Internet poker in California remains “very much a long shot this year” but a deal in 2015, a nonelection year, looks “quite possible.”
That’s the assessment shared with GamingToday by some of the interested parties attending last week’s informational hearing in Sacramento before the California Assembly’s Committee on Governmental Re-Organization.
A California deal will go a long way toward encouraging the U.S. banking industry to stop brushing aside Internet gaming as a business that does not interest them because of the current market’s small size and those pesky federal banking rules.
California has some 38 million people or more than three times the population of New Jersey, Nevada and Delaware combined, the only three states where Internet action is now legal.
U.S. Attorney General Eric Holder has already given banks an informal green light of sorts to service the financial needs of regulated marijuana businesses despite weed’s continued presence on the federal list of prohibited drugs.
“I believe banks will respond to the needs of a market and legalized Internet poker in California will get their attention in a way that the current legal market does not,” according to one of the hearing attendees who shared his thoughts on the condition he not be identified since there is nothing more than speculation at this point.
A California version of Internet poker within its boundaries is also seen as likely to spur action in other states with significant populations, states where there are already signs of interest.
As momentum for legalization builds in California there also seems to be a feeling it should happen before Congress wakes up and passes some kind of national regulatory act that might limit what any one state can do.
Stormy report: Gaming companies had difficulty sweeping aside the impact of Mother Nature and fragile regional economies as they staggered through the worst of the winter months and got down to the business of reporting first quarter results.
Bad winter weather had a clear impact on the business of Penn National and, perhaps, Boyd, Caesars and MGM as well. Yes, record cold and snowfalls were enough to keep customers at home and discourage discretionary spending in a number of regional U.S. markets.
Only Penn had reported its first quarter numbers as of the end of last week. Others will be releasing numbers and associated color commentary this week and next, but the Penn experience offered evidence of the challenges faced by other companies at dozens of U.S. properties.
“We saw very difficult weather conditions during the first six or seven weeks of the year,” Penn CEO Tim Wilmott said. Penn COO Jay Snowden said weather conditions were “unprecedented” in areas such as Toledo, Ohio, where “record snowfalls” forced the closure of the company’s land-based casino there for 75 hours between January and March.”
And in the middle of it all there was a consumer market that Snowden continues to see as “challenged” and “fragile.” Caesars, Penn and Boyd collectively own or operate more than three-dozen casinos and racinos across Middle America from the Gulf Coast areas of Mississippi and Louisiana north into Illinois, Ohio and Pennsylvania. MGM has resorts in Detroit and Biloxi as it pursues a casino deal in Massachusetts and its recertification as 50 percent owner of the Borgata in Atlantic City.
Wilmott said the company had 25 percent more weather impacted delays during the first quarter compared to the first three months a year ago. As for the impact of a weak economy, Wilmott said Penn’s market research suggests there is a “new norm” taking shape with respect to discretionary spending.
Households with incomes under $75,000 a year, he said, “are still hurting and making conscious decisions” to limit the time and money they spend in casinos.
Penn continues searching for a second Las Vegas property – it owns the M – but has always said it would like a second Las Vegas address closer to the center Strip area. The big issue has generally been price.
California Internet poker looks possible in 2015
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