Wynn Resorts settles for $2.4 billion
Wynn Resorts Ltd. has filed a disclosure with the Nasdaq stock exchange informing investors that it has reached a settlement with Tokyo based Universal Entertainment Corp to the tune of a sweet $2.4 billion.
The dispute stemmed from a tussle back in 2012, after the board at Wynn Resorts forced out Japanese casino tycoon Kazuo Okada amid allegations he participated in inappropriate payments to gambling regulators in Macau and the Philippines.
Okada had held nearly 20% of Wynn resorts via a US based subsidiary of Universal Entertainment Corp, Aruze USA Inc., but had his shares forcibly redeemed after being forced to step down from the board. In an investigation led by by former Director of the FBI Louis Freeh, Wynn Resorts said it had uncovered over three dozen instances in which Okada improperly engaged foreign regulators for his own benefit, including handing out over $110,000 in cash and perks to foreign officials. Okada has denied the allegations of fraud.
The settlement, which saw Aruze pick up $2.4 billion in exchange for agreeing not to consider itself a part of the shareholders agreement, a document currently at the center of a heated dispute between former Wynn Resorts CEO Steve Wynn, who was forced to step down over mounting allegations of sexual misconduct, and his ex-wife Elaine Wynn, who still controls approximately 10% of the company, was far below analysts’ expectations. The shareholders agreement effectively barres Elaine Wynn from controlling her 10% stake. While the settlement resolves a major outstanding issue on Wynn Resorts books, it falls short of completely resolving the on-going case in Nevada state court. Wynn has agreed to make the payout by the end of March.
Sands Bethlehem sells for $1.3 billion
The Poarch Band of Creek Indians of Alabama have purchased the Sands Bethlehem casino for $1.3 billion. Casino mogul Sheldon Adelson, who owns the LAS Vegas Sands Corp, sold the historic property to Wind Creek Hospitality, the tribes local subsidiary only months after the state of Pennsylvania decided to legalize online gambling.
Trump buddy and Republican fund raiser Adelson has long been a vocal proponent of eradicating online gambling via federal law to protect his own casino empire. Adelson has spent untold millions on lobbyists seeking to get the Restoration of America’s Wire Act into law, effectively banning all online gaming across the nation. While the act has largely been stalled in Congress for the last four years, many observers say that fact that it exists has all but grounded legislation seeking to legalize online gambling on the federal level.
The Sands Bethlehem was build on the 124-acre former grounds of the Bethlehem Steel works. Adelson was attributed with creating thousands of jobs for out of work Pennsylvania steel workers. Built at a cost of $743 million in 2009, the casino quickly rose to prominence as the place to play in Pennsylvania, pulling down $550 million in revenue from slots and table games in 2017, to make it the second largest earner among Pennsylvania’s 12 legal casinos.
The state legislature voted last year to legalize online gambling across the state, in a move that irked Adelson, who’s other properties include The Pallazo and The Venetian in Las Vegas, five mega casino resorts in Macau, and the Marina Bay Sands in Singapore.
The move is definitely seen as a significant step up for the Alabama tribe, who also currently own stakes in greyhound and horseracing tracks in Alabama, three Alabama casinos and casino properties in the Caribbean.
The final deal is still subject to approval by the Pennsylvania Gaming Control Board.
EU Ombudsman rejects online gambling infringement complaint
The European Union’s Ombudsman’s office has ruled in favor of the European Union in a complaint brought by the European Gaming and Betting Association (EGBA) in which the EGBA argued that the EU has failed to enforce its own rules when it comes to the cross-border provision of online gaming services.
The EGBA leaned heavily on Article 56 of the Treaty on the Functioning of the European Union, which states that restrictions on the freedom to provide services, in this case online gambling, within the EU will not be tolerated.
The issue arises from the fact that an increasing number of EU member states are raising their own national restrictions on online gambling services, usually in an attempt to protect existing state run or state sponsored monopolies in online lotteries and casino gambling.
In a move said my many analysts to be purely political in nature, the Ombudsman’s office dismissed the EGBA’s complaint that the regulatory framework for online gambling in a number of states infringed EU law, primarily the right to the free provision of services, noting that the European Commission had wide ranging discretion as to whether to pursue infringement complaints (which it refused to do) and hence was acting within its legal rights.
Acording to analysts, the Ombudsman’s statement was tantamount to saying that the EU doesn’t have to enforce its own rules if it chooses not to. Both France and Italy have previously won Europeam Commission approval to erect firewalls around their countries online gambling services explicitly to protect domestic operators.
Unfortunately for the EGBA and the idea of the free movement of online services within the EU, in the aftermath of the Brexit vote in the UK the Commission appears to lack the political will to engage with member states to enforce its own rules.
Maarten Haijer, Secretary General of EGBA, explained, “Infringements proceedings in this sector have become a complete mess since the Commission decided to wash its hands of its responsibility to ensure online gambling regulation in Member States is in line with EU law. While the Ombudsman’s decision is disappointing, it does confirm that the Commission’s decision to close these infringement cases was a political one. If the Commission is not taking seriously its responsibility to uphold EU law and ensure Member States, like Hungary, comply with EU Court of Justice rulings, then who will?”