![handle is hein.journals/gmglwr16 and id is 1 raw text is: DOI: 10.1089/glre.2011.1611
Gambits
News in brief about the gaming world
GLOOMY DAY FOR
MOHEGAN SUN
The Mohegan Tribal Gaming
Authority, the operator of the Mohe-
gan Sun casinos in Connecticut and
Pennsylvania, has experienced de-
lays in refinancing nearly U.S. $1 bil-
lion in debt. The Authority has $811
million coming due in 2012-$535
million maturing March 9, 2012,
and $250 million on April 1, 2012-
and needs to refinance the debt; fail-
ure to do so would, as indicated in a
regulatory filing, raise substantial
doubt about [the Authority's] ability
to continue as a growing concern.
The Authority's chief executive,
Mitchell Etess, downplayed the im-
minence of any threat to the con-
cern's viability, saying Auditors
have no choice ... [t]hey must put in
that language, and pointed to the
fact that lenders have waived a pos-
sible default as evidence of the
Authority's fundamental health. He
also blamed the situation on struc-
tural factors beyond the Authority's
control: a prolonged recession fol-
lowed by a weak recovery, which
has cut into consumer spending;
and the status of Native Amer-
ican gaming financing, which
has impacted our bondholder's
thoughts.... Observers also cite
the expansion of competition, as
neighboring states add or increase
gaming offerings.
Mohegan Sun is not alone in strug-
gling with debt: for example, the
Mashantucket Pequot Tribal Nation,
operators of nearby Foxwoods in
Connecticut, had to restructure debt,
and the Mississippi Band of Choctaw
Indians recently received a six-month
extension on their debt.
REVERSAL OF FORTUNE
For years, the U.S. Department of
Justice (DOJ) has insisted-without
any basis, at least in the opinion of
many industry analysts, commenta-
tors, and academicians-that the
Wire Act barred most or all forms
of online gambling. However, in a
memorandum released December
23, 2011, the DOJ reversed itself,
backing away from its long-held
opinion and recognizing what many
have believed all along: the Wire
Act prohibits only the transmission
of communications related to bets
or wagers on sporting events or
contests. This was a significant re-
versal by an agency known for a
doctrinaire opposition to all things
Internet gaming.
The memorandum, dated Septem-
ber 20, 2011, was issued in response
to requests by New York and Illinois
to clarify the statute-specifically, as
to whether state lotteries could sell
tickets online. The most immediate
impact will be on state lotteries, of
course-with states facing U.S. $32
billion in budget gaps, expect many
states to move aggressively to ex-
pand their lottery offerings. Since
lotteries brought in $56 billion in
sales in 2010, if online sales or prod-
ucts could increase that amount by
even 5-10%, that would positively
impact states' revenue shortfalls. Of
course, at this point, no one knows
how much online sales could boost
lotteries, or to what extent online
revenue might come at the expense
of off-line, but the point is that lotter-
ies, which increased sales 3% last
year over the year before, are one
of the few bright spots in states' oth-
erwise dark revenue pictures.
Down the road, the DOJ's new
stance could impact all other forms
of online gaming (other than sports
betting), such as online poker or In-
ternet-based casino games. Little
heralded or noted outside the gam-
ing industry, the DOJ's reversal
may represent a considerable gain
for the online gambling cause.
ASIA IS BECOMING THE
NEW UNITED STATES
It's already old news that Macau
has surpassed Las Vegas in terms
of gaming revenue. However,
broadening the focus from a city vs.
city comparison, it appears that
Asia is on track to surpass the United
States as a gaming market-possibly
by early as 2013.
Globally, gaming revenues grew
9.6 percent in 2010. However, those
gains were very asymmetrically ap-
portioned:
Europe, the Middle East, and
Africa saw declines;
* U.S. gaming revenue was up only
modestly; but
* Asian gaming revenue grew 49.7%
in 2010.
Looking ahead, the global gaming
market is projected to expand 9.2%
per year through 2015. During that
time, it's thought that U.S. gaming
revenue will grow 5% annually-a
healthy growth rate, especially in a
still weak and troubled economy,
but nonetheless lagging global
growth. It's Asian gaming that will
make up the difference, growing at
a projected 18.3% compound annual
rate. By 2015, PricewaterhouseCoop-
ers anticipates that the U.S. will be
40.1% of the world-wide gaming
market, with Asia comprising 43.4%
(and everyone else sharing the re-
maining 16.5%).
While part of the Asian growth is
driven by new entrants, the bulk of
it is coming from perennial power-
houses Macau and Singapore.
I KNEW IT WAS ILLEGAL
TO ACCEPT CREDIT CARDS
FROM PLAYERS TO GAMBLE
ON THE INTERNET
One of Absolute Poker's founders,
Brent Beckley, stated that, I knew it
was illegal to accept credit cards
from players to gamble on the Inter-
net. He made this statement in
pleading guilty to charges of con-
spiracy to commit bank fraud and
wire fraud, as well as conspiracy to
violate Internet gambling law. The
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