MGM Resorts International Eyes PASPA Case Victory As A Huge Win For The Company’s Casinos Nationwide
This story here might seem like a huge “no duh,” but it is worth mentioning anyway because it shows just how badly the casino industry wants sports betting to become legalized throughout the US.
MGM Resorts International, one of the very biggest players in the worldwide casino gambling industry, is certainly among the number of major gaming operators that is keenly eyeing the outcome of New Jersey’s sports betting case currently before the US Supreme Court. MGM CEO Jim Murren said as much in a recent interview with local media in the Garden State following the end of the company’s first quarter earnings teleconference, calling a win against the Professional and Amateur Sports Protection Act of 1992 (PASPA) a major victory for the state, Atlantic City’s flagging casino industry and MGM especially.
“We intend to be the biggest beneficiary of commercial sports betting if the Supreme Court should overturn PASPA as early as June,” Murren said in the post meeting briefing with reporters. “We’ll talk to that in great detail at [MGM Resort International’s] investor day.”
What’s more, Murren told his company’s investors during the meeting that, in his opinion, they should pay heed to what happens on the Supreme Court’s docket as we move toward the close of the justices’ 2018 term. Murren said investors and the stakeholders in the company should place “great emphasis” on the possible opportunities generated by a decision from the highest court in the land against PASPA, which has – up to now – limited the expansion of legalized gambling to Nevada, Oregon, Delaware and Montana. Furthermore, Murren intoned the belief that PASPA’s days were numbered, and MGM Resorts International, which has been constructing working relationships with regulators for decades and has plenty of experience offering sports betting at its Sin City casinos, is ideally suited to clean up should sports betting become legal pretty much everywhere in the country overnight.
To wit, MGM already offers the aforementioned Las Vegas property –the Strip’s biggest, that being the world famous MGM Grand Las Vegas, America’s biggest hotel – as well as mobile sports betting app (which for now only works in Nevada) and other properties in other states, all of which are looking to legalize wagering on sports. MGM owns the Beau Rivage in Biloxi and the Gold Strike in Tunica, Mississippi, the MGM Grand Detroit in Michigan, the MGM National Harbor in Maryland and the Grand Victoria in Illinois, while the MGM Springfield in Massachusetts is expected to be opening its doors for the first time later in the year.
Of all the above states, Mississippi is actually the furthest along in terms of getting up to speed with a sports betting offering in the near term following the long hoped for repeal of PASPA or the law’s being stricken from the legal rolls by the Supreme Court if the justices find it to be unconstitutional. In fact, some prominent lawmakers in the Magnolia State have gone on the record across various media outlets claiming that Mississippi casinos could be ready to offer sports betting to guests within less than two months following the death of PASPA.
The much-maligned federal law, which has now largely been rendered toothless in the wake of widely accessible legal offshore sports betting websites based in Europe and the Caribbean, was originally passed in such a way that New Jersey and other states basically had a year to pass sports betting laws of their own before PASPA went into effect. Suffice it to say, the Garden State – for whatever crazy reason – royally dropped the ball on that one and Atlantic City, long the second place finisher to Las Vegas in terms of America’s gambling centers, has been losing out to ever since.
Though the Thursday, April 26 investors call did have some positive aspects regarding the future for MGM Resorts International, particularly – as we have been discussing – in light of a pro-sports betting decision by the SCOTUS justices sometime within the next few months, there were some sobering details as well. It should not come as a surprise to those keeping a close eye on the gambling industry that MGM, for all its prominence in the marketplace, is struggling somewhat in Las Vegas and the company’s stocks have taken a dip of late as well.
However, Murren seemed hopeful about what is to come for the company, especially in the realm of new ventures related to the professional sports industry. MGM recently partnered with the Anschutz Entertainment Group – the largest owner of sports teams and events in the world and the second largest presenter of liver music events – to undertake the construction of the T-Mobile Arena and is additionally a major sponsor of the Vegas Golden Knights, the National Hockey League’s (NHL) newest expansion team. Other big moves taken by MGM of late were the purchase of San Antonio’s WNBA team (and its move to Las Vegas as well – renaming the franchise as the Las Vegas Aces).
MGM Resort International’s doubling down on sports is no surprise, as its other major Las Vegas resort and casino, Mandalay Bay, is strategically located as the closest hotel to the newly constructed football stadium awaiting the 2018-2019 debut of the Raiders franchise, which is moving from Oakland, California. There’s no doubt that the Mandalay Bay, due to its proximity, would be the ideal place to stay and play a few hands of cards of take a few pulls on a slot machine while pre-gaming for the Raiders’ NFL debut or enjoying a nightcap after they make their introductory foray on the turf in Sin City.
For what it is worth, Murren’s overwhelmingly optimistic attitude about the upcoming year points speaks volumes about just how much the American casino industry is pinning its hopes on sports betting being made legal by virtue of a Supreme Court decision against PASPA. However, it is worth pointing out that the Supreme Court is not guaranteed to make a ruling that works in favor of nationwide sports betting expansion: the SCOTUS decision could be a narrow one that only permits New Jersey, which passed a law in 2014 to regulate Atlantic City’s casino sportsbooks, to offer a full sports betting menu. If that turned out to be true, we look for the casino industry leaders – and Murren would probably be in that group – to hit up Congress with everything they’ve got.
If the American casino industry does not get what it is looking for from the Supreme Court vis a vis a PASPA repeal then a fully Congressional repeal of the law is the only way forward. If even that alternative plan fails to pan out, then the bulk of American sports bettors and other gamblers will in all likelihood continue to flock to the legal overseas alternative in the form of so called “gray market” betting sites as they have for years.
The hope is that organizations like MGM Resorts International will petition state governments to enact sports betting legalization legislation that does not overburden them with onerous renewal fees on top of taxes – and don’t even get us started on the absurd “integrity fees” the pro sports leagues are asking for. Fortunately, it looks like that unpopular “blueprint” point from the leagues has been a non-starter with the various statehouses looking to legalize sports betting and the representatives of the gaming operators alike.
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