MGM Resorts CEO Jim Murren, who also happens to be the Chairman of the American Gaming Association (AGA), made several interesting comments about the future of gaming during a press briefing in Washington DC on Wednesday.
During his remarks Murren touched on three hot-button issues in the gaming industry:
- Online gambling
- Daily Fantasy Sports (DFS)
- Casino expansion outside of Atlantic City
Murren on potential online gambling ban
The comment that will certainly grab the most headlines was Murren’s assertion, reported by Las Vegas Review-Journal’s Steve Tetreault, that an online gambling ban would not be ruinous to MGM.
Murren went on to say that online gaming is “convenience gambling,” adding that MGM is in the “resort-based” gaming business.
This statement will likely be unsettling to regulated online gaming advocates, who may take Murren’s remark to mean the company will not fully support regulation or will not oppose Sheldon Adelson’s proposed online gambling ban, the Restoration of America’s Wire Act (RAWA).
But that’s only one interpretation of Murren’s online gambling comments.
Another way to parse Murren’s words is online gaming is only a small piece of the company’s revenue stream at the moment, therefore the passage of RAWA wouldn’t have much of an impact on MGM’s bottom line.
While true, this thinking could also be seen as shortsighted, considering only 3% of the U.S. population has access to legal online gambling at this point.
MGM sending mixed signals on iGaming
At first glance it appears MGM is heavily invested in online gaming legalization in the U.S.:
- MGM is already involved in the online gaming space through Borgata in Atlantic City, the highest revenue producer in New Jersey.
- MGM has also applied for and received an online poker license in Nevada, but never launched an online poker site in its home state.
- Additionally, the company is one of the driving forces (along with Caesars Entertainment) behind the pro-regulation lobbying group, the Coalition for Consumer Online Protection (C4COP), as well as the Let NY Play online gaming legalization campaign in New York.
However, a close look at the company’s actions and statements over the past two years indicates MGM is not as invested as it appears to be.
When you examine Murren’s current assertions on iGaming and his previous statements regarding the AGA’s withdrawal from the online gaming fight following the formation of a rift between its members, it appears the company is hedging its iGaming bets.
In March of 2014 Murren told the Las Vegas Review-Journal:
“I don’t want the AGA to find itself mired in a tremendous amount of controversy and infighting. I feel like the Internet has become too divisive a topic when there are so many other topics we want to put forward where we can all agree.”
Two months later the AGA withdrew its support of regulating online gaming, with AGA President Geoff Freeman echoing Murren’s comments from March:
“One of the things I’ve learned in this industry is we are extraordinarily competent at shooting at one another. The snipers in this industry are of the highest quality, and if you let that be the focus, we’ll kill each other.”
Murren reiterated the AGA’s position on the matter in comments yesterday reported by Politico:
“The AGA has stepped back from this topic,” Murren said. “It was becoming very divisive within our organization. There are very passionate and polarized points of view on this topic and for better or worse I, as chairman, decided that this was not a battle that we want to tear the AGA apart over.”
Murren on DFS
Another topic touched on by Murren was DFS, both in terms of the company’s potential plans for entering the DFS space as well as the questionable non-gambling classification of DFS.
During his remarks, Murren said the AGA is studying the DFS industry and trying to determine the best way for its members to get involved in the DFS industry. Murren stated they were also examining the potential legal can of worms DFS could open down the road.
On this latter point Murren was unambiguous.
“Clearly this cannot be ignored, and it is gambling,” Murren stated.
Murren’s point of view is that anyone who thinks DFS isn’t gambling is “absolutely, utterly wrong.”
“I don’t know how to run a football team, but I do know how to run a casino, and this is gambling,” he said.
According to Murren, because of conversations with regulators, MGM has decided to put its plans for DFS on hold for the time being.
This is an indication that the AGA and MGM feel DFS regulations are coming down the pipeline, something that would almost certainly upset the DFS apple cart.
Murren on Atlantic City monopoly
Murren also touched on Atlantic City’s recent troubles (MGM owns half of the Borgata), but expressed optimism for the city moving forward. “The worst, I think, is behind Atlantic City,” Murren said.
Murren went onto say that expansion outside of Atlantic City, in North Jersey, would help AC, and the MGM would be interested in developing in a North Jersey casino.
“The market opportunity up north is vast,” the executive, Murren said, “If that were to pass, MGM would be interested in pursuing it.”
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