It took Nevada lawmakers less than four hours in 2013 to rush an Internet poker bill through both houses. Gov. Brian Sandoval signed the legislation that afternoon, and the state beat New Jersey to the finish line to become the first state with legal online poker. Two months later, UltimatePoker.com went online and became the first regulated online poker site in the U.S.
The venture failed after 19 months and more than a decade later, Nevada has just one online poker site. New Jersey is one of the nation’s leading online gaming operators disproving the Ricky Bobby theory of being first.
With online poker now in eight states, Caesars Entertainment believes merging its player pools in three of the markets — including Nevada — timed with the start of the World Series of Poker, will boost the business.
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Caesars Entertainment expects the 2024 World Series of Poker (WSOP), which kicked off its eight-week run Tuesday at the Horseshoe Las Vegas and Paris Las Vegas, will smash last year’s records for prize money — $403 million — and entries with 214,641 entered players.
The company is also expecting the changes it announced Friday for its WSOP online platform will produce a financial windfall for players and the company. Caesars is merging online poker player pools from three states — Nevada, New Jersey and Michigan — marking the first time an operator has created a multistate real money online platform.
Caesars, which acquired the World Series of Poker brand in 2004, is adding a $10,000 buy-in online championship event in July and 30 other online-only events in conjunction with the 55th edition of the World Series of Poker. Online players can also win seats to some of the live events held on the Strip.
Whether changes in WSOP Online are enough to grow the interest in legal internet poker — offered in eight states — is up for debate.
In a statement, Caesars Vice President of Online Poker Danielle Barille said merging players in three states allows the company to offer larger prize pools. “This platform upgrade is long overdue,” she added.
Combining player pools is a good idea, agreed analyst Chris Krafcik, who follows online gaming and sports betting for Southern California advisory firm Eilers & Krejcik Gaming. But he doubts it will “alter the trajectory” of the company’s digital business.
“To put things in perspective, U.S. online poker gaming revenue was just $92 million in 2023, well less than 1 percent of [the] total U.S. online gambling revenue,” Krafcik said.
According to the American Gaming Association, overall online casino revenue — slots, table games and poker — grew 23 percent in 2023 to $6.2 billion. In the first three months of 2024, online casinos reported revenue of $1.98 billion, up 26 percent and setting a new single-quarter record.
After launching in Rhode Island in March, legal online casinos operate in just seven states, falling far behind legal sports betting which has expanded to 38 states and Washington, D.C., in the last six years. Nevada, which only offers poker online, does not report its revenue because Caesars’ WSOP platform is the state’s only online gaming business and, under the state’s regulations, revenue from three companies is required before disclosures must be made.
Krafcik said divisive issues about the expansion of legal internet gaming into new states have pitted internet companies against traditional casino operators and labor unions over whether online casino revenue takes away from land-based casino revenue.
“In the status quo, we don’t see a path to much expansion over the next five years,” Krafcik said. “During that period, perhaps one [or] maybe two states get online casino legislation over the finish line.”
Nevada launched online poker in 2013, and by 2014, had three sites offering the activity, including the Caesars-operated WSOP.com. However, the state’s small population and a requirement that players register in person doomed two of the three operators.
The Gaming Control Board reported the three companies combined for monthly revenue totals typically far below $1 million. The largest month came in June 2014, a combined $1.04 million, which was due to players being in Las Vegas for the World Series of Poker.
Caesars offers its online casino site in four other states — Michigan, Pennsylvania, New Jersey and West Virginia — and in the Canadian province of Ontario.
According to the AGA, Michigan and New Jersey each generated $1.92 billion in online casino revenue in 2023 while Pennsylvania reported $1.74 billion in revenue — the three largest totals in the U.S. States only publicly report total online casino revenue.
Nevada’s casino industry has largely been opposed to any expansion of online gaming beyond poker because of fears it would cut into casino revenue. Any changes to the online poker law would have to come through the Legislature.
Caesars is expanding its online gaming presence in Michigan by acquiring Wynn Resorts’ internet casino and sports betting business, which has a partnership with the Sault Ste. Marie Tribe of Chippewa Indians. The deal is awaiting regulatory approval.
On Caesars’ first-quarter earnings call in April, company officials said its digital division, which includes online casinos and online sports betting, grew its revenue by 19 percent to $282 million during the three months. CEO Tom Reeg told analysts he expects the company’s online gaming to be producing $1.7 billion in annual revenue by 2025.
“Our iGaming is growing considerably faster than the market,” Reeg said on the conference call citing the company’s focus on growing the division’s revenue.
VICI may increase the rent on several Caesars properties
Speaking of Caesars Entertainment, the company could be paying more in rent by the end of this year.
Caesars — with 18 casinos and resorts nationwide — makes annual rent payments of $1.2 billion to real estate investment trust VICI Properties. VICI was born out of Caesars’ 2017 $18 billion bankruptcy reorganization in which the company took ownership of nearly 20 Caesars casinos, creating a lease-tenant relationship
The master lease covering Caesars’ original properties allows VICI to reset the rent at the eight-year mark, which begins Nov. 1.
Deutsche Bank gaming analyst Carlo Santarelli told investors in a research note last week any increase would be minimal to VICI’s bottom line and Caesars’ expenses.
“We estimate the incremental rent to VICI associated with the reset to be less than $5 million,” Santarelli wrote.
In seven years, VICI has grown into the gaming industry’s largest real estate company, owning 93 properties in 28 states and Alberta, Canada, which includes non-gaming businesses such as bowling center operator Bowlero and New York City’s Chelsea Piers retail and commercial center. VICI collects $3 billion in annual rent payments.
Santarelli believes VICI’s expansion may slow in 2024.
“Given our view of a limited [mergers and acquisitions] environment, and a challenging capital markets environment, we see few catalysts at present,” Santarelli wrote.
VICI’s total Strip real estate covers 660 acres, which includes 26 acres of undeveloped land adjacent to The LINQ to behind Planet Hollywood, and 7 acres in front of Caesars Palace.
Five of Caesars’ Nevada properties fall under the VICI lease — Caesars Palace and Harrah’s Las Vegas on the Strip, Harrah’s Laughlin and Harvey’s and Harrah’s in Lake Tahoe. MGM Resorts International is VICI’s second-largest tenant with 13 properties — including four in Las Vegas — paying almost $1.1 billion in rent annually.
What I’m reading
Texas House incumbents receive major fundraising boost from casino magnate — Jasper Scherer, Texas Tribune
Las Vegas Sands controlling shareholder Miriam Adelson wrote a $9 million check to the Texas Defense PAC and was its only funding source.
BetMGM becomes AP’s provider of sports-betting odds and lines — The Associated Press
BetMGM lands a prominent deal with the national newswire service.
As WNBA sorts out player pay, how will future Valkyries afford the Bay Area? — Ann Killion, San Francisco Chronicle
Following the influencer deal with the Las Vegas Convention and Visitors Authority, the Las Vegas Aces are becoming the league’s model franchise.
News, notes and quotes
A’s making improvements to temporary home in Sacramento
In an interview with Sports Business Journal, Major League Baseball Commissioner Rob Manfred said the Oakland Athletics are constructing an adjoining building to Sutter Health Park in Sacramento that will serve as the home clubhouse when the franchise relocates there for three years starting in 2025. The visitors’ clubhouse will also be renovated, and the minor league stadium will receive new turf, seating upgrades and video boards.
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‘Mr. Las Vegas’ celebrates 65th year on the Strip
Entertainer Wayne Newton celebrated his 65th anniversary of performing in Las Vegas during a recent show at the Flamingo Las Vegas. Caesars Entertainment, which owns the Flamingo, commemorated the performance with cake and champagne. “Had you told me at 15 years old that I would still be performing for fans on the world-famous Las Vegas Strip 65 years later, I would have thought you were crazy,” Newton said in a statement.
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Second Laughlin-Bullhead City bridge opening
A second bridge connecting the Laughlin casino community with Bullhead City, Arizona, will open June 7. The 724-foot-long bridge sits 35 feet above the Colorado River and offers one traffic lane in each direction. The bridge’s south side has a multiuse trail for bicyclists, runners and pedestrians, along with two overlooks. The town’s original bridge was built in 1986 by town founder Don Laughlin for $5 million. It will continue to operate along with another bridge some 15 miles south of town near the Avi Casino Resort.