Ameristar is waiting and watching, like Wynn By Ken Adams, CDC Gaming Reports December 2, 2019 at 6:00 am In my piece from November 15, Maddox and Wynn Resorts Know When to Hold’Em, I opined that Wynn Resorts was waiting for Las Vegas to stabilize after undergoing some dramatic changes in the casino marketplace. The changes include major expansions of convention facilities, two new mega-resorts, the remodeling and rebranding of some of the older casinos, new casinos owners on the Strip, and the official arrival of the Las Vegas Raiders. In science that could easily be considered a chaotic environment; from those environments new things emerge, but it is difficult – in fact, nearly impossible – to accurately predict the emergent properties. The chaos model is one way to think about Las Vegas over the next decade, but Las Vegas is not alone in currently having a complex, changing and unstable environment. Many casino jurisdictions are entering a comparable situation. Las Vegas Strip at Night” (CC BY 2.0) by wuestenigel Sports betting has become a major factor in destabilizing the gaming industry. Thirteen states have legal sports betting now, and another six will begin taking bets next year. Not all of those states have a full-fledged casino industry, but they border states that do. 21st century sports betting is not your father’s Las Vegas sports book: it is run by a wide variety of operators and located wherever lobbyists and legislators want it, essentially. Nevada seems to be alone in trying to keep a lid on sports betting; the new books that open are slated to be located in many places besides casinos, including bars, sports venues, and online. The online version is likely to have the biggest impact on casinos, sports and society in general, although the nature of that impact is still uncertain. It is unlikely that it will be visible for years. The players include lotteries, English bookmakers, U. S. casino operators and Indian tribes. The UK companies are jumping in with both feet, investing in seemingly every opportunity that presents itself. The casinos are forming partnerships with betting companies and leaving the larger capital investments to those companies. Not everyone will succeed or even survive. It is much too early to even attempt a guess at the winners and losers in this game. It seems certain that mobile sports betting will be popular, but what that means for traditional sports books or casinos in general remains a looming question. The uncertain nature of sports betting is not much different in the states which have authorized new casinos. For traditional casinos, every region and every state is nearly at the saturation point. Sometime in the not too distant future there will be too many casinos in Pennsylvania, Illinois, Indiana and New Jersey. Much like sports betting, it is too soon to predict how many casinos will be viable in those states in five years, but it is a sure bet it will be less than the number reached at the peak of build out. Potential casino investors and developers are moving much more slowly now than in previous expansions. Both Illinois and Pennsylvania currently have licenses available for which there are no bidders. Of course, there are two issues for would be licensees – not only the addition of more casinos in already crowded markets, but the VLTs spreading out across the landscape, as well. As casino operators in Illinois can attest, those VLTs cut into both traditional casino revenue streams and mobile sports betting. No traditional market study is going to be able to give careful investors all of the information necessary to make good investment or development decisions. Also on the list of changes affecting the industry are the states that have authorized riverboat casinos to move onto land. The first state to authorize the end of boating casinos was Mississippi. After Hurricane Katrina hit the Gulf Coast, Mississippi passed legislation allowing casinos to move on land, under the premise that it was safer. The casinos in Mississippi responded as quickly as they could. In fact, it seemed to be a no brainer; riverboats are artificially confined locations that restrict the ability of casino operators to create optimal casino layouts. But subsequent onshore legislation has not had the desired result: a year after the authorization in Louisiana, the casinos are all still sitting on the water. Indiana is experiencing a comparable trend. Well, sort of. One of the Hoosier State’s casinos, the Tropicana Evansville, has moved onto land; another, the former Horseshoe Southern Indiana, will reopen on land December 12 as Caesars Southern Indiana; a third will relocate as part of the move of an existing license from one location to another; and two are testing the waters with partial moves to an existing landside pavilion. Ameristar in East Chicago is one of those casinos. Ameristar did not pick up lock, stock and barrel and set up camp on terra firma. Instead, it’s made small moves one step at a time. Ameristar first built a high-limit room in its pavilion and then in October opened a sports book in the same location. The book is doing so well that the casino is adding more slots and games to its pavilion. A casino spokesperson said there was room for still more land-based expansion, but management would be waiting and watching to see how the new pavilion works. With the sports book driving traffic, a small investment seems justified in the current environment. Ameristar is right to be cautious; the situation is far from stable. Across the state line, Illinois has not yet finished its buildout, which will include sports betting. The state is expected to introduce it in 2020, and it will include the option for mobile wagering. That is part of the reason that the sports book in Ameristar is doing so well right now: half of the handle for the state stems from its proximity to Illinois and the Chicago market. That advantage will go away. The bottom line is that the situation in Indiana is in flux, as it is in Pennsylvania, Illinois, New Jersey and Las Vegas. It seems to me that the only prudent strategy at the moment is to wait and watch, much like Ameristar and Wynn Resorts are doing.