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Friday, July 20, 2018
by Andrew Tottenham  

Managing Director, Tottenham & Co

Given the success that integrated resorts have found elsewhere in the world, I am often asked why they seem to fail in Europe. Integrated resorts often generate taxes, employment, in-bound tourism and the like.

To be clear, an integrated resort is a critical mass of components in which each is a driver for visitation, rather than a resort with a collection of amenities that you may often visit. In an integrated resort, the casino, the food and beverage offerings, the scheduled entertainment, and the retail options are in themselves drivers of visitation. Guests will, for example, come for the food and then, perhaps, watch a show or play in the casino.

by Luke Haward
CDC Gaming Reports

Not long after the World Cup began, I ran a piece in CDC International  detailing some of the latest efforts by academics and financial institutions alike to use artificial intelligence and machine learning techniques to predict the tournament's results.

The most notable and comprehensive predictions mentioned in the piece were conducted by none other than Goldman Sachs, which, considering the business they're in, clearly have a good deal of vested interest in figuring out how well they can predict future events of all kinds with machine learning or AI. I thought it might be fun and educational to look back, now that the Cup is over, at how well, or badly, various AI predictions ultimately turned out - whether any of them had France and Croatia in the final, for starters, and how close the AI got to predicting various outcomes when compared against the bookies.

The Euro News Revue
Andrew says: All good things come to those who wait. Business appears to be picking up quite nicely for Melco's City of Dreams Mediterranean. The start, you might have heard, was a little bit sluggish, but now, according to the property's President, Craig Ballantyne, visitation is exceeding expectations.
Luke says:  An important piece of follow-up coverage by the Guardian here on the avalanche of gambling ads which accompanied the World Cup. At a time when Italy is banning all future advertising contracts for gambling services, including sports sponsorship, the UK is under increasing pressure to reduce gambling-related harm. It's an issue which has risen to the surface in recent years across much of Europe, particularly as online gambling has become more omnipresent and available. It's estimated that the UK has more than 25,000 problem gamblers under the age of sixteen, and while this number appears currently stable, anyone in the industry is aware that there are always going to be emergent gaming forms which threaten to increase it, such as the skins/loot boxes phenomenon. 
Luke says: The Competition & Markets Authority has taken strong and decisive action in serving papers to the monolithic Stars Group. This behemoth, which bought out its principle poker competitor Full Tilt in 2012 in what was considered a shock move at the time, has since made several other acquisitions, including most of Crown Bet (who themselves bought out William Hill in Australia recently). This order covers Stars Group's recent merger with Sky Bet and instructs the companies to cease any further integration or transfer of business control while CMA completes its investigation into the merger's impact on competitiveness in the industry. It may well turn out that we ultimately see it blocked.  
Luke says: The Ministry of Finance and Public Administration have handed Novomatic a fifteen year license to run the Casino de Monachil in Granada, choosing them over Grupo Orenes and heavyweight Cirsa. It seems a great time for investment in Spain due to the lowered gambling taxes, and as such it's no surprise competition was intense for this license. Meanwhile, Novomatic continues to push forward in their global expansion, having also acquired Ainsworth Game Technology in Australia this year. Their multiple acquisitions in 2017 including Germany's Casino Royal Group and Spain's Basque Gaming S.L. 
Luke says: A look at the game plans and situation of West Midlands gaming firm Intouch Games, which began as a supplier of slot machines but started developing mobile content a little over a decade ago. They plan to create 150 jobs over the coming year and to expand into Europe, quote, "despite Brexit." Called an "inspiring company" by the London Stock Exchange in 2014, Intouch's retention of satellite offices in both Hungary and Romania should help this expansion plan somewhat. Prospects might have dimmed in Europe's second biggest gambling economy, Italy, given its imminent gambling ban, but Spain's recent gambling tax cut might make it fertile ground for expansion efforts in the coming years.
Andrew says: I wrote here previously about a mega project being proposed for Extramadura. Triple Five, the owner/operators of the West Edmonton mall in Canada, have now ditched that project and are instead proposing a €3.4 billion project in Malaga or Cadiz in the South of Spain. Obviously, it will be a retail-led project, but I am not sure how the numbers will stack up, given that Spain's main populations are in Barcelona and Madrid and the proposed cities are not known for high quality tourism.
Luke says: Aside from some minor concessions for the National Lottery and a reported grandfather exception for the duration of contracts already in place, it seems that Italy's total ban on gambling advertisements will go ahead as planned starting on 1st January 2019. What's more, Deputy Prime Minister Luigi Di Maio intends to lobby the EU for a Union-wide ban, although this seems highly unlikely to get anywhere. Still, for the second-largest gambling economy in Europe, this is a body blow; as covered in the article, the ban will also apply to all sports sponsorship. Expect to see extensive lobbying from the industry, as well as some interesting potential workarounds, such as social advertising (encouraging fans and users of a service to write social media posts about it.) 
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