Monthly Archives: February 2015

Churchill Downs profit falls as Big Fish acquisition costs mount

Racing, casino and social gaming operator Churchill Downs Inc. saw profit fall 16% in 2014 as acquisition-related interest costs spiked.

CDI enjoyed record revenue of $812.9m in 2014, up 4% over the previous year, while earnings were up 15% to $202.5m. But profit fell to $46.2m as interest payments more than tripled, in part due to CDI’s $885m acquisition of social gaming operator Big Fish Games late in the year.

For the three months ending Dec. 31, revenue from CDI’s casino operations was flat at $78.7m while earnings rose 21% to $22.7m. The gains were partly attributable to a full quarter’s contributions from the Miami Valley Gaming joint venture in Ohio, which launched last December. Business was up 7% at the Oxford Casino in Maine but single-digit declines at CDI’s other casino properties erased these gains.

CDI’s online advance deposit wagering site Twinspires.com reported essentially flat revenue of $40.9m while earnings fell 5% to $10.1m, which CDI blamed on new online pari-mutuel taxes in New York. Twinspires’ betting stakes rose 4%, outperforming the nationwide thoroughbred racing handle, which fell 4%. VSI aka Velocity Wagering Services, the company’s Isle of Man-based high-roller online business, saw revenue nudge up 1% to $8.6m.

CDI’s core racing operations fell 21% to $30.4m thanks to the cessation in July of pari-mutuel operations at Florida’s Calder Race Course. However, that event also cut costs, which helped narrow racing’s earnings loss by 33% to $5.4m.

Big Fish Games contributed $13.9m in revenue and $3.8m in earnings during the brief period following the acquisition. For the fourth quarter as a whole, including the pre-acquisition period, Big Fish bookings were up 33% year-on-year to $95.4m. Of this sum, $46.9m came via Casino, $32.3m via Premium Paid games and $16.2m from Free-to-Play Casual games.

Big Fish’s Casino category was up 94% year-on-year, driven by a 77% increase in average paying users and a 9% gain in average bookings per paying user. The Premium category was down 23% year-on-year as customers shifted from paid PC games to mobile free-play. Free-to-Play was up 200% thanks to the launches of Gummy Drop! on iOS in Q3 and on Android in Q4.

Jose Montes Wins the Heartland Poker Tour Main Event in Black Hawk

Jose Montes takes down the Heartland Poker Tour Main Event at the Golden Gates Casino & Poker Parlor, in Black Hawk, after defeating Joe Serock, in heads-up action, to take home the first prize of $240,523.

Not many people have started 2015 like Jose Montes.

The man from the Bronx has picked up his second major title, in the first two months of the year, after picking up the victory in the Heartland Poker Tour (HPT) Main Event at the Golden Gates Casino & Poker Parlor in Black Hawk.

In January, Montes topped a field of 1,363 players to win the first major title of his career, after beating Benjamin Keeline, in heads-up action, to take the $352,669 first prize in the World Series of Poker Circuit (WSOPC) Main Event in Choctaw.

That’s a fine year right there.

[Image Credit: PokerNews]

Montes wasn’t done.

Confessions of a Poker Writer: The Four C’s

Lee Davy continues his confessions series with a little ditty about reaching forty, the changes that are happening in his life, and the importance of the four c’s.

I’m changing.

I can feel it.

It started when I quit alcohol. That was five years ago. Drunkenness changed to sobriety-sobriety changed to holistic health. In those five years everything has changed.

I fell out of love, I got divorced, I left my home, I moved back in with my parents, I lost the intimacy of fatherhood, I quit my job, I created a new job out of thin air, I fell in love again, I remarried, I found the intimacy of fatherhood again, I moved out of my parents, I created a new home, I started traveling, I stopped gambling, I got out of debt, I started investing, I became a vegetarian, I became a vegan, I started a daily yoga practice, I started a daily meditation practice, I started a daily running practice, I stopped watching pornography, I started a daily journaling practice, I started a daily gratitude practice, I started reading one book per week, I wrote my first book and I started to donate money to charity.

That’s a lot of change.

But that’s nothing compared to the feelings I have in my mind, body and soul as I turn 40. I’m not sure if it’s wisdom, but I feel this pull towards those less fortunate than me. I feel a pull towards the earth. Like the salmon and the birds. I feel like I am being pulled along by a force that is unknown to me.

Pennsylvania gets new online gambling bill, committee hearing

Pennsylvania has a new online gambling bill courtesy of Rep. John Payne (pictured, on the left), who chairs the House of Representatives Gaming Oversight Committee.

The full text of Payne’s HB 649 has yet to be published, but a memorandum posted to the House website said the bill would restrict internet gaming to the state’s current gaming licensees. License fees would go for $5m apiece while online gaming revenue would be taxed at a rate of 14%. The bill’s use of the phrase “internet gaming” rather than “internet poker” suggests the bill would adopt a New Jersey-style menu of gaming options.

In a statement announcing HB 649, Payne said he hoped internet gaming revenue would help at least partially close the state’s projected $2b budget shortfall. Payne referenced a 2014 study that identified online gambling as the largest potential new revenue source for the state’s gaming industry. Payne believes the market could generate $120m in revenue in its first year, about $3m shy of what New Jersey’s market earned in its first year.

Payne told Philly.com that Pennsylvania didn’t want to be “the last ones coming to the game.” Payne said it would be a mistake “to sit here and wait until Ohio has it, Maryland has it, New York has it … We’ve got to be up and running and be able to compete with the surrounding states.”

Payne’s committee has scheduled an April 16 hearing on the issue of online gambling. Previous hearings have featured staunch opposition from Las Vegas Sands, which operates Sands Bethlehem, one of the state’s top brick-and-mortar casino operations. One can only hope that Sands ‘VP of No’ Andy Abboud (pictured right), whose stock tactic is to pull out his cell phone and call it a casino, varies his routine slightly this time around by showing up dressed as an iPhone 6. (Would make a hell of an entrance.)

Even assuming Payne’s bill doesn’t go down to defeat like previous attempts, there’s the question of whether new Gov. Tom Wolf would sign it. Wolf, who was sworn in as governor in January, stated on the campaign trail that he was against any expansion of the state’s casino industry, whether online or off. On the plus side, he’s a Democrat, so he’s not beholden to Sheldon Adelson, who was caught improperly funneling money to Wolf’s opponent Tom Corbett.

News of Payne’s bill was warmly received by Harrah’s Philadelphia GM Ron Baumann, who believes online gambling “could certainly enhance overall revenues.” Bob Green, chairman of the state’s market-leading Parx Casino, was similarly receptive, although he cautioned that “the first priority must be to protect the bricks-and-mortar casino industry.”

The Early Word: Flaking out on weather and how to make sense of labels

Well, sort of. That nasty winter storm system that has brought North Texas to its frosty knees will bring a chance of snow flurries to the northern parts of the Hill Country, but the white stuff – if it even makes it to the ground – will melt before it has a chance to accumulate, the National Weather Service says.

Deutsche Telekom’s online betting plans under fire from German betting operators

Germany’s lottery and betting association has asked the federal government to put the kibosh on Deutsche Telekom’s new online betting site.

On Monday, telecom giant Deutsche Telekom (DT) announced it had acquired a 64% stake in Deutsche Sportwetten (DSW), which operates Austrian-licensed online sports betting operator Tipp3. While DSW was one of the 20 lucky recipients of Germany’s federal sports betting licenses, those licenses haven’t been formally issued due to ongoing legal challenges. In the meantime, DT says it will begin targeting German punters using Tipp3’s Austrian license by the end of the current quarter.

Not so fast, say Deutsche Lotto and Totoblock (DLTB), an association of Germany’s lottery and pool betting operators, who say DT is attempting a “vile trick” to circumvent German regulations. The aggrieved operators say DT’s plan is “on par with providers of tax havens” in terms of illegality and DT’s Austrian license justification is “absurd and cannot be accepted.”

What really gets under DLTB’s skin is the fact that the German government owns a 14.3% stake in DT while the state development bank holds a 17.4% stake. DLTB believes this should be sufficient leverage for the government to compel DT to back off its plan and wait in the queue with everybody else.

DLTB says DT is far from the only company that “longs” for a resolution of the lengthy and convoluted German licensing process. But if DLTB has to “adhere to law and order,” it believes DT ought to be subject to the same restrictions.

DLTB also said it has written to the country’s Bundesliga football league to protest the “massive expansion of sponsorship activities of private gambling providers.” DLTB says the Bundesliga is providing “a platform for clearly illegal offers” from internationally licensed operators, including live betting and casino games, neither of which are permitted under the German federal state treaty on gambling.

Committee proposes New Mexico-tribe gambling compact

The new gambling compact proposed by Gov. Susana Martinez’s administration and five New Mexico tribes—pueblos of Jemez and Acoma, the Navajos, Jicarilla Apache and the Mescalero—is presented to state’s legislators on Tuesday.

The revamped state-tribal agreement, if approved, would allow up to four new Indian casinos in the next 23 years and casinos can offer credit as well as free lodging and food to some high rollers and operate 24/7.

Some members expressed support for the agreement but others raised some questions especially about the state being saturated with casinos, given that New Mexico already has 23 casinos, and possibly hurting the horse-racing industry.

“At what point do we reach market saturation?” asked Rep. Larry Larrañaga, R-Albuquerque, after probing on Hernandez on the number of new tribal casinos that might be built as a result of the proposed compact.

Martinez’s Deputy Chief of Staff and lead negotiator Jessica Hernandez also highlighted that the compact would provide stability to gambling market in New Mexico and revenue to the state would increase in exchange to exclusivity rights for the tribe.

“It’s a very carefully negotiated agreement that balances a lot of different interests,” Hernandez said.

New Mexico received nearly $16 million gambling revenue in Q4 2014 from American-Indian tribes that operates in the state.

SJM Holdings 2014 profit falls 13% as mass market gains fail to offset VIP decline

Macau casino operator SJM Holdings saw profit fall nearly 13% in 2014 as mass market gains failed to offset serious VIP gaming declines.

SJM, Macau’s largest casino operator, reported full-year gaming revenue down 8.8% to HKD 79.3b (US $10.2b). SJM’s annual earnings fell 10.5% to HKD 7.76b while profit slipped 12.7% to HKD 6.73b. SJM blamed the declines on Macau’s ongoing struggles, and while the company says it has no idea how long the “conditions which inhibited gaming revenue growth” in 2014 will continue, it remains bullish about SJM’s future.

SJM’s mass market revenue rose 8.9% but the VIP sector fell 17.3%. The VIP segment’s share of SJM’s overall gaming revenue fell to 60.9% from 67% in 2013, while the mass market rose from 31.3% to 37.4%. SJM’s share of Macau’s overall VIP revenue fell from 25.2% in 2013 to 23.4% last year. SJM’s average number of VIP gaming tables fell 7.9% in 2014 while mass market tables rose 3.4%.

Revenue from slots and other electronic gaming machines fell 4% to HKD 1.34b. The average daily net win per machine rose 11.2% but the average number of slots in operation fell 13.7%. SJM features slots at 11 of the 20 casinos that operate under its license.

Non-gaming revenue fell 22.4% to HKD 971m despite a 4% rise in average room rates. Occupancy at SJM’s flagship property Casino Grand Lisboa fell 3.2 points to 93.2%.

The Casino Grand Lisboa’s individual revenue numbers mirrored the whole, with overall revenue down 8.3% to HKD 29.6b. VIP revenue fell 14.2% as turnover fell 5.7%, while mass table revenue gained 16% and slots rose 7.5%. The average number of VIP tables fell 8.7% while mass tables increased by 12.4%. The property saw visitors fall 6.1% to 13.6m.

Despite the tumble, SJM says it managed to maintain its position as Macau’s market leader, controlling 23.2% of the special administrative region’s casino business. However, that’s down from 24.8% in 2013 and from 26.7% in 2012.

Daniel Negreanu Wants to Ban Players from the WSOP

Daniel Negreanu’s rants are infamous in the poker community thanks to his candid stance on a range of issues and in his latest textual tirade he put the WSOP in his crosshairs. In a piece published on CardPlayer, Negreanu decided to call out some of poker’s more controversial players. Entitled: “A List of Players Who […]

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Portuguese Gaming Laws Delay Could Benefit Online Poker

Online Portuguese gaming laws have been in a state of flux for over seven months, but in the end that might be a good thing for Internet poker. Legalized in June of 2014, the iGaming casino bill hasn’t received an expedited approval many lawmakers expected from the country’s Council of Ministers. While frustrating to both […]

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