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The Walt Disney Company is one of the most successful media conglomerate companies in the world. Just about everyone has heard of the Disney theme parks stationed in Florida, California, and abroad. Just about everyone has seen classic Disney films like Cinderella and Beauty and the Beast. Not everyone knows about Disney's relationship with the gambling industry, however, and it is a noteworthy one.
Over the years, Disney has acquired the rights to several major entertainment companies and their licensed characters. In 2009, Disney bought the Marvel Entertainment company, creator of the famed Marvel comic books and a slew of popular superhero characters. In 2012, it purchased all rights to LucasFilm, the parent company that created the Star Wars brand.
Disney announced its plans to phase out all Star Wars and Marvel-themed casino slot machines in the United States last fall. The multimillion dollar company has the power to do this, because it now owns all rights to these brands.
According to a Disney spokeswoman, the character-themed slot phase-out is not a new decision. As part of Marvel's “integration” with Disney, she said the decision was made several years ago to let the machines gradually fade out through attrition. Only a few Marvel license agreements remain at this point, and they are set to expire within the next several years. Star Wars-themed slots will also trickle away, but it will take a few more years for that process to complete.
[...] Disney wields a certain amount of power over casinos, both on land and online, because of these acquisitions. Instead of promoting Star Wars and Marvel characters via slot machines, the company prefers to use their likenesses in movies that serve to perpetuate the Disney brand.
As the owner of LucasFilm, Disney has another trilogy of Star Wars films currently in the works. [...] Fans can expect to see Disney continue to advance their brands through avenues other than the gaming industry.
Disney has made its opinion of the gambling industry known in Florida: It does not support the addition of more resort casinos to that area. Not only does Disney plan to phase out Marvel and Star Wars-themed slot machines, it also hopes to prevent the development of new casino resorts in the state.
As it stands today, Orlando's Walt Disney World is the top tourist attraction on the globe. Over 50 million people visit the entertainment resort every year and partake of theme parks like Magic Kingdom, Epcot, and Hollywood Studios. From a business standpoint, it makes sense that Disney would not want another tourist draw infringing on its potential customer base in the Orlando area.
Disney denies that self-interest is its main motivation for opposing new casinos. Andrea Finger, a spokeswoman for the company, said the corporation opposes casino expansion for “many reasons.” One of the primary reasons is the fact that Florida is a “family friendly” vacation spot; adding more casinos to the landscape would tarnish that. Finger lauded Florida's efforts in “research, innovation, and entrepreneurship” and indicated that adding more casino resorts would create an “inconsistent” atmosphere in the state.
Finger made no statement suggesting that Disney is protecting its own interests by objecting to more casinos. This inference has been made, however, by critics based on the connection between Disney and its Marvel and Star Wars slot machines that recently came to light.
Critics also cite the fact that increased Florida casinos might steal valuable convention contracts from the Mickey Mouse company. At this point, Disney hosts approximately 700,000 square feet of convention space in its Florida resorts.
Disney's ownership of Marvel and LucasFilm slot machines was brought to the public's attention by New York Times reporters Lizette Alvarez and Michael Snyder. Critics immediately began shouting hypocrisy at the fact that Disney, a vocal gambling opponent, owns and profits from character-themed casino slot machines.
The Times reporters asked Disney whether its ownership of the slots “undercut” its casino gambling stance. A spokeswoman responded that the company's affiliation with the casinos was only temporary, and that it would take a few years for current slot machine contracts to expire.
[...] When Marvel and Star Wars-themed slots do eventually disappear from casinos, their absence will be a blow to the gaming industry. Casino patrons are drawn to the colorful games touting Spider Man, Darth Vader, and other exciting Hollywood characters. Until the machines are completely phased out, the characters will continue to entertain casino patrons both online and on land.
The online gaming industry will definitely be affected by Disney's prohibition. The Spider Man Slot game, for example, is an enticing game for online gamblers that was introduced in 2012. Other Marvel-themed online slots include Iron Man 2, Iron Man 3, the Fantastic Four, Captain America, Thor, and Wolverine Slots. The eventual loss of these games will leave a gaping hole in customers' palette of gaming choices.
[Possibly in response to Disney's decision], a group called the Associated Industries of Florida launched a new pro-casino campaign. This group is lobbying for more casinos in the area as a means of promoting jobs and stimulating the local economy. Analysts expect the battle between Disney and pro-casino lobbyists to become more heated as politicians compete for voter support in the upcoming election. (Source)
[However, Orlando isn't the only city that Disney is engaging in anti-casino efforts with.] The biggest challenger standing between [the city of] Miami and casinos is a mouse.
Walt Disney World, the giant resort near Orlando whose four theme parks draw more than 45 million visitors a year, has made preventing "destination" casinos a top priority. And few, if any, businesses carry as much weight in Florida as Disney, which employs more than 60,000 workers, generates nearly $600 million a year in tax revenue — and doled out more than $2 million to political candidates and causes during the past election cycle.
Some analysts say Disney — and, by extension, Orlando's entire tourism industry — has good reason to be wary of casinos. Though adult-oriented resorts in South Florida are unlikely to appeal to Disney's core audience of families with young children, they could siphon away travelers in narrower segments that are also important to the resort, from South Americans to conventions to weddings.
"Disney has lots of little pockets or niches that they're really good at getting market share in. And it adds up," said Duncan Dickson, a professor at the University of Central Florida's Rosen College of Hospitality Management. "Disney doesn't want another Las Vegas anywhere close to them. Who needs the competition?"
[Case in point, Disney also has Disney Cruise Lines, based in both Miami and Port Canaveral (Orlando).] Disney Cruise Line has revealed it will extend its popular "Star Wars Day at Sea" program through 2019, with the addition of nine cruises -- each of which will include a Star Wars-themed sea day, complete with special programming and restaurant menus. Family-friendly activities include Star Wars character meet-and-greets, movie nights (featuring new releases), Star Wars trivia, and a Jedi training show, where kids can learn lightsaber skills and battle Darth Vader.
Throughout the day, restaurants and bars also will serve themed foods and cocktails. The sea day will end with a fireworks show and deck party, hosted by Star Wars heroes and villains. All cruises span seven nights and depart from Port Canaveral (Orlando), Florida. (Source)
[...] Disney has always opposed efforts to expand gambling, [citing it as being againts its "family-friendly" image].
The Walt Disney Co., one of the most brand-protective companies on the planet, does not want to jeopardize its kid-friendly reputation by any association whatsoever with casinos and the taboo images they often conjure. The company's cruise line is the only major operator to sail ships without onboard casinos, which are typically one of the biggest generators of on-board spending.
"We've studied this issue carefully and remain opposed for many reasons," said Disney spokesman Mike Griffin, "including the fact that it is inconsistent with Florida's brand as a family-friendly destination, and with the efforts we've long supported to diversify Florida's economy through research, innovation, and entrepreneurship."
The legislation to be considered in Tallahassee would authorize three "destination" casinos in Miami-Dade and Broward counties. Each would boast a luxury hotel, shops, restaurants, convention space and casinos with every major game, from blackjack to roulette and craps. Any company awarded a casino license would have to spend at least $2 billion building the facility.
Las Vegas Sands and Wynn Resorts, both based in Las Vegas, and Genting, a Malaysian-based resort developer, are among the companies expected to seek licenses. Genting has already spent more than $300 million to buy bay-front property in downtown Miami and has announced plans for a $3.8 billion resort.
All have promised they will create thousands of jobs in South Florida, making the deal attractive to lawmakers hoping to lower the state's 10.6 percent unemployment rate.
Analysts say anyone that invests that much capital to build a resort also will have to spend lavishly to market the property. At a minimum, that will force Disney to ramp up its own spending on advertising, eroding its profit margins.
"Anytime you've got to fight and compete with more marketing dollars, which you know these folks have in abundance, it makes Disney's job that much harder to battle against," said Vicki Johnson, a tourism-marketing expert in Orlando.
More specifically, casinos could prove attractive draws in key markets for Disney. Executives at Genting, for instance, have said they would market heavily in Latin America.
Latin America — particularly Brazil, its biggest country — has become one of Disney World's most valuable markets in recent years. This summer, even as overall attendance at the resort was about flat with a year ago, Disney officials said traffic from Brazil was up by a double-digit percentage.
Though Disney doesn't disclose exact attendance numbers, national data show that visitation from Brazil is up 27% to more than 833,000 so far this year. And though Miami is the most popular destination for South American travelers, Orlando is growing more rapidly.
Disney says its business from Brazil is predominantly family-leisure travel, the group least likely to be swayed by casinos. But some industry followers say lavish resorts, when combined with the boutique shopping already in Miami, might be enough to peel away some of that business, especially Brazilians with older children or none at all.
"All of a sudden, it really cuts into their [Disney's] South American markets," Johnson said.
Group meetings and conventions business is also a growing profit center for Disney, which has nearly 470,000 square feet of meeting space spread among its hotels. It also routinely picks up lucrative private parties and other business tied to shows using Orange County's massive, publicly owned convention center.
Finally, allowing casinos in South Florida could lead to pressure to build more in other parts of the state. Already, some hoteliers in Orlando — led by Harris Rosen, owner of three major convention hotels — have made rumblings about bringing casinos to Central Florida. And officials at Port Canaveral — Disney Cruise Line's home port — are interested in casinos, too.
"Once they get their foot in the door, what's next? Orange County is going to say, 'Well, if it's legal in Dade County, why isn't it legal here?' " said Dickson, the UCF professor.
Disney has worked to enlist broader business groups to fight the casino legislation, most notably the Florida Chamber of Commerce, even though more than half of the businesses represented on the chamber's board of directors say they are neutral on the issue.
And the opposition from Disney has put casino boosters on the defensive during the past few days.
"Florida's identity cannot be changed because one casino or two destination resorts open in Miami-Dade County," said state Rep. Erik Fresen, R-Miami, who is sponsoring the casino legislation in the Florida House of Representatives.
"Florida will always be the Sunshine State," he added. "The dominant trademark of Florida will always be Disney World. I don't think they have anything to worry about when it comes to that." (Source)
There have been multiple attempts to garner support in the state legislature for non-Native American casinos and other forms of gambling expansion in the state. Currently, the Seminoles control the ability of Florida to expand full-fledged casinos per their current compact. And the power of the Seminoles in the state is substantial.
In order to change current law, there must be a constitutional amendment backed by the voters of Florida. There is one such opportunity on the ballot for the November 6, 2018 election.
The Casino Gambling Initiative, if approved, would give voters the exclusive right to authorize casinos going forward, casinos being comprised of card games, slot machines, and other casino-style games. All ballot measures in the future would then require a citizen-initiated process by which a number of signatures of registered voters must be obtained for ballot consideration.
Currently, however, the Seminoles reserve the exclusive right to offer blackjack, craps, and roulette in Florida, which would present a problem that would have to be addressed. The agreement with the Seminoles was signed by Governor Rick Scott in 2015, and is effective for 20 years.
While this may end up in a legal fight, poker rooms are not an exclusive right of the tribe, and would not be an issue.
If Amendment 3 passes in November by 60% or more of the popular vote, a new day may begin for casinos in Florida. This will also drastically increase the opportunity for poker rooms throughout the state. (Source)
The US Supreme Court repealed the longstanding federal sports betting ban known as PASPA (Professional and Amateur Sports Protection Act). The landmark decision allows states to dictate their own sports wagering laws.
That means sports betting could be coming to Florida casinos, should the legislature pass market regulations. But Republican gubernatorial candidate Adam Putnam said this week that if he’s elected, he would oppose such legislation.
[Putnam also echoes Disney's reasoning.]
“I’ve always been one who has said we don’t need to expand the footprint of gambling in Florida,” Putnam declared at a campaign stop. “It’s not who we are as a state. We’re a family-friendly vacation destination. We’re a small business-oriented state.”
“If I lived in the middle of the desert in Nevada, [like Las Vegas], maybe I would grasp onto whatever straw or life raft somebody threw me,” he continued. “But we live in Florida, and we’ve got unlimited opportunities, and we don’t need to sell our state short.” (Source)
Earlier this year, Disney also gave $400,000 to Florida Grown, a committee supporting Putnam's gubernatorial bid.
[...] Disney officials would not agree to an interview, but in a statement, Jacquee Wahler, vice president of Walt Disney World Resorts, wrote, “We support candidates who understand issues important to our company, and demonstrate strong support for business and tourism in Florida.” (Source)
[Meanwhile, Disney is busy constructing what it hopes will be its next big moneymaker: Galaxy's Edge, a Star Wars-themed land in Hollywood Studios at Walt Disney World in Orlando. Disney also plans to construct a Star Wars-themed hotel and resort adjacent to Galaxy's Edge.]
The ongoing success of high-profile films, like the Marvel and Star Wars franchises, can play a big role in the theme parks ability to tap into new characters and storylines for rides and shows.
Experts have said the success in theme park rides today are built on characters and properties that resonate with visitors outside the park. Thus new lands themed after popular franchises have proven to be a boon — like Disney's Star Wars and Frozen attractions, and Universal Orlando Resort's success with the Wizarding World of Harry Potter.
[So far this year], the theme parks division for the quarter saw a 13% increase in revenue to $4.87 billion, up from $4.29 billion for the same time last year. The division also saw a 13% increase in revenue for the first six months of the year to $10.03 billion, up from $8.85 billion for the year-ago period.
According to the earnings report:
"Results included a benefit from a shift in the timing of the Easter holiday relative to our fiscal periods. The current quarter included one week of the Easter holiday, whereas the entire Easter holiday fell in the third quarter of the prior year. Higher operating income at our domestic parks and resorts was primarily due to increased guest spending, attendance growth at Walt Disney World Resort and higher sponsorship revenue, partially offset by increased costs.
Guest spending growth was due to increases in average ticket prices, average daily hotel room rates and food, beverage and merchandise spending. The increase in costs was primarily due to labor and other cost inflation, an increase in depreciation associated with new attractions and higher technology spending." (Source)
[Driving this growth are Disney's planned new additions, including Galaxy's Edge, which is currently under construction ("labor costs").]
Disney’s new Star Wars land won’t open until next year, but it is not too early to declare that Star Wars: Galaxy’s Edge will be the most ambitious theme park land ever built.
The numbers alone might justify the claim. At 14 acres each, Disney’s twin Star Wars lands will be the largest the company has built at the Disneyland and Walt Disney World resorts. Disney has not confirmed a budget for Galaxy’s Edge, but the project is believed widely within the industry to be costing at least one billion dollars. (Source)
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