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Nicole Abbott

Nicole Abbott

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12th September
A minor problem?
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Amaya hires William Hill’s Robin Chhabra
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ASA bans Bear Group ad for objectifying women
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Media Relations Director of Ladbrokes steps down
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Q1 sees LeoVegas returning to profit
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Ladbrokes Coral announces Q1 results
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Failure of Florida bill quashes hopes for the legalisation of DFS
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MGM Resorts partners with GVC to launch playMGM brand
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Paradise Park approved by Wynn Resorts
28th April
STS completes acquisition of Greep Ltd.
27th April
Andy Duncan steps down as Camelot UK's CEO
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UK Government scraps free play tax in Finance Bill ahead of the general election
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US casinos experience 2% revenue decrease in February
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Merger talks end between Margaritaville Casino and Alabama Indian tribe
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Melco and Hard Rock set to open casino in Cyprus
21st April
Casino cheating laws: Is clarity being lost?
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Federal appeals court overturns ruling blocking gambling facility in Massachusetts
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Scientific Games completes acquisition of Spicerack Media
12th April
888 Holdings may consider moving to Malta after Brexit
11th April
2017 Grand National was officially the busiest day of the year for NYX
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US Department of Justice establish repayment plan for victims of Absolute Poker’s “Black Friday” fraud
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Sky Betting & Gaming prepares to enter German market
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Californian casino under investigation for money-laundering
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Nevada's table games and slots takings down 4.48% in February
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39 arrested in Malaysia following gambling crackdown
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Galaxy teams up with SBM to bid on Japanese casino licence
28th March
Habanero revels in revenue growth ahead of European expansion
27th March
New Hampshire considers bill allowing construction of two casinos
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Kindred consider using AI to prevent problem gambling
24th March
Consortium propose casino and shopping complex in Malta
22nd March
Florida’s bill to freeze casino expansion passes through House committee
21st March
Adelson tops Forbes' rich list again
20th March
MGM Grand introduce skill-based interactive golf suite
17th March
West Virginia introduces first online gambling bill
17th March
Pennsylvania table games revenue drops 3% during February
17th March
Two casinos rejected by Mississippi Gaming Commission
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‘Political risks’ expected to delay Cebu casino
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Gambling Commission urges parents to be wary of video game gambling
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Connecticut’s Public Safety Committee approves two casino expansion bills
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Lottoland hopes to be the first private lottery operator in Germany
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Norway threatens to crackdown on skin betting
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Bwin confirmed as title sponsor of Grand Slam of Darts 2017
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Tabcorp switch regulatory supervisor of Tatts Group merger
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Sky Racing World Expands Partnership with TVG
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GVC extends agreement with Leap Gaming
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Illinois Senate approves plan for six new casinos

IN-DEPTH 3 December 2019
Will Nevada be the US' greenest state?

Oliver Lovat assesses how marijuana legalisation could impact Las Vegas casinos.

Nevada has always taken societal stands that have been outside the social norms across the US. Back in the 1930s, 'quickie' divorces were established, allowing a no-fault divorce for those that spent six weeks as residents of the state. Many divorcees stayed.

In 1931, Nevada legalised gambling with the famous Assembly Bill 98, which was to define the state forevermore, despite the tiny population at that time. This was to prove pivotal, as federal forces and moral forces cracked down on illegal gambling across the US; Nevada was a bold outlier and built the state’s economy on gaming and tourism.

Today, the hot issue is marijuana. Nevada wasn’t the first. Nebraska decriminalised use in 1978, but it wasn’t until 2014 when recreational use was legalised in several west coast states and Nevada followed suit. On 1 January 2017, all aspects of marijuana production, supply and possession became legal. However, it is not as simple as light up, sit back and chill out, as there are rules in place on use and consumption, which is where the problems currently sit.

Marijuana in Nevada

While this article is not advocating for the legalising of marijuana, the economic benefits have been pronounced. RCG Economics has reported the economic benefits of marijuana amount to more than $1bn per annum. Nearly 10,000 jobs have been created and nearly $150m is taken in annual tax receipts as a result of legalisation.

However, the benefits have not been merely economic. With the industry moving from the shadows to the light, there has been an alleviation of pressure on the criminal justice system containing and prosecuting non-violent crime, thus allowing police to address more serious issues.

For the customer, dispensaries offer a range of product, regulated with guidelines on strength and effect to user. Clark County Commissioner Tick Segerblom, one of the architects of the policy, said recently at the Economic Club of Las Vegas event there had been no discernible downsides to the legalisation.

As in gaming legislation, regulation and oversight, Nevada has adopted best practice. All aspects of the industry have been segregated and licensed. There are separate guidelines for cultivation, testing, manufacturing, distribution and retailing, which has allowed specialisation in each of the various aspects.

Companies in Canada, a country which has legalised marijuana on a federal basis, have invested in and even acquired nascent Nevada cannabis businesses at huge levels. They understand the scope of the business, not just in terms of recreational or even medical use, but even speculating hemp could be one of the solutions to the future of sustainable bio-energy.

The conflict

Despite the fact 11 western US states have legalised recreational marijuana, it is still illegal federally, which causes real problems. Not only is it illegal for banks to process marijuana proceeds, it causes problems for other regulated business, in particular casinos and hotels.

While tourists can legally buy marijuanafrom any number of dispensaries, they may only consume their purchases in their own homes. By consuming elsewhere, they are committing a misdemeanour. A walk down the Strip, Fremont Street, and indeed any casino parking garage would suggest the current legislation is misaligned, as there are clearly plenty of misdemeanours taking place around the clock; many by tourists.

You have a situation where authorities could enforce the law, and therefore destroy marijuana tourism, anger many visitors, hotels and spend decades immerged in paperwork, or they let it go. They are letting it go. The conflict therefore sees the casinos and federal law enforcement on one side, and more or less, everyone else on the other, trying to find a happy balance.

For now, the Strip is excluded from the new guidelines and the state recently put an embargo on discussing marijuana use. However, the City of Las Vegas, which includes Downtown, will be the exception and will shortly see 'social use lounges' for marijuana; if the Strip doesn’t want to embrace the green dollar, Downtown certainly does.

In these lounges, the customer cannot buy weed or alcohol, but will be located to current dispensaries, so picking up a supply will not be an inconvenience. A total of 12 are already licensed, and 10 more are due to follow. Las Vegas could be the recreational marijuana Mecca.

The marijuana metaphor

The decision of the state to embrace marijuana is not just one of direct economic benefit, although the reasons to do so are evident. The main rationale is one of economic diversification, alongside industrial technology innovation and manufacturing, weaning Nevada’s economic reliance away from gaming and resort-based tourism.

There is a valuable lesson here on a micro-level for casino operators globally. Statewide, gaming was 54% of hotel department revenue in 1999, falling to 48% in 2009, and stood at 42% in 2018. The resorts have also sought different ways to diversify their revenue streams.

When we manage our casinos, the imperative moving forward is to realise that although gaming revenue is core to the business, an over-reliance on pure gaming is not sustainable. Competitors are emerging to challenge, whether through amenities such as spas, shows and entertainment, food and beverage, hotels, or something else completely. The next generation of properties being programmed in Japan will be acutely aware of this, with multiple revenue streams required for sustainable success.

Nevada’s leadership is aware of this and has taken steps to look to the future. What is the rest of the gaming industry doing?

Oliver Lovat leads the Denstone Group, which offers strategic advice and consultancy on customer-facing, asset-backed investment and development, with a focus on casino resorts. He is a Fellow of the Royal Institution of Chartered Surveyors and visiting faculty at Cass Business School in London. He lives in Las Vegas.