Category Archives: Gambling

mark pazniokas / ctmirror.org

Upstairs at Winners, the new OTB in Bobby Vs in Stamford. A bigger video screen is over the bar.

Stamford Ted Taylor settled onto an upholstered leather bench in an unfinished booth at the new Bobby Valentines restaurant and sports bar, the Connecticut Gold Coasts introduction to a plusher version of whats been a shrinking, down-market gambling niche off-tracking betting.

He is from Sheffield, England, late of Her Majestys Royal Naval Service and currently in the employ of Sportech PLC, the British company that owns the Connecticut rights to pari-mutuel betting on horses, dogs and jai alai. State records show gamblers bet $88 million last year at the states 16 OTB facilities or by computer or smartphone. Yes, theres an app for that.

Taylor showed off the new place before its opening last Friday, raising his voice above the sounds of cordless drills and hammering, pausing to check with an architect and chef, as he talked about the transitional state of gambling in Connecticut, the improbable home of two of the worlds largest casinos, the scene of a frantic lobbying fight over the rights to build a third.

Hes bullish on his downstate investment in 20,000 square feet of commercial space spread over three levels, the basement still a work in progress. He is less enthused about the expensively refurbished Bradley Teletheater in Windsor Locks, if only because the General Assembly just authorized a new casino four miles away in East Windsor.

How do I end up being screwed? Taylor said. How is that fair?

Its a hard sentiment softened by a matter-of-tone that suggests Taylor already is muddling on, even if he warned legislators that a casino in East Windsor would cost 35 percent of his business in Windsor Locks and 20 percent at his other closest OTBs in Manchester, Hartford and New Britain. He said he has the standing to sue, but not the intent.

mark pazniokas / ctmirror.org

Ted Taylor, who runs Sportechs OTB operations in Connecticut.

If the casino is built, Sportech figures to be collateral damage at a time when it is trying to reinvent the OTB business by marrying it to food, drink, comfy surroundings and lots and lots of technology, from iPads to a two-story high-definition screen that looms over a long bar. Not counting the latest project, Sportech reports spending $20 million on its facilities over the past six years, including about $5 million at Bradley, where there also is a Bobby Vs, named for the former baseball player and manager.

The new Bobby Vs is on Atlantic in downtown Stamford, around the corner from a Capital Grille and directly across the street from the Basilica of Saint John the Evangelist, allowing worshippers to go Mass at 4 p.m. on a Saturday and still get a bet down on the Derby before post time at Churchill Downs. Taylor assures that he and the monsignor are getting on just fine.

Taylor, 57, who flirted with playing professional rugby after 10 years as a naval officer, a career he attributes to his being tall and able to walk in a straight line, shrugged when asked if he is now a restaurateur who offers gambling, or a gambling entrepreneur who stocks a more-than-decent bar, where the top shelf features the pricey Irish whiskey, Midleton.

Yeah, its a little bit of both, Taylor said. Its the next generation of a gaming facility in accordance with our license. We know that what people want is great quality food and entertainment, and then some of them will game and vice versa. So its presenting what is known historically as the OTB market in a different perspective, with a lot more style and panache than people might expect, to try to recover from years of not being so great.

The movie image of the old OTB is a harshly lit storefront, floor littered with losing racing slips and cigarette butts. Winners, the Sportech-branded betting parlor ensconced on the second floor of Bobby Vs, is soft light, dark woods and a mix of tables and long rows of betting terminals. For true students of the ponies, there is a quiet room off to the side, where bets can made from what look like study carrels at a library.

Sportech has similar facilities in the Netherlands and California.

MGM Resorts International set off a chain reaction by winning a license to open a casino resort in Springfield, a more convenient ride up I-91 from Hartford than the trip east to the two massive tribal casinos, Foxwoods Resort and Mohegan Sun, where gamblers collectively lost $1.56 billion at slots and table games in 2016, according to public financial records.

The Mashantucket Pequot and Mohegan tribal nations, owners of the casinos, convinced legislators to pass a law allowing them to jointly build a casino just off I-91 in East Windsor, about halfway between Hartford and Springfield, to blunt the loss of market share to Massachusetts when MGM Springfield opens in late 2018.

What about blunting the loss of Sportechs market share? Legislators declined to make him whole with a cut of the gross gaming revenues from the new casino, an approach followed in some other states. Instead, they offered him a consolation prize: Raising the statutory cap on OTB locations from 18 to 24.

Since Taylors company now operates 16 OTB facilities, that means it already has two unused licenses, evidence that the state of Connecticuts blessing wasnt what was holding Sportech back from expansion. According to a report submitted to the legislature by a consultant Taylor hired, Spectrum Gaming, the betting handle for OTB in North America peaked in 2003.

Mark Pazniokas / ctmirror.org

Betting carrels in a private room at the OTB in Stamford.

That year, gross sales at OTB were nearly $280 million in Connecticut, a relative pittance in a state where residents spent $865 million the same year on lottery tickets and close to $52 million on charitable gaming. Connecticut Lottery sales cracked $1 billion in 2011 and have continued to increase, while the rest of the states legalized gambling market has suffered, squeezed by out-of-state competition.

The state of Connecticut, of course, has a vested interest in gambling. Its annual cut from the billions wagered on slot machines, the lottery, OTB and charitable games is about $590 million, down from a high of $717 million in 2006. That was the year Yonkers Raceway opened the Empire City casino, putting 5,300 video slot machines just off I-95 between New Yorkers and the Connecticut casinos.

Under an exclusivity deal with the tribes, Connecticut gets 25 percent of the gross revenues from slots, worth about $266 million and falling from its high of $430 million in 2007, the year after Yonkers opened and before the Great Recession of 2008. The lottery contributes about $320 million annually to the states general fund. OTB chips in about $3 million, charitable games another $400,000.

The only major purveyors of gambling who dont pay tribute to Hartford are the sports books, the ones who take bets the old-fashioned way, illegally and off the books, or on line from the legal safety of some off-shore haven. Congress has placed strict limits on sport betting, but Taylor and others in the business wonder how long that will last.

The recently passed casino bill authorizes the state to study and prepare for sports betting, should it become legal.

Taylor estimates that illegal sports gambling in Connecticut could be as much a billion dollars. He noted that the state spends little time trying to stop it, an assessment shared by law enforcement, so why not legalize it, regulate and tax it?

Legalized is in the open, so anomalies in betting can be tracked as evidence of a possible fix. Adam Silver, the NBA commissioner, broke with the rest of professional sports in the U.S. in 2014 with an op-ed in the New York Times urging a different approach.

Taylor said sports betting would go well with his OTB parlors.

OTB works on tight margins. Gamblers bet through Sportech, not against it. Pari-mutuel is a fancy term for pool betting. All the bets go into a giant pot, and the winners divide the money in proportion to the size of their wagers, minus the take by Sportech, the track where the horses actually ran, and their silent partner, Connecticut.

Taylor says 8 percent goes to the track, 3.5 percent to the state and a 1.5 percent for various fees to keep the electronic system going.

Sportech wins on volume, not by a specific horses winning or losing. That means Taylor gets to root for his customers to win, to leave happy and come back. When they bet on the Belmont, they are betting against horseplayers in New York, plus those who placed wagers on OTBs across the county.

I want you to win, Taylor said. I want you to beat the guys in New York.

Read more:

A British bet on OTB in Connecticut's roiled gambling market - The CT Mirror

Joey Barton is now a free agent after leaving Burnley.

Joey Barton has criticised the Football Association (FA) for failing to tackle the problem of gambling in football in an interview with the Sunday Times.

Barton was given an 18-month ban in April after admitting breaking FA rules by placing bets on 1,260 football matches, and will be 36 years old by the time he is eligible to return, something he says is now unlikely.

The midfielder, who has been released by Burnley following his ban, says the FA are not equipped to handle the widespread problems that gambling represents for professional footballers or the rehabilitation that many need to reform.

"They've given me such a harsh sentence because they want to maintain to the world, to the people who buy TV rights, that this is a very high-integrity game here," he said. "People who work for betting companies have told me that's the key issue.

"The FA have no actual interest in [tackling] betting. And they can't solve the problem, especially when they've got Ladbrokes as a partner. Because the players are going, 'I'm not doing anything wrong.'

Barton maintains that he is not the only high-profile professional footballer to gamble frequently.

"I've been in dressing rooms with players, where they've a hundred grand staked on mad stuff," he said. "On one bet. Scary. A lot bet massive figures.

"I've seen players who've played in World Cups go out on the pitch and not get anywhere near as much of a buzz from that, or scoring goals, as from betting on the horses ...

"There are many ways to beat this system. This isn't a system difficult to beat ... One thing footballers have in common is they love betting. Because they're competitors."

Follow @ESPNFC on Twitter to keep up with the latest football updates.

Continued here:

Joey Barton: FA 'can't solve' English football's gambling problem - ESPN FC

Getty Images

The NFL usually wins in court. Except when it settles.

When it comes to the lawsuit filed by a youth charity against the league due to the relocation of a bowling event because of the NFLs gambling policy, the league settled.

Brent Schrotenboer of USA Today reports that the settlement happened Friday. The league has no comment, and the lawyer representing the plaintiff said simply that the matter has been resolved. Thats standard practice in the settlement of civil cases involving private entities; the party making the payment always asks for (and almost always receives) a confidentiality provision.

The case was set or trial on September 25, and the charity recently commenced an effort to secure sworn testimony from Commissioner Roger Goodell. Coincidentally (or not), the case has now gone away.

The group had planned to host a bowling event last year on property owned by a casino in Las Vegas, with the participation of NFL players. Citing a policy that makes far less sense now that the Raiders will be moving to Las Vegas, the charity moved the event to a smaller venue, incurring expenses and/or losing revenue.

Read the rest here:

NFL settles lawsuit with charity over gambling policy | ProFootballTalk - NBCSports.com

The Telangana cabinet today decided to issue four ordinances to amend existing acts.

One of these ordinances will amend the Gaming Act to ban online gambling, said deputy Chief Minister Kadiam Srihari after the cabinet meeting here.

Another ordinance will amend Record of Rights Act to ban registration of government lands in the name of private persons and effect cancellation of past illegal registrations of these lands, he said.

"Soon after the formation of Telangana, the CM had ordered police to crack down on clubs and other places which encourage gambling. But the government received complaints that people are now indulging in online gambling. We want to eliminate gambling in all forms. So the Gaming Act would be amended, banning online gambling. The cyber police will track online gambling and act against violators," Srihari said.

An ordinance amending the Preventive Detention Act is aimed at curbing the sale of spurious seeds and fertilisers, adulteration of food items and the use of fake educational certificates.

The fourth ordinance will amend the VAT Act, to enable it to be in force for six years after the GST roll-out to resolve pending VAT disputes.

Visit link:

Telangana To Issue Ordinance To Ban Online Gambling - Outlook India

NEW YORK DAILY NEWS

Updated: Friday, June 16, 2017, 5:26 PM

A terrified Boston restaurant worker flagged down cops Thursday morning in Queens and told them he had been kidnapped over a $50,000 gambling debt by men who threatened to chop off his fingers, sources said.

The 27-year-old man said he escaped their clutches by leaping out of a second-story window in Fresh Meadows and stealing a car, sources said.

Paul Chen, 37, the owner of the car, told the Daily News that he watched in shock as the shirtless man materialized and sped off in his mint green 2007 Toyota Yaris on 67th Ave. near 197th St. in Fresh Meadows about 10:15 a.m. Thursday.

I don't even know when he appeared, Chen said. It was just like out of nowhere and (woosh) in my car. Maybe he was just trying to hide from everyone. I don't know how he got in my car.

Chen, who works as an engineer for a company broadcasting NFL games, called 911.

Meanwhile about two miles east, the kidnapping victim, still in Chens car, flagged down cops near the Long Island Expressway and Bell Blvd. in Flushing and told them the scary tale.

He said the kidnappers threatened to cut off his fingers if he didn't pay back the money he had been loaned to gamble with, sources said.

Chens face crumpled in disbelief when told the man who stole his car was a kidnapping victim.

With his hand over his heart, he said the saving grace was that his baby son was not in the car at the time.

Most important is my family, he said. To be honest I would rather to die than live without my baby. My baby's only 9 months old. Being a father is your primary job.

He had left the keys in the ignition while loading laundry into his car outside his home. He was returning to the car with the second load when the car zoomed off.

It's like a movie. It's scary, he said. He was definitely speeding west. He was undressed, no shirt. I didn't see his pants. He was already in my car.

The car wasnt gone long.

"While I was writing a report I heard a women over the walkie talkie say 'I think I found his car.'"

The kidnapping victim was being loaded into an ambulance at the scene when cops brought him to retrieve it, Chen said.

The victim was taken to Queens Hospital.

Chen said he was unlikely to press charges.

Kidnapping in Boston? It's really scary, Chen said.

The only thing I can say is god bless him. There is nothing I can do. I hope he can recover soon.

Both the police and the FBI are investigating. The FBI did not return phone calls Friday.

Some of Chens neighbors were not surprised the victim was targeted.

If you're in gambling debt, it's obvious people would chase you, said Joe Cheng, 21. If the guy owes $50,000, he had it coming ... You kind of figure someone would be after him.

View original post here:

Boston man tells NYPD cops he was kidnapped over gambling debt ... - New York Daily News

Photo: Carol Kaliff / Hearst Connecticut Media

Andy Uhl, left, of Granby, and Natarhj Gosavi, of Simsbury have lunch at Bobby V's Restaurant and Sports Bar in Windsor Locks, Wednesday, June 14, 2017.

Andy Uhl, left, of Granby, and Natarhj Gosavi, of Simsbury have lunch at Bobby V's Restaurant and Sports Bar in Windsor Locks, Wednesday, June 14, 2017.

Patrons watch races and place bets in the Bradley Teletheater in Windsor Locks Wednesday, June 14, 2017.

Patrons watch races and place bets in the Bradley Teletheater in Windsor Locks Wednesday, June 14, 2017.

Rich Mastrangelo of Springfield, Mass., left, and Cliff Lane of East Windsor, follow the horse races at the Turf Club Restaurant At The Bradley Teletheater in Windsor Locks Wednesday, June 14, 2017.

Rich Mastrangelo of Springfield, Mass., left, and Cliff Lane of East Windsor, follow the horse races at the Turf Club Restaurant At The Bradley Teletheater in Windsor Locks Wednesday, June 14, 2017.

Patrons watch races and place bets in the Bradley Teletheater in Windsor Locks Wednesday, June 14, 2017.

Patrons watch races and place bets in the Bradley Teletheater in Windsor Locks Wednesday, June 14, 2017.

Patrons of the Bradley Teletheater in Windsor Locks, head to the teller window to place bets, Wednesday, June 14, 2017.

Patrons of the Bradley Teletheater in Windsor Locks, head to the teller window to place bets, Wednesday, June 14, 2017.

Bobby V's Restaurant and Sports Bar in Windsor Locks has an age restriction in the betting area. Photo Wednesday, June 14, 2017

Bobby V's Restaurant and Sports Bar in Windsor Locks has an age restriction in the betting area. Photo Wednesday, June 14, 2017

Wagering terminals are available to patrons of Bobby V's Restaurant and Sports Bar in Windsor Locks, Wednesday, June 14, 2017.

Wagering terminals are available to patrons of Bobby V's Restaurant and Sports Bar in Windsor Locks, Wednesday, June 14, 2017.

Patrons sit at the bar at Bobby V's Restaurant and Sports Bar in Windsor Locks ,Wednesday, June 14, 2017

Patrons sit at the bar at Bobby V's Restaurant and Sports Bar in Windsor Locks ,Wednesday, June 14, 2017

Patrons visit the Bradley Teletheater in Windsor Locks, Wednesday, June 14, 2017.

Patrons visit the Bradley Teletheater in Windsor Locks, Wednesday, June 14, 2017.

Rich Mastrangelo of Springfield, Mass., studies statistics on upcoming horse races at the Turf Club in Windsor Locks Wednesday, June 14, 2017.

Rich Mastrangelo of Springfield, Mass., studies statistics on upcoming horse races at the Turf Club in Windsor Locks Wednesday, June 14, 2017.

Patrons watch races and place bets in the Bradley Teletheater in Windsor Locks Wednesday, June 14, 2017.

Patrons watch races and place bets in the Bradley Teletheater in Windsor Locks Wednesday, June 14, 2017.

Rich Mastrangelo of Springfield, Mass., studies statistics on upcoming horse races at the Turf Club in Windsor Locks Wednesday, June 14, 2017.

Rich Mastrangelo of Springfield, Mass., studies statistics on upcoming horse races at the Turf Club in Windsor Locks Wednesday, June 14, 2017.

Patrons watch races and place bets in the Bradley Teletheater in Windsor Locks Wednesday, June 14, 2017.

Patrons watch races and place bets in the Bradley Teletheater in Windsor Locks Wednesday, June 14, 2017.

Bobby V's Restaurant and Sports Bar in Windsor Locks includes an OTB Teletheater. Photo Wed., June 14, 2017.

Bobby V's Restaurant and Sports Bar in Windsor Locks includes an OTB Teletheater. Photo Wed., June 14, 2017.

Bobby V's Restaurant and Sports Bar in Windsor Locks, Wednesday, June 14, 2017

Bobby V's Restaurant and Sports Bar in Windsor Locks, Wednesday, June 14, 2017

Gambling on a younger clientele

WINDSOR LOCKS - In 1946, a baker told a young Nick Chaclas not to get too interested in the horses.

This week, Chaclas was in his favorite betting carrel at the OTB Teletheater near Bradley International Airport, cheering with a pumping fist as the horses at Belmont Park cleared the final turn.

Then the 91-year-old World War II Navy veteran let out an expletive and turned away from the monitor.

What happened?

Nothing happened, Chaclas said with a laugh about his losing bet. He just died.

Chaclas didnt heed the bakers advice.

No, I didnt, did I? a smiling Chaclas said. I dont win too often, I can tell you, but I have been playing for 71 years and I havent got sick of it yet.

If Chaclas sounds like the quintessential off-track-betting patron, perhaps he is. But hes not the future of OTB.

Instead, the future of off-track betting in Connecticut is the new sports bar restaurant and OTB facility that opened Friday on Stamfords Atlantic Street - and a similar concept planned for downtown Danbury: a multi-generation place with upscale food, craft beers, scores of televised sports and off-track betting mixed in.

Not too many places have done what we have done to make OTB an entertainment destination, where you combine all these things in one property, says Ted Taylor, the president of Sportech Venues, which holds the exclusive OTB license in Connecticut.

Sportech, which has 16 OTB facilities statewide, believes it has found a growth formula in an industry that has been slow to engage the younger generation. The London-based company processes $13 billion in bets in 30 countries annually, and has recently invested $10 million to improve its facilities in Connecticut.

The wagering is just a piece of our overall DNA; we are evolving into food and beverage operator with wagering in our venues, said Paul Dionne, Sportechs director of marketing. We are not trying to hide it: If we are going to continue to do positive business in Connecticut, we need to be more than just horse-racing.

The state Legislature apparently agrees. Earlier this month, both houses passed legislation giving Sportech six more OTB licenses, for a total of 24.

The legislation, which is yet to be signed by the governor, is part of the changing gaming landscape in a state that is struggling with a $5 billion budget deficit over the next two years.

The state gets a 1.9 percent cut of every bet made at a Sportech OTB, or about $6 million annually. Local government gets its own 1.6 percent cut of every bet.

Stamford stands to get about $200,000 annually from the new Bobby Vs Restaurant & Sports Bar. In Danbury, where plans to open a similar venue have been set back by a lawsuit and a technical error during the approval process, the citys estimated annual share is $100,000.

The Danbury restaurant owner who has agreed to let Sportech spend $750,000 to transform his Ives Street eatery into a sports bar and wagering venue said the downtown entertainment district needs places that will attract crowds.

I had concerns initially about what type of concept this is, and how it is going to help the downtown, and what my average customer is going to look like coming in, said Tom Devine, owner of Two Steps Downtown Grille. I visited a couple of the Sportech facilities that are now high-end sports bars with gaming components, and the one in Stamford blew me away.

Stamford was built on the model developed in Windsor Locks - involving a partnership with former New York Mets manager Bobby Valentine and his restaurant business.

The Stamford venue boasts 200 high-definition screens, a family-friendly Bobby Vs restaurant on the first floor, and a 21-and-older sports bar and wagering venue on the second floor.

Taylor would not say where Sportech is looking to locate six more OTB venues in Connecticut. His priority is bringing the Danbury venue online first, he said.

Taylor added that the company is likely to invest first in existing venues such as Norwalk, where the food and drinks selection is limited to vending machines.

Betting on the future

The gaming landscape is changing. Nowhere is that clearer than in Windsor Locks, at the 38,000-square-foot facility where Sportech spent $4.5 million to create a Bobby Vs Restaurant and Sports Bar.

The restaurant portion of the building is a modern sports bar with 80 televisions and two dozen craft beers on tap. The dcor is bright. Middle-aged couples talk casually over cheeseburgers and salads.

The Teletheater portion of the building has a much older feel. Shaped like an auditorium with stadium-style seating, this is the part of the building where most of the betting happens. It has a 125 betting carrels - cubicle-like stations with monitors where men spread their race sheets for the best bets.

The wall they face is filled with large monitors featuring horse races, greyhound races, and a few jai alai matches. In the back of the Teletheater are a handful of tellers who take bets, although plenty of men use the betting machines beneath the race screens.

I am a handicapper par excellence, says Cliff Lane, 82, a retired salesman from East Windsor.

Hes kidding. He used to be a good handicapper.

You cant handicap these horses anymore - its impossible, Lane says with smile. What you have to do is bet the jockeys and the trainers.

So how is he doing so far?

The races havent started, so we are doing great, Lane says. We are in the hole about $30 counting programs and lunch.

Lane and his friend are among the retirees who make up the base of the sport.

This is the OTB old guard.

We look at this and we realize this cant be the future of our business, Dionne said during a recent tour of Windsor Locks. We want to bring better things than just a venue only for wagering.

The Danbury wager

Sportechs plans in Danbury are modest compared to those for Windsor Locks and Stamford, but the proposal has been set back by opposition and a technical error in the application.

Plans call for the conversion of Devines first floor into a restaurant and sports bar, with a separate entrance and an elevator to the 21-and-over second floor, where there will be a second bar and an off-track betting section.

Up to 20 betting carrels are planned in an atrium on the second floor, along with betting machines, a counter with two tellers, and restaurant seating for at least 80 people.

Some people may say that from a religious point of view, they are against gambling, and you cant argue too much with that, said Devine, who would lease the betting venue to Sportech. But when people talk about safety and you look at the scope of this project and the players that are involved, it just doesnt make sense.

Devine received approval from the citys Zoning Commission for the Sportech partnership. That cleared the way for him to seek final approval from the City Council.

But a businesswoman who just opened a caf downtown sued to overturn the zoning decision, arguing in part that there were technical errors in the application.

Specifically, Devines request for a zoning variance was not filed with Danburys clerk in advance of the public hearing as required. That means Devine will have to reapply for approval, a process that he has already begun.

This block has seen 55 places come and go in the time we have been here, Devine said. We need more draws to the downtown. A sports bar would do that.

rryser@newstimes.com; 203-731-3342

Original post:

Gambling on a younger clientele - NewsTimes - Danbury News Times

Subscribers to the Mortgage REIT Forum received early access to this report.

Capstead Mortgage Corporation (NYSE:CMO) is overvalued. While I believe the preferred shares are a great bargain, the same cannot be said about the common stock. CMO trades extremely close to the lowest dividend yield on record and at a much higher-than-normal price-to-book ratio. While management is excellent, the team is facing macroeconomic problems. There is very little management can do to combat these problems. It isn't a matter of skill; it is a matter of the yield curve. As CMO faces these challenges, despite all the problems, the stock rallies back toward the highest levels seen in years. This is a case of high risk and limited reward.

The Dividend Yield

This might seem incredibly simplistic compared to much of my analysis, but sometimes the truth is staring us in the face. We need only to recognize it and accept it. The following chart shows the price and dividend yield over the last few years:

I had a buy rating on the common shares and established a position at the point identified by the green line. The rating was shared with subscribers first, but I brought out the public strong buy rating on October 24th, 2016. At the time, my analysis was focused heavily on the discount to book value. CMO was severely out of favor with analysts and investors. The premise for their bearishness was the collapsing net interest spreads. Ironically, that is precisely the argument I am making today.

The price is back to where it was about two years ago, when it started a fierce decline. The dividend yield on the other hand is only 8.33%, much lower than it was before. When we see the same price with a lower dividend yield, it reflects a lower dividend rate. CMO has been forced to cut its dividend due to the impact of both expected prepayments and actual prepayments.

Yields, Spreads, and Amortization

In the future, I want to put together a little series diving through the fundamentals of how CMO works. I think many investors today don't fully understand the mREIT. In the following slide, from its Q1 2017 presentation, I'm highlighting the yield on assets, the financing spreads, and the amortization. Don't worry; I'll explain each of those. For investors who want to access older presentations, use the index of presentations.

Here we go:

The most recent data is on the left and the oldest data is on the right. In the green, you can see the yield on all interest-earning assets was 1.67%. This is the highest level reported since Q1 2016. If it were a mere 3 basis points higher, it would be higher than any seen in the last two years.

On the third line down, you can see the finance spread. That is the yield on assets minus the cost of borrowing. That is trending higher because the Federal Reserve is raising the rate on short-term borrowings by offering to pay banks more interest on excess reserves. Those are payments made to banks to compensate them for not doing their job (lending money). When the Federal Reserve raises the short-term rate, the mortgage REITs must pay a higher rate to remain competitive.

So why hasn't the cost risen faster? Simple. CMO hedges out a material portion of its exposure.

So that leaves investors wondering: If CMO hedged part of its exposure to rising rates, why is there a problem?

The problem is that spread of .68 (from line 3) is not sustainable. The strength of the spread actually comes from the red box. That is the impact of premium amortization on the spreads. CMO is buying adjustable rate mortgages and paying more than par value for them. That is perfectly normal. Because it pays more than par value, say $102.50 for a mortgage with a balance of $100.00, it has to recognize the cost of that extra $2.50 over the life of the loan. If CMO didn't have to recognize that expense, the yield on assets would be 2.60%. That is shown one line above the red box. In the first quarter, CMO reported the lowest value of the last four quarters for this expense. It was reducing asset yields from 2.60% to 1.67%. This is referred to as 93 basis points. In the prior three quarters this ran 105, 106, and 96 basis points respectively.

I am convinced this expense will increase materially for Q2, Q3, and probably Q4 of 2017 compared to the values reported for Q1 2017.

Why Will Amortization Charges Increase?

The problem comes down to how quickly prepayments are coming in. We are entering a period where prepayments should be elevated. You're probably aware that short-term rates are increasing, right? How many homeowners do you recall talking to who are completely clueless about short-term rates increasing? At this point, I think it is fairly common knowledge.

That makes it less appealing to have an adjustable-rate mortgage. Homeowners who currently have those loans outstanding have an incentive to refinance into a fixed-rate mortgage. When that happens, the owner of the adjustable rate (such as CMO) is forced to eat the loss on paying more than $100 for the loan and then getting the $100 from the homeowner.

The yield curve is exceptionally flat right now. The rates on new fixed-rate mortgages are heavily correlated to the medium duration Treasury securities such as the 10-year Treasury. Consequently, homeowners with adjustable-rate mortgages should be receiving calls from their banks or credit unions offering to help them refinance into a new loan. It is in the banks' best interest to do that, because after they make the new loan, they can spin around and sell it off for somewhere around $102 to $105 per $100 on the loan. The buyer of the loan has to amortize that premium over time, but for the bank, it is immediate profits.

Therefore, I expect prepayments to increase. When the prepayments increase, I expect amortization charges to increase. Even though the gross asset yield, last seen at 2.6% should continue to climb, I expect the higher amortization charges to offset a material part of that growth. Consequently, I don't believe the "yield on all interest-earning assets" will increase much beyond 1.67% on average (remember, this is the green box at the top of the chart).

Because the higher amortization expenses should keep a lid on the yield on all interest-earning assets, even a slow growth in the cost of financing should be enough to eat into the net interest spread. Over the last year, the cost of financing increased 12 basis points. I think that is a reasonable projection for the next 12 months as well. Without the hedges, this could easily be 25 to 50 basis points.

If we see asset yields running roughly flat at 1.67% due to higher amortization charges offsetting growth in the gross yields, a 12 basis point increase in the cost of financing would chop their spread from .68 to .56. That would be a 17% decline in the net interest spread income, assuming the leverage remains steady.

What happens when that spread gets compressed? Dividends get chopped:

Rating on CMO's Common Stock = Sell

I see the potential pressure on the net interest spread as a major consideration for investors going into CMO. I was able to find value despite the issues when the yield curve was steeper and the company traded around $9.30 rather than $10.98. Now we are looking at a scenario where amortization expenses are more likely to go higher and net interest spreads are more likely to be compressed. Despite these challenges, the stock rallied significantly. This is a great time for investors to be harvesting gains. I know the ex-dividend date is almost here and some investors may feel inclined to hold on. Perhaps the market will ignore these problems for months longer, but I wouldn't want to play that game. There is far too much downside risk. I view CMO as a clear sell at this point.

Alternative

My concerns about CMO extend to other mortgage REITs in the same space. The adjustable-rate mortgages can be a great investment strategy, but they suffer when the yield curve flattens out and prepayments rise due to homeowners refinancing. As an alternative, I suggest (and own) shares of CMO-E. CMO-E is an excellent yield investment. Unlike CMO, there are no dividend reductions on CMO-E. When the yield curve flattens and net interest spreads decline, it doesn't impact CMO-E. The dividend yield on CMO-E is running about 7.6%, which is right around where it normally trades. Note: CMO-E traded up since I published this for subscribers. The stripped yield is now 7.5%.

An investor going from CMO to CMO-E would usually have to give up at least a couple hundred basis points in dividend yield. With CMO only yielding 7.65% and very little chance of an increase, the spread between the two is much smaller. If we use "current yield", which ignores dividend accrual, the yields would be 7.65% on the common and 7.36% (rather than 7.5%) on the preferred shares. This is a spread of only 29 basis points. It is easily the smallest spread I've seen between the common and preferred shares for CMO at any point.

Investors deciding between the two should consider the price volatility as one measure of risk. The following Google chart demonstrates it quite clearly:

Conclusion

Is the extra volatility in price worth it for an extra 29 basis points of yield? Is it worth the risk that dividends could still get pressured by amortization expenses while the Federal Reserve drives up the cost of borrowing on short-term loans? Picking winners on a consistent basis relies on finding less volatile opportunities where prices are steady and yields are high. At this point, the yield spread is exceptionally small and the price risk built into CMO is exceptionally high.

Want SMS alerts when I find an actionable opportunity? They are a free service for subscribers to The Mortgage REIT Forum. This is your opportunity to lock in prices at $330 per year before the next price increase on July 1st, 2017. These preferred shares are offering high yields and dramatically lower volatility than investing in the common shares.

Disclosure: I am/we are long CMO-E.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: No financial advice.

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Stop Gambling On A 7.66% Yield When The 7.51% Offers Less Risk - Seeking Alpha

A nonprofit whose charity event was forced to relocate by the NFL recently asked a judge to demand league commissioner Roger Goodell explain the league's gambling policy.(Photo: Paul Beaty, AP)

The NFL has reached a settlement with a youth charity that sued the league for fraud over how the league enforced its gambling policy at a casino near Las Vegas in 2015.

Terms of the settlement were not disclosed. But the agreement to closethe federal court case comesabout a week after the charity asked a federal judge to compel NFL Commissioner Roger Goodell to testify under oath about the leagues gambling policy.

It also comes just a few days after USA TODAY Sports reported on the prospect of Goodells testimony as the league finds itself in an increasingly conflicted position about casinos and gambling.

All I am at liberty to say is that the case has settled, Julie Pettit, an attorney for the charity, told USA TODAY Sports Friday.

The Sept. 25 trial date for the case was terminated on Friday as a result. The NFL declined comment.

The charity, Strikes for Kids, sued the league last year, saying it was misled by the league and lost revenue after being forced to relocate a bowling event for kids in 2015. More than 100 boys and girls were invited to the event at a bowling alley that was to feature more than 25 NFL players as the star attraction.

The problem was the location, according to the NFL. The event originally was to take place at a 72-lane bowling alley inside the Sunset Station hotel and casino. Before the event took place, an NFL lawyer notified the charity that this would violate the leagues gambling policy, which forbids players and personnel from making promotional appearances at casinos.

In response, the charity moved to the Brooklyn Bowl, a bowling alley with only 16 lanes available but physically not located inside a casino building. The NFL said this location was OK even though it was still part of the LINQ casino promenade near the Las Vegas strip.

To push its case, the charity wanted to question Goodell about why one casino-related bowling alley was OK but the other was not. It said it lost money and sponsors because it was forced to move to a smaller venue.

There's only one person that can tell us what's the difference between the non-approved venue and the approved venue (Goodell), Pettit told a federal magistrate judge last month. And he's this Oz behind the curtain, this person that the NFL will not allow us to talk to. And everyone points their finger at him, saying he's the only one that can make that determination.

The magistrate judge denied the charitys request to force Goodell to testify, but the charity filed objections to that decision last week and tried again with a different judge a decision that was pending until the settlement.

It was the latest legal entanglement the NFL found itself in over its gambling policy. Even after the league recently approved the relocation of the Oakland Raiders to the casino capital of Las Vegas, the policy shows the league is still invested in the notion that casinos are forbidden places for its players and personnel.

In 2015, Pettits firm also sued the league on behalf of a fantasy football company affiliated with former Dallas Cowboys quarterback Tony Romo. In that case, the company was set to a stage a fantasy football event at a convention facility that was not inside a casino but was near one, the Venetian, and owned by a casino company, the Las Vegas Sands.

Citing its gambling policy, the NFL essentially forbid Romo and others from appearing at this event, forcing its cancellation.

The NFL said it had the right to do so under its collective bargaining agreement with players. A judge in Texas agreed last year and threw the case out. But the company appealed, and that case is still pending.

In another case, outside of court, the league recently confirmed it was still reviewing a decision about what to do about players appearing at an arm-wrestling event at a Las Vegas casino in April.

While the leagues gambling policy prohibits players and personnel from making promotional appearances at casinos, teams are allowed to accept limited advertising from certain casinos. The Arizona Cardinals also recently has had discussions with a casino company, Gila River Gaming Enterprises, about the possibility of the company buying naming rights to the teams stadium.

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NFL reaches settlement with charity over gambling policy - USA TODAY

A small Casper pet shelter prevailed this week in its quest to loosen restrictions on the gambling it uses to fund its operations, sparking a debate at Tuesdays City Council meeting on whether local government should be in the business of regulating morals.

For several years, the Pet Ring Foundation has raised money from a handful of gambling machines at a storefront along East Second Street.

But when executive director Preston Pilant tried to switch machine vendors, he learned that city zoning barred gambling at his shop because it was within 300 feet of a church.

Pilant said he had consulted with the police and City Attorneys Office before starting the gambling operation but hadnt thought to check with the zoning office.

We completely shut down, Pilant told Council.

That was a problem because the shelter was largely funded by the gaming revenue.

So Pilant approached Council earlier this year to ask that the city change the zoning rule barring gambling near churches. City staff began working on a solution, and on Tuesday, City Planner Craig Collins presented Council with five options:

reduce the current 300-foot distance restriction;

measure from building to building rather than from property lines;

eliminate the distance-based restriction on gambling in the C-2 zoning district, which Pilants operation is located in;

or remove the distance restriction on gambling in every zoning district.

Council members were largely sympathetic to Pilants plight.

Its a stupid law, said Councilman Shawn Johnson.

Councilwoman Amanda Huckabay defended Pilants work and said his shelter provided an essential service to Casperites.

Preston is a little bit psycho about animals, but he has helped out so many low-income and homeless people in this community, she said. If they have no place to keep their animal, Preston will take them in.

Collins also spoke against the current regulation, which bars gambling within 300 feet of both churches and schools, as measured from property line to property line.

He said the purpose of zoning was to ensure the buildings and activities in different neighborhoods were compatible.

Its not to make sure people are doing moral things on their property, Collins said. Im always hesitant to regulate moral issues because not everybodys morals are the same.

Councilman Dallas Laird said the fact that the Pet Rings gambling operation was active for years before the zoning issue shut them down was evidence that it posed no harm to the community.

This is probably going on all over and it doesnt matter, Laird said.

Lairds main concern was that Pilant had an old school bus, painted black, parked next to the shop. Pilant said it was intended to serve as a mobile spay-and-neuter clinic but that funds never emerged. He said the bus would be removed soon and offered it to Laird for free. Laird declined.

Pilant was unable to be reached for comment regarding what kind of gambling machines he would be using and when the operation most recently shut down.

Council agreed to eliminate the distance restriction in the C-2 zoning district and allow gambling in those areas without a special permit. Members will still need to vote on that decision at a future meeting.

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City Council to loosen Casper gambling restrictions to aid pet shelter - Casper Star-Tribune Online

Measures which would tighten restrictions on gambling advertising in Belgium are being called for by the countrys Justice Minister, Koen Geens.

The Belgium Gaming Commission (BGC) fully supports the proposed measures which would effectively ban gambling ads on TV before 8pm and completely block them during live sporting events in the country in Western Europe, according to Belgian news website nieuwsblad.be.

Going one step further, gambling advertisements that are permitted, but have been deemed to promote excessive gambling activity, will also be removed say BGC officials. However, what exactly defines excessive has yet to be decided.

Spokeswoman for the BGC, Marjolein De Paepe, reportedly told the Belgian news website, We already have the authority for it, but as long as there are no clear rules about what may or may not, we can hardly exert it.

Under the new proposals, banners that appear on screen during televised games and during half-time commercials would be banned. Also included would be the mandatory implementation of problem gambling warnings in marketing materials of operators as well as fines levied against operators found to be in breach of the new regulations.

Online gambling is now legal in over 20 countries and has been legal in Belgium since 2002. The regulation of the countrys online gambling market launched about six years ago. Under the 2009 Gambling Act, a company wishing to provide an online gambling service in Belgium must also possess a license for a land-based, brick-and-motor operation. And last year, legislation that makes online gambling services taxable under value added tax (VAT) laws was launched by Belgiums finance ministry.

According to the Gambling Insider report, figures recently published by the Belgian Association of Gaming Operators (BAGO) indicate that internationally licensed gambling sites are only utilized by 15 percent of Belgians. A number BAGO believes will increase by 35 percent if the newly proposed restrictions are imposed on Belgian licensed operators.

The new proposals were reportedly welcomed by Belgian Member of Parliament, Peter De Decker, who said, For tobacco advertising there are already strict rules and there are ethical standards around alcohol. So something had to happen around gambling. We must not be blind to the fact that more is being cast or for the misery that causes it to people who are hard at all.

Belgium tightens the reigns on gambling advertising was last modified: June 17th, 2017 by K Morrison

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Belgium tightens the reigns on gambling advertising - World Casino Directory