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World Series of Poker (WSOP) has announced dates for its 54th annual tournament, May 30 to July 18, 2023.
Websites
World Series of Poker: (upcoming tournaments)
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Casino bosses, directors brace for another tough year
From punitive pokie taxes to new regulatory actions and the high cost of reform, casinos are not the lucrative businesses (or easy directorships) they once were.
As 2022 drew to a close, staff (and shareholders) of Star Entertainment were probably breathing a sigh of relief that their annus horribilis, with its damning regulatory inquiries, cancelled casino licences and more than a dozen senior departures, was nearly over.
But Australian Securities and Investments Commission chairman Joe Longo and NSW Treasurer Matt Kean still had two Christmas surprises in store.
First, on the evening of December 12, Longo lodged a landmark Federal Court civil action alleging that 11 Star directors and executives had failed to exercise due care and diligence when making a slew of decisions related to anti-money laundering measures and high roller junkets at the casino.
Five days later, Kean announced a new pokie tax that will cost Star and rival Crown Resorts about $120 million annually. It triggered a near-instant 18 per cent drop in the former’s share price, feeding into a 44 per cent drop for the year.
It sets the scene for a 2023 that could be as grim for the casino industry as the three scandal-ridden years preceding it, with questions over the appeal of governance roles, given directors’ responsibilities will become more onerous, the viability of casinos’ reform agendas, and just how profitable they can be.
From a governance perspective, gambling company boards, along with the rest of Australia’s director class, are facing an uncertain future. ASIC clearly has higher standards of them now.
The upshot will be more work, increased accountability and higher expectations with what they do with their 10 days of board meetings a year.
“The signal [from ASIC] is pretty clear – if you want to be on the board of a large gambling concern, then you need to be around all the regulatory concerns of the industry, which are many and varied,” Monash University gambling regulation expert Dr Charles Livingstone says.
“You can’t just sit there and have lunch once a month and rake in the big dollars any more – you need to be more curious now and make sure you show that you’re doing that. You can’t just say ‘well they [management] didn’t tell us’, you have to make them tell you.”
This means proactively ensuring the casinos’ anti-money laundering and counter-terrorism financing policies are up to scratch, he says, and that board members are updated on this monthly. It includes ensuring companies investigate and report potentially problematic sources of patrons’ funds.
On the responsible gambling front, he says directors need to demand updates on what hours people are gambling and what actions casinos take against any potential problem gamblers.
While this would take a lot more work from directors and staff, it is not impossible, Livingstone says.
“It’s not unenforceable, but it becomes a much less profitable business if you do it properly, and that’s the issue.”
It was previously “very easy to cut corners at every level” from problem gamblers on pokies to high rollers bringing in bags of cash, he says, and cutting out these customers would lead to “really significant losses”.
The cost of developing and maintaining compliance measures is also steep. Crown reportedly spent about $150 million on outsourcing such work to lawyers and consultants in 2021-22, and Star predicted its remediation costs this financial year will range from $35 million to $45 million. Crown has also been hit with hundreds of millions of dollars in fines, and Star is facing similar penalties.
“But that just means you’re going to be looking at a business that’s getting more like normal levels of profit and return, whereas before they were recording these extraordinary returns on their investment. It will be more like a retail business than a licence to print money,” Livingstone says.
It also means the director class, famous for juggling several board gigs at once, and the generous payments that come with them, may consider giving up their other governance roles if they want to preside over casinos.
Star chairman Ben Heap, one of the directors sued by ASIC, currently holds two other directorships, for example. New director Anne Ward is also chairwoman of two other listed outfits, director David Foster is on the boards of four companies in addition to Star, and incoming director Toni Thornton holds four other directorships.
“But now you’ve got to be so on the ball that you probably wouldn’t be on many other directorships,” Livingstone says.
“There’s a lot more work in [casino director roles] now, and a lot more responsibility than they’ve accepted in the past because the potential for this to get on the wrong side of the law is massive.”
Morningstar analyst Angus Hewitt says it will be up to directors to decide on their workload, but they will need to be able to answer the question: Do I have a good understanding of what’s happening at this company?
“And if not, then, you know, there’s a problem,” he says.
The ASIC action means all directors, not just those at Star, will have to ask themselves this question.
“Will that require more meetings or will that require directors with fewer directorships? I don’t know. Presumably, that’s up to those people to decide. There’s a certain amount of work to be done in this job. And it is a job. And how many other directorships can you hold to be able to do that appropriately?” Hewitt says.
“I think with what’s been happening with ASIC they’ll all be having those thoughts.”
A spokesman for Star said the company’s directors were “highly experienced and appropriately skilled”. He said they were committed to restoring Star’s suitability to hold casino licences through a “comprehensive remediation plan … for enhancing our governance, culture and controls”.
Listed v unlisted
Of course, Star could go down the path that Crown did and turn to private equity, which would give Star’s directors a hefty payday and exempt them from the stringent listing rules and governance principles set by the Australian Securities Exchange.
But Star is not like Crown Resorts, which was bought out by US private equity firm Blackstone for $8.9 billion this year.
The first major difference is Crown had a private equity target on its back because the company knew major shareholder James Packer had to sell down his shareholding to show governments and regulators it was serious about change.
Second, Star’s assets are attractive but not valued as highly as Crown’s.
But Hewitt says Star, which is likely to keep its casino licences in NSW and Queensland, is still very cheap for what it is: effectively a money printing machine.
“As long as it has those licences, Star’s properties are cash-generating machines. This all provides an interesting opportunity for an investor – whether that investor is mum buying a handful of shares or whether it’s a PE firm buying the whole thing.”
A rocky year ahead
Whether listed or not, however, Australia’s casinos are in for another wild ride in 2023.
The NSW gambling regulator extended the reign of Nick Weeks, the special manager appointed to Star’s flagship casino in Sydney, until 2024 from an initial 90 days. Queensland authorities have also installed a manager to oversee Star’s Brisbane and Gold coast operations, reporting to Weeks.
Gambling regulators already have imposed more than $100 million in fines on Crown in Victoria and $200 million on Star in NSW and Queensland. That’s in addition to potentially hundreds of millions of dollars in fines for money laundering that AUSTRAC is seeking in separate Federal Court cases against both Crown and Star.
There’s the ASIC case against the Star directors, as well as continuing class actions from investors burned by the two companies’ tumbling share prices during media coverage of their misconduct.
The NSW tax reforms will also be costly. Star CEO Robbie Cooke has pushed back on the taxes, saying Star is “not sure how the government modelled its financials nor the basis for suggesting the Star does not pay its fair share of taxes”, and requesting urgent meetings with the government.
But as The Australian Financial Review’s Chanticleer column noted, Star has lost its social licence and should not expect much sympathy from politicians or voters.
The upshot of this is it’s going to be a tough year for those overseeing Australia’s biggest casinos.
Says Livingstone: “It doesn’t sound like a job I’d want, it sounds like a nightmare.”
(AFR)
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5 Keys To Online Success
It is being more commonly understood that the dot.com bust of 2000 was more the result of bad business models and execution than of some intrinsic fault within the Internet. Many businesses with models appropriate to the Internet are alive and thriving.
Perhaps you’re wondering if your own business has what it takes to be successful on the Web? While every situation is different, experts have noted that successful online businesses possess a number of common characteristics. Let’s take a look at five key characteristics that they share.
1. Management possessed a “Net” awareness.
Dun and Bradstreet’s 20th Annual Small business Survey reports that two-thirds of today’s small businesses have Internet access, and approximately 50 percent of those also have a Website. And more than 60 percent of those with Internet access plan to increase their use of the Internet in coming months.
As business owners and decision-makers, you will most certainly benefit by spending time online learning about the Internet. Look at how your competitors and industry are using it, try to discern where your markets potentially hang out, and ask lots of questions.
2. They had an organized plan.
Do you remember the story Alice in Wonderland and the Cheshire cat? One day Alice came to a fork in the road. Looking around, she saw a Cheshire cat in a tree. “Which road should I take?” she asked. “Where do you want to go?” the cat replied. “I don’t know,” Alice answered. “In that case,” the cat said, “it doesn’t matter which road you take.”
Once you have gotten familiar with the Internet and its potential for your marketing, create a written plan of action. Simply putting your ideas down on paper will help focus your thoughts. Set goals and identify how you can get there.
How important is it to have a plan, or better yet, a written business plan? The Small Business Administration says that most successful companies started with a detailed business plan and those that didn’t plan were far more likely to fail.
3. Successful ventures implemented their creative ideas and then learned from what worked and what didn’t.
Kraft Foods is the largest branded food and beverage company in North America, and the second largest worldwide. Paula Sneed, one of their vice presidents, was a keynote speaker at an Economist Conference. She boiled down the basis for their success down to three simple “ingredients” which I believe are also important to all businesses, no matter what size.
Make smart bets. Kraft identified initiatives that build brand, increase customer loyalty, or cut costs.
Move fast. Once identified, they implemented their initiatives. I think one of the most notable things Sneed said was, “If we’re going to fail let’s fail fast and fail cheap.”
Make course corrections. Kraft expected both success and failure. They made mid-course corrections based on early feedback to improve the likelihood of success. Even failures provided good market feedback they could use for future initiatives.
4. Successful Web ventures did targeted marketing.
As a marketing consultant I find that many small businesses have great difficulty identifying their choice markets. I can’t tell you how many times I ask entrepreneurs what their target markets are, only to be told, “everyone.”
But targeting your marketing to “everyone” doesn’t make sense. Targeting means identifying those potential customers who represent the best prospects for sales and focusing your marketing efforts on them. This is simply the old 80/20 rule (that 80% of your sales come from 20% of your customers) in practice.
In fact, finding a niche and working to serve its unmet needs is one of the best uses for the Web. Why? Because the Web isn’t really a mass marketing tool, as some would believe. It’s actually a supreme targeted marketing tool.
5. They combined online and offline marketing.
I always hear people making either/or kinds of comments about offline versus online advertising. But successful companies recognized that online and offline advertising are synergistic. They support and amplify one another.
Here are two simple examples. First, including your website URL in all your offline advertising messages (yellow pages, magazine ads, circulars etc) will bring traffic to your website. Second, a signup form on your website that you use to send prospects your standard marketing printed materials (brochures, sales materials etc).
While these five Keys do not guarantee online success, including them in your business will certainly improve your chances for success.
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Google: Year In Search, Trends and More - 2022; Data, Illustrations, Graphs and more
Caesars the Latest to be Awarded Mass Sports Betting License
State regulators in Massachusetts approved Caesars to operate a sports betting website in the commonwealth. They become the third casino company granted a license after Wynn and MGM.
The Massachusetts Gaming Commission voted unanimously to allow Caesars following a grueling review of MGM Springfield's tie-in with a third party vendor that runs its mobile site BetMGM. Commissioners delayed a decision on the sports betting license application from Plainridge Park Casino due to concerns over ties with Barstool Sports and its controversial founder, Dave Portnoy.
BetMGM was approved for a license one day prior to acknowledging a breach of customer accounts occurring some time in May of this year. BetMGM parent company, Entain, had been handed down a record fine by UK regulators for failure to implement money laundering safeguards over the summer.
Caesars already has a foothold in a number of U.S. states including Louisiana. We had an opportunity this past week to visit their sprawling sportsbook in Harrah's New Orleans.
Caesars Louisiana sportsbooks are making a name for themselves for their willingness to accept huge million dollar bets from Houston area furniture mogul Jim "Mattress Mack" McIngvale.
