US Gambling Industry Landscape Predictions for 2016

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Monday, January 25th, 2016 | Written by Adam Brown

What lies ahead for the gambling industry in 2016? Amongst the experts weighing in and making their predictions recently is Howard Stutz of the Las Vegas Review-Journal, who shared his list of predictions for the upcoming year, many of which do seem to be very plausible. Here are some of the things he sees ahead for 2016:

1: Caesars Entertainment Corp’s Bankruptcy Will Go On and On

Stutz anticipates that the decision over whether or not Caesars Entertainment Corp will be allowed to reorganize under Chapter 11 will take a long time to come to fruition. The court-appointed examiner was expected to provide a report back in December, but it has already been delayed once.

2: Resorts World Las Vegas Will Move Ahead

Back in 2013, Malaysian company Genting Berhad purchased an 87-acre piece of land in Las Vegas from Boyd Gaming Corp. The previous site of Echelon, the real estate has been unused ever since, but Stutz believes that 2016 will see ground breaking developments on the $4 billion Resorts World Las Vegas which has been anticipated for the site.

3: Things Will Improve in Macau

The Chinese gambling market based in Macau has suffered declining revenues for 19 straight months, but Stutz believes that there will be a turnaround in 2016. He feels that this will be spurred by the opening of three multibillon new venues: one from the Las Vegas Sands Corp, one from Wynn Resorts and one from MGM. There is also a chance that the Chinese government may pass reforms to help the industry get back on its feet, he believes.

4: A Big Merger Could Occur

Stutz took a gamble by predicting a possible merger between Genting and Wynn. He sees the potential deal as having a positive expectation for Wynn, which would get a location in Singapore out of the newly formed company; and for Genting, which would finally achieve a presence in Macau. Other industry experts have already stated similar beliefs that the two companies are a good fit for one another because they do not have a lot of redundancy in terms of where they currently operate. As Macquarie Securities gaming analyst Chad Beynon explains:

“We continue to believe that Genting and Wynn appear to be good strategic fits given the different markets, the quality of brands and the opportunity to create a global powerhouse.”

5: RAWA Will Meet Its Final Demise

Stutz believes that efforts to alter the existing Wire Act to make online poker illegal will ultimately be unsuccessful despite the attempts of Sheldon Adelson. Therefore, online gambling in Nevada, New Jersey and Delaware will remain lawful under state law, but by the same token Stutz believes that there will be no move towards a federal nationwide iGaming legalization, either.

6: At Least One State Will Legalize Online Poker

Stutz believes that California, Pennsylvania or both states will pass iGaming legislation in 2016. Being the largest, most affluent state in the whole of the US, however, gives California the power to transform the country’s iPoker industry, with Stutz predicting California Governor Jerry Brown will subsequently agree an interstate compact with Nevada Governor Brian Sandoval, leading to many major Las Vegas casino operators vying for a piece of an altogether more lucrative industry.

7: DFS Will Continue to Be Debated

Lastly, Stutz believes that more states will take up reviews of daily fantasy sports betting, and more specifically about whether or not it should be categorized as a form of gambling. In some states, this has already lead to a ban on DFS betting, including Nevada, New York, Illinois, and Texas. More states are sure to follow in 2016.

Future Not Certain

While it’s likely that many of the predictions outlined by Howard Stutz in the Las Vegas Review-Journal will come to pass in 2016, the future is never certain. Few people could have anticipated that daily fantasy sports would cause such a huge stir in 2015, and as Stutz explains:

“That was before DraftKings and FanDuel blasted television audiences with commercials that had more airtime than the actual football games.. That’s the trouble with making predictions. It’s not an exact science.”

Similarly, it’s possible that a fresh scandal or unexpected development will end up dominating the headlines in the gaming industry this year.