MGM’s CEO Sounds Off On ‘Perplexing’ New Wire Act Opinion

MGM Resorts International Chairman and CEO Jim Murren weighs in on the Wire Act: “It’s just we think an absurdly, poorly written and unenforceable opinion.”

The Department of Justice’s new interpretation of the Wire Act does not have too many fans.

Count Jim Murren, chairman and CEO of MGM Resorts International, among them. He addressed the controversial topic during the company’s earnings call on Wednesday.

Murren doesn’t sugarcoat things either.

“This latest missive from the DOJ, perplexing is an understatement.

And if read as words, it would mean that Powerball as it exists in 44 states in the United States isn’t legal anymore. It’s just we think an absurdly, poorly written and unenforceable opinion. I don’t think anyone in the industry, the gaming industry or the sports betting industry, feels any differently [in the wake of the opinion].” 

MGM is all in with NJ online gambling, sports betting

If strictly enforced, the opinion could have far-reaching effects on all sections of legal online gambling in the US. The uncertainty, therefore, is real for MGM.

The MGM-owned Borgata in Atlantic City is fully invested in the NJ mobile online sports betting and online gambling industries.

The PlayMGM Sports app was one of the first to join the NJ sports betting market on Aug. 22.

Borgata also has four NJ online gambling brands under its license.

Murren isn’t alone in his thinking

Last week, New Jersey Attorney General Gurbir S. Grewal issued a press release stating that the new opinion is “wrong” and “deeply troubling.” Joining him in the “strong opposition” was Josh ShapiroPennsylvania’s attorney general.

The joint letter follows a string of opposition to the opinion from all corners of the US gambling market. The lottery, as well as individual states like Massachusetts, have decried the recent opinion.

For its part, NJ and PA asked that the administration either withdraw the new opinion or “guarantee that DOJ will not bring enforcement actions against companies in our states that are acting lawfully under state statutes.”

The two-plus page letter addressed to Acting Attorney General Matthew Whitaker and Deputy Attorney General Rod Rosenstein includes a number of pressing issues. Among them is in regards to interstate transmission of information that is “merely incidental,” according to the letter.

“The opinion casts doubt not only on traditional online gaming, but also multi-state lottery drawings (such as Power Ball and Mega Millions) and online sales of in-state lottery tickets. While regulators and the industry are reviewing the full range of impacts this opinion may have, each potential implication is of concern.”

As such, Murren’s comment follows a similar path.

NJ online gambling is in the billions

The previous Wire Act opinion helped clear the path to launch NJ online gambling in 2013.

The industry has generated more than $1 billion in its five-plus years of existence.

The New Jersey Division of Gaming Enforcement released the latest figures on Wednesday, and the monthly figures shattered the $30 million mark setting a new all-time record in the process.

NJ sports betting continues to set records, too.

January’s reported handle came in at $385 million. But the majority of that number came from NJ online sports betting — $304,973,986 to be exact.

David Rebuck, director of the DGE, believes the current regulatory model is fine the way it is.

“New Jersey has regulated online gaming for five years and has developed the most successful regulatory model in the world. The State is fully committed to maintaining and ensuring the highest regulatory standards for New Jersey’s evolving online gaming industry, including the most recent addition of sports wagering.”

In other words, with so much at stake, MGM may not be the only gambling company to question the OLC opinion.

MGM Loads The Bases, Becomes ‘Official Gaming Partner’ Of MLB

MGM Resorts strikes a deal with the MLB to become its official gaming partner. MGM now has deals in place with three of the four major US sports leagues.

Three of the four major professional sports leagues in the US have now partnered with MGM Resorts International.

Major League Baseball on Tuesday announced “the formation of an all-inclusive partnership agreement” with MGM, according to a press release.

The agreement “combines the MLB brand with MGM Resorts and playMGM brands across league and team sponsorships,” per the release. Also included are data usage in gaming, promotion across MLB-owned media platforms and “domestic and international activations at MLB events.”

As such, this multiyear agreement makes MGM the “Official Gaming Partner of MLB” and “Official Entertainment Partner of MLB.”

What’s included in the MGM-MLB deal

In joining MLB’s corner, MGM now has an avenue to promote its brand and gaming options throughout the league’s digital and broadcast platforms.

Included are MLB NetworkMLB.com, the MLB At Bat app and any additional “fan engagement offerings” that would be “jointly developed” by the MLB and MGM.

The partnership also makes MGM an “MLB-Authorized Gaming Operator” while using the league’s official statistics feeds on its digital and live sports betting options. Such usage, the MLB specifically noted, would be on a nonexclusive basis.

That said, according to the release, the MLB will make “enhanced statistics” available to MGM on an exclusive basis.

The agreement also sets up the league and MGM to collaborate on comprehensive responsible gaming measures while working to “protect the integrity of the game both on and off the field.”

Additionally, MGM has authority to use MLB intellectual property in advertising and promotions. To boot, this little nugget:

“MGM also will broaden its commitment to baseball by securing multiple MLB Club partnerships.”

What they’re saying

MLB Commissioner Rob Manfred expressed his pleasure to join forces with MGM, which he dubbed as “a clear industry leader in the sports gaming area.”

With this partnership, he said, the league and MGM will be able to work together to bring “innovative experiences” to fans and MGM customers.

Manfred added:

“Our partnership with MGM will help us navigate this evolving space responsibly, and we look forward to the fan engagement opportunities ahead.”

Jim Murren, MGM chairman and CEO, noted that the two new partners will create a “one-of-a-kind fan experience.”

“Combining MGM Resorts’ world class entertainment and technology with MLB data will continue to transform a rapidly changing industry. This partnership further amplifies the significance of our GVC JV, firmly establishing MGM Resorts and playMGM as the market leader in partnerships with major professional sports leagues.”

The news was noted by many in the industry, including the American Gaming AssociationSara Slane, senior vice president of public affairs for the AGA, commented:

“Agreements between sports leagues and the gaming industry enable all sports stakeholders to work together to eliminate the illegal sports betting market. With MLB’s announcement today, three major sports leagues now have official sports betting partners – evidence of our continued commitment to protecting the integrity of both consumers and sporting competitions and that contracts remain preferential to statutes in all sports betting deals.”

MGM adds to its partnership portfolio

A day after hinting at a partnership, noting a “major sports gaming announcement” coming, the MLB did what many speculated: MGM will partner with the MLB.

Murren noted the “historic” deal. Within the last few months, though, MGM has landed similar partnerships.

In July, a month before rolling out its playMGM mobile product for sports betting in New Jersey, MGM entered into a partnership agreement with the NBA.

Then, in October, the company did the same with the NHL.

With three of the four biggest professional sports leagues in North America secured, a new question arises:

When does the NFL enter the fold?

Reports Say MGM Might Be Eyeing Caesars With A Possible Merger

MGM might be lawyering up to merge with Caesars. Plenty of issues could derail a merger of the two gambling giants, including other interested companies.

Caesars has had a troubling few years.

Much of the company has spent time in bankruptcy protection, and now CEO Mark Frissora is leaving the company.

That makes Caesars look vulnerable, and just maybe that creates an opportunity for MGM.

The New York Post reports that according to sources, “MGM has hired investment bank Morgan Stanley and law firm Weil, Gotshal & Manges” to analyze the idea of a merger.

Those sources also say that some of Caesars’ biggest hedge fund investors are backing the idea.

MGM and Caesars own a third of the New Jersey casinos

Any merger would create a very powerful presence in the US gaming industry. Caesars is worth about $22 billion with MGM at around $30 billion.

In New Jersey, Caesars owns three of the nine licensed casinos: Harrah’s, Bally’s, and Caesars. MGM now owns 100 percent of the Borgata after buying out Boyd Gaming.

Put them together and they would own one-third of the Atlantic City casino market.

In Nevada, the situation is similar, but the numbers are bigger. Between the two companies, they own most of the Las Vegas Strip — more than 30 properties in total, excluding golf courses.

Concentrating that much of the industry into the hands of one company will make regulators sit up and take notice.

Local monopoly, national influence, international presence

Market concentration is a concern at the state level, but federal regulators are unlikely to see a bigger issue.

Both companies operate across the US, but not across all states. In fact, MGM’s recent partnership with Boyd Gaming only gives it direct access to 15 states worth of real money gambling.

As sports betting spreads, MGM with its partners GVC and Boyd plans to expand everywhere it legally can.

Caesars has expressed the same strategic intent with its partner Scientific Games.

But that expansion is in the face of tough competition.

Expansion in sports betting

Paddy Power Betfair, now the owner of FanDuel, the Meadowlands NJ sports betting provider, is following a similar go-everywhere strategy.

CEO Peter Jackson told investors when presenting Q3 results that FanDuel is already active in 41 states. And they aim to be competitive in all states where legal sports betting is allowed.

In fact, all the big European gaming operators have taken a position on US sports betting expansion.

Internationally, the presence of Caesars and MGM is actually rather thin. Caesars operates in Canada, South Africa, Egypt, and the UK. MGM has gambling businesses in six Chinese locations including Macau.

There’s an easy argument that merging Caesars and MGM would create a more internationally competitive group.

Sell off Nevada casinos? Maybe

If regulators did kick up a stink, it’s unlikely that it would be in New Jersey.

Four out of nine casinos would not create the kind of monopoly pricing power that would worry the New Jersey Division of Gaming Enforcement (DGE).

As for online gambling, there are more than 25 licensed NJ gambling sites, sports betting and poker sites. And many of them have partnerships with foreign brands.

The Nevada Gaming Control Board (NGCB) may have more serious concerns. But at worst it would require no more than a combined group divest itself of some Strip properties.

At that point, there’s a math problem. What tradeoff would actually work for MGM and Caesars?

Both companies are heavily reliant on Nevada for their revenues. They may well be diversified elsewhere, but Las Vegas is still the jewel in their respective crowns.

Having to sell any properties in Nevada might actually be a deal breaker.

What about Wynn and Caesars? Or anyone else?

The New York Post also pitched Wynn Resorts, the Genting Group, and private equity firm the Blackstone Group as potential buyers.

Wynn would generate fewer concerns over market concentration in Nevada. The company is expanding in Las Vegas and building a new casino in Boston, but taking over management of Caesars’ large property portfolio might be biting off more than it can chew.

The Genting Group is a Malaysian gaming company with several Resorts World Casinos in the US. It would be no surprise if it decided to expand in the US through acquisition.

The company has a large global presence already with casinos in:

  • Malaysia
  • United Kingdom
  • Singapore
  • Hong Kong
  • Philippines
  • Korea
  • China

Blackstone is a different beast entirely. It is one of the world’s largest private equity investors and a natural replacement for one of the existing hedge fund owners of Caesars.

But would it be interested in Caesars with its current strategy? Maybe not.

Rivalry in New Jersey and beyond

While speculation is fun, Caesars is not an easy takeover target. No matter how much its private owners might want to sell, finding the right partner will not be easy.

Barely a week ago, Caesars rejected a proposal to merge with Golden Nugget. Caesars is still carrying a lot of debt, so any partner needs to be flush with cash.

New Jersey players can expect the rivalry between Caesars and the Borgata in Atlantic City to continue, at least for the time being.

ICYMI: New Jersey Online Gambling And Sports Betting Had A Crazy Busy Week

Sports betting, pro sports teams, and legendary brands all made headlines this week in the expanding NJ sports betting and online gambling markets.

When it rains, it pours.

And that’s very true of last week in the world of sports betting and online gambling.

A flurry of news surfaced relating to New Jersey casinos, NJ online gambling, NJ sports betting operators as well as professional sports teams including the New York Jets, New Jersey Devils, and Philadelphia 76ers.

So before more partnerships and gambling news erupt onto the scene (like this one between the NHL and FanDuel this morning), here’s a quick rundown of some of the big NJ news bits.

Sports, casinos and a bunch of gambling partnerships

Perhaps the biggest news of the past week was the dual announcements from NJ casino companies about sports betting partnerships with professional sports teams.

MGM Resorts International struck a partnership with the Jets, in which they would be the official gaming partner of the storied franchise.

In a press release from the gaming giant, CEO Jim Murren expressed his excitement about the groundbreaking deal:

“We could not be more excited to join with the New York Jets for a first-of-its-kind partnership in the NFL. We look forward to working with the Jets to innovate gaming, increase our customer base through cross marketing opportunities and provide NFL fans with a one-of-a-kind entertainment experience.”

MGM owns Atlantic City’s flagship casino, Borgata Hotel Casino & Spa, and will surely increase the visibility of their Jets partnership at the casino’s sportsbook.

Meanwhile, Caesars Entertainment announced it entered a deal with the NBA’s Philadelphia 76ers and the NHL’s New Jersey Devils.

In their press release about the partnership, Caesars’ Chief Marketing Officer Chris Holdren emphasized the launch of Caesars Club, a premium experience in the Prudential Center, the Devils’ home ice in Newark.

“Caesars Entertainment has enjoyed a long relationship with the New Jersey community,” Holdren said in the release. “With the introduction of the Caesars Club Sports Lounge, we’re excited to expand our relationship and deliver our world-class hospitality and entertainment in a new part of the Garden State.”

MGM, Golden Nugget make moves in PA online gaming

Next, we move to our neighbor Pennsylvania.

This past week, MGM and Golden Nugget were the only two out-of-state “qualified gaming entities” (QGE) to submit petitions for Pennsylvania online gambling licenses.

The state had 39 of these licenses to hand out to its 13 casinos and racetracks, with each casino able to secure licenses for online slots, online table games, and peer-to-peer online games such as online poker.

Casinos in the state swept up all but 11 of the licenses, allowing QGEs — gambling operators in other states, for example — to swoop in to buy the remaining licenses. Prices for the licenses were $4 million for a single license and $10 million for all three.

One of the interesting angles here is that Golden Nugget is the undisputed king of online gambling revenue in New Jersey. Their move into the PA online gambling market will no doubt strengthen their position atop the revenue in online casinos.

What remains to be seen is how much revenue they’ll be able to generate in PA, as no online casinos have gone live yet.

Churchill Downs has NJ sports betting, online casino plans

The third slice of big news in online gambling and sports betting comes from Churchill Downs Inc., aka CDI.

CDI, the company behind the fabled Churchill Downs horse track in Kentucky, revealed they had solidified a partnership with Golden Nugget AC and would be opening an NJ online casino and sportsbook later this year.

CEO and director William C. Carstanjen talked about the partnership in the company’s Nov. 3 earnings call, through which CDI will use Golden Nugget’s skin to run their online operation.

“In New Jersey, we have entered into what is known as a skins agreement with the Golden Nugget casino to gain access to the New Jersey iGaming and sports wagering markets,” Carstanjen said. “We do not have a casino in New Jersey to enter the market directly but have an arrangement with Golden Nugget, which will allow us full management and control of our own site.”

The company also noted they’re finalizing a sports-betting deal with Pennsylvania’s Presque Isle Downs.

New York Jets Strike Official Gaming Partnership With MGM

With NJ sports betting on fire, NY Jets partner with MGM, which will allow the Jets and MGM to cross-promote at MGM casinos such as Borgata and Jets games.

The NFL’s New York Jets have signed a partnership deal with MGM Resorts International. The deal will allow the Jets and MGM to cross-promote their products at MGM Resorts and Jets home games.

With the agreement, MGM is now the official gaming partner of the Jets. MGM will also sponsor the facility responsible for the Jets multimedia production and content, the Jets 360 Production Studio.

New York Jets season ticket holders and Jets Rewards members will have a host of perks available to them by virtue of the deal.

The majority of those perks will await them at MGM properties throughout the United States, particularly Borgata in Atlantic City. Borgata, of course, is home to one of the NJ sports betting sites (playMGM) and a retail sportsbook.

Obviously, management for both organizations was excited. MGM CEO Jim Murren had this to say in a press release:

“We could not be more excited to join with the New York Jets for a first-of-its-kind partnership in the NFL. We look forward to working with the Jets to innovate gaming, increase our customer base through cross marketing opportunities and provide NFL fans with a one-of-a-kind entertainment experience.”

Jets fans will now say ‘I Called It’ more often

One main portion of the deal is that Jets fans will now have access to an expanded version of the playMGM game known as I Called It.

I Called It is a mobile app that MGM calls a “play-along predictive game.”

Essentially, Jets fans compete with each other to see who can predict the outcome of the current drive on the field. Correct predictions result in points for each player, and the winner of a given game is determined using a leaderboard.

I Called It is available for both home and away Jets games. The top three places on the leaderboard each week win prizes.

Until the deal with MGM, those prizes were limited to team merchandise and related gift cards. However, Jets fans will now have the ability to compete for additional prizes.

Those prizes are likely to include gifts redeemable at MGM locations.

Busy week for both MGM and the Jets

The deal came during a week that has seen both organizations announcing more than one partnership deal. MGM, in particular, continues to add to a growing list of strategic partnerships.

This week, the casino giant became the first operator with a league-wide partnership with the NHL. Although individual teams have joined with other companies already, Monday’s announcement was the first to involve NHL Commissioner Gary Bettman.

As a result, MGM now has its fingerprint on three of the four major sports leagues, at least in some capacity. Only Major League Baseball still eludes a deal with the company. At this rate, it won’t be for long.

Meanwhile, the Jets announced this week that the team had gained a sponsorship from European gaming titan 888. 888 will place advertising at MetLife Stadium for its online casino going forward.

The Jets also have a partnership with FanDuel, although that partnership only pertains to daily fantasy sports. Incidentally, FanDuel’s first retail sportsbook operation lies across the parking lot from the Jets’ home stadium.

All these New York Jets sponsorships come courtesy of an NFL owners vote to allow gaming companies to join with NFL teams. However, the Jets will have to walk a very fine line, as the vote specifically prohibits advertising for sports betting.

MGM Leverages Borgata Presence To Enter The PA Online Gaming Market

The Pennsylvania Gaming Control Board (PGCB) confirmed receipt of MGM’s $12 million payment required to apply for a complete PA interactive gaming license. 

MGM Resorts International hopes its New Jersey online gaming presence will earn the company a spot in the Pennsylvania online gambling market.

According to Online Poker Report, the Pennsylvania Gaming Control Board (PGCB) confirmed receipt of MGM’s $12 million payment required to apply for a complete PA interactive gaming license.

The complete gaming license includes three parts:

  • Non-peer-to-peer simulating slot machines
  • Peer-to-peer simulating poker
  • Non-peer-to-peer simulating banked table games

Each license costs $4 million and can be bought individually or as a package. It seems MGM wants it all.

Opening the door to PA online gaming

The first round of license applications was exclusively open to the 13 PA casino license holders. There were 39 licenses available, 13 of each kind.

Casinos were not required to apply, and if they did apply, they did not have to apply for all of them.

When the application window closed, seven licenses remained. Three more were added to the mix when Rivers Casino relinquished the rights to its licenses.

That makes 10 licenses available to Qualified Gaming Entities (QGE). MGM, as the owner of nearby Borgata and other casinos across the country, meets the requirements of a QGE. And it has its sights on three of the 10 available licenses.

The application window for QGEs closes on Oct. 31. The PGCB will randomly award the remaining ten permits sometime in the near future. There is no indication as to the date of the drawing.

Additionally, there is no confirmation on how many QGEs applied. MGM has done what it can at this point.

Interestingly enough, it is a little ironic that a casino is waiting for the outcome of a draw to see if it hit the jackpot.

MGM leveraging its brand

MGM has been busy growing its online casino and sports betting footprint. Gaining access to the Pennsylvania market has been on MGM’s agenda for a while now.

More than likely, part of its motivation is that a sports betting license is only available to those with a casino license.

The gaming company also seems to be doubling-down on major sports league partnerships. Earlier this week, the company signed its second sponsorship agreement with a major sports league.

As a result, MGM is now the “official resort destination” of the NHL. This news came around the same time as the New Jersey Devils signed two sponsorship deals of its own.

With properties up and down the eastern seaboard, and a slice of NJ sports betting to boot, it makes sense that MGM wants into the Pennsylvania market.

One of the reasons could simply be to retain its customer base that currently makes the trek from PA to NJ to play some slots or place a sports bet.

A focus on sports betting in New Jersey and beyond

It’s no wonder there is a focus on sports betting. Let’s face it: It is the shiny new object in the online gaming space. Borgata has been a dominant presence among  Atlantic City casinos.

In September, the NJ sportsbook brought in a sports betting revenue total of $2.5 million. Not too shabby for a nascent NJ sports betting market.

Pennsylvania’s population is 25 percent larger than that of NJ. As such, it stands to reason that its online gaming and sportsbook earning potential will be higher.

It certainly explains MGM’s recent partnership agreement with Boyd Gaming, the previously mentioned sponsorships with two sports leagues, and the rumors about MGM being the ideal suitor if Stadium Casino is indeed for sale.

Of course, the most direct way into the PA gaming market is with those interactive gaming licenses. At this point, it is a wait and see for the casino giant.