Horizons Fall/Winter 2020

Internet Sourced Revenues by Licensee

Licensee(s)

Online Operators

2019 Internet Sourced Revenues

DRAFT KINGS, MOHEGAN SUN, FOXBET, & BETSTARS

RESORTS DIGITAL

$179,736,167

LANDRY’S & BETAMERICA FAN DUEL & POINTS BET MGM RESORTS INTERNATIONAL

GOLDEN NUGGET

$178,483,018

MEADOWLANDS

$119,973,530

BORGATA

$82,797,431

CAESARS, HARRAH’S, & BALLY’S AC

CAESARS ENTERTAINMENT, 888.COM

$55,333,021

Tax Policy Leads to Seven Years of Zero Revenue

Looking at the 2019 internet and mobile sports wagering data, the Nevada headquartered operators of MGM Resorts International and Caesars Entertainment have fallen behind the new entrant in the race to market leadership in both the internet gaming and online sports wagering industries. Moreover, the market leaders include the legacy Daily Fantasy Sports operators (Draft Kings, Fan Duel, and Points Bet) that Nevada effectively kept out in October 2015.

Prior to the casino closures, Delaware had been operating online gaming since 2013 and had produced zero top-line revenue for the casino operators offering online gaming. Under Delaware’s internet gaming laws, the state’s lottery fund is to receive the first $3.75 million in revenues after the state’s operation and administration expenses are covered. Once the $3.75 million is reached, the revenues are then shared between the state and the casino operators, with the casinos receiving 43 cents of every dollar generated from online slot machines and 84.5 cents of every dollar generated from online table games. Since Delaware began offering online wagering, the state-wide industry has never surpassed the $3.75 million threshold, meaning the casinos have never realized a dollar of top-line revenue (revenue, not income) since beginning their online operations in 2013. Closing Thoughts With COVID-19 changing the way of life throughout our society, the legalization of internet gaming will become a topic of discussion in state legislatures. When looking to adopt policies around internet gaming, policy makers should heed the lessons learned from the original three internet gaming jurisdictions.

GAMING SERVICES

RubinBrown is a leader in the gaming industry and serves clients across the nation. Our team possesses high levels of industry experience, as well as the tools essential to serve all types of gaming organizations.

Brandon Loeschner, CPA, CISA, CGMA Partner Gaming Services 314.290.3324 brandon.loeschner@rubinbrown.com Daniel Holmes, CPA, CIA, CGMA Partner Gaming Services 702.579.7034 daniel.holmes@rubinbrown.com

22 How Casino Closures Unmasked the Winners & Losers in Online Gaming