solution can be agreed without the need for government intervention”.
In response, DCMS minister Stuart Andrew said the government was currently reviewing the proposals with regard to international racing.
“It is a priority for me that we come to an evidence-based outcome of the Levy review,” he added.

Singapore denial

Singapore has denied it was pressured by China to conduct a billion-dollar money laundering case linked to illegal gambling syndicates.

Strait dope: In an interview with Chinese media, Singapore’s Home Affairs and Law minister K. Shanmugam said the probe had been ongoing for months after multiple suspicious activity reports were triggered.

In August, Singapore police arrested 10 foreigners, including individuals from Cyprus, Cambodia, China and Turkey, following an islandwide raid executed by more than 400 officers.
Speculation was rife that the arrests were linked to a visit by China’s foreign minister Wang Yi on August 10. However, Shanmugam said there was no connection between the two events.
More than $1.8bn in suspected criminal assets was seized, with the group accused of involvement in illegal online gambling and various scams overseas, with the intent on washing the cash through Singapore.
The individuals held multiple passports that had been issued by China, hundreds of millions of dollars in cash foreign currencies, jewelry and luxury vehicles also totalling hundreds of millions of dollars.

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European notebook

The Netherlands: The Dutch gambling regulator has launched an investigation into whether an operator was using cash back bonuses to attract players, a practice that was outlawed last November. The regulator said it was alerted last month that an unidentified licensed operator had breached the rule, so it acted, and the operator immediately ceased its offer. The investigation for additional breaches will cover the entire Dutch online gambling market.

Ireland: Nearly a quarter (22.9%) of 16-year-olds gambled for money during the past 12 months, according to a new report published by the Institute of Public Health and the TobaccoFree Research Institute Ireland. The legal gambling age in Ireland is 18.

France: The Rugby World Cup, which kicked off this past weekend in Paris with a French victory over New Zealand, will see 13% of adults bet on the seven-week-long tournament, according to a survey commissioned by the National Gaming Authority (ANJ).

The survey found that 25% of French people who plan to watch the event intend to bet on the matches. This rises to 44% among 25-34-year-olds.
The ANJ has created a new responsible gambling awareness campaign promoting safer gambling tools such as deposit limits to counter the influx of first-time bettors.

UK: Gaming and amusement trade association Bacta completed its strategic reorganization with the announcement of members elected to its new National Council. John Bollom was elected president, and Scottish representative Joseph Cullis was named vice-president.

The National Council’s elected members include Peter Davies from Inspired Entertainment, Tony Boulton of Merkur UK, Elizabeth Speed of Novomatic UK, Dean Harding of Harry Levy Amusements, Jonathan Lauder of UDC and Jeremy Godden of the Godden Gaming Organization.
Former presidents Nick Harding, Greg Wood and James Miller will be retained as council members.

What we’re watching

Murky: The FT follows the money on gambling operator sponsorship of Premier League shirts.

“Our Premier League is being used as the billboard. It’s got to stop,” says Labour MP Carolyn Harris.

Calendar

Sep 19-21: SBC Summit Barcelona
Oct 10-12: G2E Las Vegas
Oct 16: Gaming in Germany, Berlin
Oct 26: Reputation Matters, London

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