Monday, September 28, 2009

NBA Owner Seeks to Build Casino

Sports leagues generally oppose gambling. UNLESS...they get a piece of the action.

The Cleveland Plain Dealer reports that the majority owner of the Cleveland Cavaliers would be in the catbird seat with regard to casinos in major Ohio metro areas if Issue 3 passes in November.

The article states that the proposed casino in Cleveland would cost approximately $600 million, so not a small investment. As a comparison, estimated the value of the Cleveland Cavaliers NBA franchise at approximately $477 million. The Cavaliers are listed as the 5th most valuable franchise, after the Knicks, Lakers, Bulls and Pistons.

So when you see sports leagues wring their hands regarding the evils of gambling, can you be certain that the angst has more to with their inability to get their hands on that gambling money rather than the gambling itself?

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Wednesday, September 23, 2009

Delaware Lottery Shows Montana Lottery "How It's Done"

Although Delaware is limited to NFL parlays as its sports betting option, they launched their offering for week 1 of the NFL season. The handle wagered wasn't as high as hoped but still a promising number - $257,870. The story from is here. They have a ways to go to reach the desired level of better than $1.2 million per week in handle. At current rates, the state will net only approximately $600,000 for the current NFL season. Delaware has recently appealed the recent decision of a panel of the 3rd Circuit and requested the entire 3rd Circuit hear the case. That story can be found here.

Let's compare this sports betting game offered by the Delaware Lottery to what the Montana Lottery is doing with their game, Montana Sports Action. Currently Montana Sports Action has games for racing and football. Where the Delaware game generated over $250,000 in handle, the Montana game generated a pathetic $6,500. How sad. What is sadder is that the geniuses in Montana have been running games for over a year and this is just the first week for Delaware.

If you think that this paltry sum is just a bad week for Montana, think again. This is probably one of their BETTER weeks. You see, when the Legislature was debating the law to allow to allow pari-mutuel fantasy sports wagering, they were estimating that the games would generate about $11.9 million in handle per year, or about $230,000 per week. That's similar to what Delaware did in its first week. Unfortunately, since inception, Montana's sports betting game, Montana Sports Action, has only generated around $190,000 in handle. Talk about lame. Delaware did in its first weekend what Montana hasn't done in over a year. The Legislature's Audit Division just completed an examination of this game, which is posted here.

The people in rural areas often get viewed as "rubes," fairly or unfairly. Using Montana Sports Action as a measure compared to Delaware, the term may have merit, particularly with regard to the Montana Board of Horse Racing, the Montana Lottery, and perhaps even the Governor's office.

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Monday, September 14, 2009

Tribal Gaming Important Economic Engine

The gaming industry definitely has an impact on the US economy. This post will focus particular attention on the impact of tribal gaming. Gaming is generally on a for-profit basis with exceptions for certain charitable organizations, e.g. church bingo. One could claim that the church is definitely a for-profit enterprise, but I'll leave that argument aside.

Tribal gaming proceeds are applied to improving the general welfare of the tribes. Typical areas of focus are law enforcement, health care, education, water and housing. Specific guidelines are outlined in federal law, the Indian Gaming Regulatory Act.

According to the National Indian Gaming Association 2008 economic impact report, tribes:
  • generated almost $26 billion in gross gaming revenue
  • generated over $3 billion in related hospitality revenue (lodging, F&B, etc.)
which in addition to helping the economic and quality of life of the tribes:
  • $150 million to local charities
  • $100 million to local governments
  • $2.5 billion to state governments
  • $8 billion to the federal government
Oh, and not to be underestimated, tribal gaming directly and indirectly support 636,000 jobs nationwide. To put in perspective, that number of jobs is comparable to the total employment of the US Postal Service.

Some states are particularly impacted by Indian Gaming. A recent editor's letter in Casino Journal magazine reported that the two major tribal casinos in Connecticut, Foxwoods and Mohegan Sun are responsible for 12% of the entire state's job growth since 1992! Also, just these two Indian gaming properties are contributing 60% of what the state of Connecticut receives in corporate tax revenue. Would you think that just two tribal casinos would have that large of an economic impact to a state? Huge impact.

In addition to providing revenues to charities, local, state and federal governments, tribal gaming provides revenues to help tribes help themselves develop after centuries of oppression and neglect. A true win-win.

References: (2009). The Economics of Indian Gaming. Retrieved September 14, 2009, from:

Rutherford, J. (2009, September), A sharing problem, Casino Journal, 4.

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