Inside Gaming: Miami Casino Bill Killed, Super Bowl Win for Sports Books, and More
This week, it's all about stays of execution in the gaming world. Las Vegas, Atlantic City, and casinos around the country are smiling to themselves about the postponement of a Florida legislature vote on a bill that would legalize full casino gambling in Florida. Genting, a leading contender for a license if Miami gets a casino, has said it plans to go after Vegas visitors. Nevada sports books also have reason to celebrate because the Giants Super Bowl win wasn't the disaster many had predicted. Instead, the state's sports books turned a $5 million profit on the game. And the Fertitta brothers, once facing bankruptcy and the end of their casino dreams, are planning to resume majority ownership of Station Casinos by buying JPMorgan's stake in the company for $73 million.
Florida Legislature Delays Discussion of Expanded Gaming, Postponing Miami Complex
Vegas gets a reprieve as plans to develop a casino mega-complex in Miami, Florida, hit the skids in the state legislature last week. Genting Bhd., an Asian gaming giant, recently making its presence felt in the U.S., had been pushing for the legalization of full casino gambling, but the House Business and Consumer Affairs Subcommittee in the Florida House of Representatives postponed a vote on the bill and is not expected to return to the issue until 2013.
Genting has said it expects to take $1 to $2 billion in annual revenue from Las Vegas. Las Vegas Sands Corp. has also been campaigning to expand Florida gaming and will go head-to-head with Genting for the Miami license if legalization occurs. Sands was against a change to the bill that gave licensing power to a state department of gaming control instead of an independent commission. Wynn Resorts Ltd., Caesars Entertainment Corp., and MGM Resorts International have also shown interest in the South Florida market.
Committee chairman Doug Holder called the bill incomplete, and Rep. Erik Fresen, one of the bill's authors, asked the committee to postpone the vote. The issue has divided Florida interest groups, with some excited about the possibility of huge tax payments and others, including Walt Disney Co. and the Florida Chamber of Commerce, adamantly opposed. The Seminole Tribe, which operates five casinos in Florida, and race track owners also lobbied against the gaming expansion. Supporters of expanded casino gaming are hoping that postponing the bill until after an election year will make it easier to secure votes.
Genting wanted to build a $3.8 billion casino-resort and purchased 30 acres, including the site of the former Miami Herald building, for which it paid $236 million, and the Omni Center hotel, which it bought for $206 million.
Genting, which has been lobbying around the clock to change the law and then win the bid for a Miami license, made $629,529 in political contributions to Florida lawmakers in the last seven months of 2011. More than half went to the state Republican Party. After the committee's decision, Genting stressed that the issue was not dead and would be revisited as soon as possible.
Underdog Super Bowl Victory a $5 Million Win for Nevada Sports Books
The New York Giants weren't the only surprise winners of Sunday's Super Bowl XLVI. Nevada sports books came out on top, as well, despite last week's fears that a Giants win would cost them millions. The Giants started the National Football League championship game as three-point underdogs and defeated the New England Patriots 21-17.
Nevada's 184 sports books recorded $93.9 million in wagers and profited more than $5 million for a win percentage of 5.4 percent. Last week, as Inside Gaming reported, sports books were concerned that a Giants win would be very expensive because the Giants had been as much as 100-1 underdogs to win the Super Bowl on bets taken two and three months ago. Although the take would have been higher if the Patriots had won by more than three, sports books were still able to turn a profit since the bulk of the wagers made over the weekend favored the Patriots, as did several six- and seven-figure bets. Cantor Gaming, which runs sports books for several Las Vegas casinos, reported accepting one wager of $1 million and two of $500,000.
"The late rush was on the Patriots, which bailed us out," said Jimmy Vaccaro, director of sports operations at Lucky's Race & Sports Book. "It wasn't as bad as it was three days [before the game]. The Patriot money did show."
The win percentage of 5.4 percent beat last year's cumulative win percentage on all sporting events of 4.86 percent. It was a far better game for sports books than last year's Super Bowl when books made $700,000 on a handle of $87.5 million. Sunday's game brought in the second largest one-game handle in history. The record handle of $94.5 million was wagered on the Super Bowl in 2006, when the Pittsburg Steelers defeated the Seattle Seahawks. Sports books made the most money in 2007, when the Indianapolis Colts' victory of the Chicago Bears netted books $12.9 million. The only recent sports book loss on the Super Bowl was in 2008 when the Patriots fell to the Giants despite being favored by a spread of more than 10 points.
Post-Bankruptcy, Fertittas to Regain Majority Ownership of Station Casinos
Station Casinos LLC minority stakeholders Frank Feritta III and Lorenzo Fertitta announced this week that they plan to invest another $73 million in the company to buy out another shareholder. The purchase brings the brothers' combined interests to 60 percent, enough to give the family majority ownership. They will buy out JPMorgan Chase Bank N.A., which acquired a 15 percent equity stake in Station last year as part of bankruptcy proceedings.
"Frank and Lorenzo Fertitta's new investment into Station Casinos LLC demonstrates their continued commitment to the company as well as their belief in the Las Vegas locals market," said Station spokesperson Lori Nelson.
With the additional investment, the brothers will have put a total of $273 million into the company since Station filed for bankruptcy in 2009 after the locals' casino market was slammed by the economic and housing crises. At the time, Station had more than $6 billion in debt. At the end of 2011, debt was around $2.5 million.
Station was emerging from bankruptcy in 2010 when four of the largest Station properties were foreclosed on by Deutsche Bank and JPMorgan Chase. As part of the deal, Station maintained an equity stake and in the properties and continued to manage them. The Fertittas bought Green Valley Ranch for $500 million in a separate deal. They also own the incredibly profitable Ultimate Fighting Championship.
On Monday, Station disclosed its 2011 financials, which show a tiny improvement over 2010. Net revenue in 2011 came in at $1.178 billion compared to $1.114 billion in 2010. Earnings before interest, taxes, depreciation, and amortization (EBITDA) was $284 million, $4 million more than in 2010.
In other Fertitta news, last week the family's online gaming company, Fertitta Interactive LLC, applied to the Nevada Gaming Control Board to be licensed as both an Internet poker site operator and online gaming service provider. "We support the regulation of online poker," said Lorenzo Fertitta in the company's press release. "Our industry leading software has a track record of complying with the strictest regulations in jurisdictions around the world."
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*Photo courtesy of Bloomberg