So, what do the election results mean for gaming investors and the industry?
First, of course, there is Donald Trump and national policy.
Trump is not a social conservative. It would seem unlikely that he will carry the anti-gaming torch. However, Congress remains in control of the Republican Party, which no longer will have Barack Obama as a brake on its large reservoir of social conservatives.
There will be natural speculation about the influence of Trump supporter Sheldon Adelson and whether Trump would support, or at least not oppose, his attempt to turn back the online gambling clock.
However, online gaming is growing in the United States, not in new jurisdictions out-and-out legalizing Internet casinos, but in state lotteries creeping online, and daily fantasy sports becoming increasingly legal. That creates constituencies to oppose anti-online gaming legislation. And those include states with big congressional delegations like New Jersey and Michigan.
Finally, it is worth noting that not everything happens in the halls of Congress. That was demonstrated in the Obama administration when one of the biggest actions allowing gaming expansion was the Department of Justice reversing decades of policy and deciding that the 1961 Wire Act only banned sports betting over telephone lines, thus, today, the Internet.
Gaming Expansion Takes A Hit
There were no referendums to expand gaming on a major scale, but voters in Massachusetts and New Jersey rejected limited expansion.
• Massachusetts. The defeat of the referendum to allow a second slots-only casino means there will not be added competition to Wynn Boston Harbor and Penn National’s Plainridge slots casino.
Perhaps more important, it should chill any other efforts to expand gaming in the Bay State.
• New Jersey. The overwhelming defeat of the effort to put casinos in North Jersey should protect Atlantic City’s casino monopoly for the foreseeable future.
That, obviously, is good news for the city’s largest casino operator, Caesars, and for Borgata owner MGM Resorts.
It also should encourage Las Vegas Sands to expand Sands Bethlehem in Pennsylvania and continue to mine New York City for gamblers, as the North Jersey defeat removes the motivation for New York to defend its gaming industry by expediting development of casinos around the Big Apple.
North Jersey legislatures will try to get half a loaf by authorizing VLTs at Meadowlands and Monmouth racetracks, but with 78 percent of voters rejecting full casinos, there might not be much support for, in effect, thumbing noses at voters by allowing slots outside of AC.
• Coloradans didn’t vote on gaming, per se, but they might have locked in the casino industry’s status quo by making it more difficult to amend the state constitution.
The good news for incumbent casino operators is they are less likely to face new competition in the future. The bad news is it will become more difficult to raise or eliminate the bet limit.
However, for public operators Ameristar, Monarch, Century, Full House and Isle-of-Capri-soon-to-be-Eldorado, the status quo isn’t bad in under-tapped markets.
Jamie Odell, Out Like A Champ
One of the hardest things for any successful person to do is to finish at the top.
Aristocrat CEO Jamie Odell is going to do just that.
Odell will be leaving Aristocrat in February, ending a tenure in which he transformed a stagnant company into perhaps the most robust of all gaming suppliers.
He gave Aristocrat focus, moved key executives and much game design to its biggest market, North America, and emphasized making good games.
The success is illustrated in the most recent Eilers-Fantini Quarterly Slot Survey. Aristocrat, once the third or fourth slot company in North America, finished the second quarter as having the leading portfolio of premium leased games and achieving 23 percent ship share of purchased games, 4 percentage points over its trailing 12-month average.
Further evidence of Odell’s leadership and ability to change thinking at Aristocrat is that new CEO Trevor Croker will relocate to the U.S.
A CEO, of course, is ultimately judged by company’s stock price.
When Odell became CEO in February of 2009, Aristocrat stock was under $4 on the Australian Stock Exchange. Today it is around $15. That is nearly a quadruple.
Nice work, Jamie.
