How was the past year for you from a business perspective? Well, after perusing much of the year-end industry synopsis material that has crossed my plate over the last month or so, I would assume pretty good.
And why not? From a macro perspective, the economy is buzzing along—the unemployment rate has dropped to 4.1 percent, 228,000 new jobs were created in November alone and gross domestic product crept up to 3.2 percent last fiscal quarter. Some of the economic positivity has rubbed off on the gaming operator community over the past year, with highlights such as Caesars Entertainment finally emerging from bankruptcy, new projects in the pipeline in Las Vegas and other gaming markets, and a revival in big merger and acquisition deals in the space as evidenced by Penn National’s $2.8 billion bid for Pinnacle Entertainment.
The American Gaming Association (AGA) believes gaming as a whole had a very successful 2017. In a year-end message to AGA members, AGA President and CEO Geoff Freeman touted the industry’s legislative accomplishments over the past 12 months, which, in his own words, included:
Setting the stage for a legal, regulated, nationwide sports betting market: The gaming industry has played a critical role in generating an entirely new national conversation about legalizing sports betting. Our strategy, built in partnership with our members and grounded in research, has defined the issue; cultivated innovative partnerships with law enforcement, elected officials and other influencers in the American Sports Betting Coalition; and proactively educated sports leagues and broadcasters about the opportunities associated with a legal, regulated market.
Ensuring the gaming industry benefits from the most significant tax overhaul in a quarter century: Recognizing the opportunities and challenges presented by major changes to the federal tax code, AGA engaged members of congress and partnered with business community allies to protect core interests and pass legislation that was a net positive for the gaming industry. The industry emerged with several key victories that supplemented the significant corporate tax rate deduction from 35 percent to 21 percent. The final agreement largely preserves itemized gambling deductions; exempts most operators from limitations on interest deductibility; helps ensure favorable rules for a territorial system for taxing overseas earnings; and upholds the tax credit for research and development. The tax reform debate also presented a forum for driving our goal of increasing the slot reporting threshold. We will continue to push for reducing unnecessary costs and improving the customer experience by increasing that threshold in 2018.
Advancing NextGen regulation: The gaming industry is hamstrung by outdated regulations based on antiquated, discredited stereotypes. AGA’s NextGen initiative educates lawmakers and regulators about the need for reforms that will enable our industry to innovate and improve the customer experience. In 2017, we coalesced regulators and addressed key issues such as improving the licensing process by ensuring credit checks are accurately performed; identifying inefficient shipping regulations; and modernizing background check requirements. In 2018, we will drive an aggressive strategy to streamline equipment shipping and other efficiencies for AGA members.
So, yes, in many ways and from many different perspectives, 2017 was a good year for gaming. And yet, for those of us who lived through the halcyon gaming years up until 2008, 2017 merely seems the latest in a run of so-so yearly results. My guess is that we’ll need a thriving middle class to truly get the industry firing on all cylinders again, and given recent legislative actions, I’m not sure we’ll be experiencing this any time in the immediate future.