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In March, a flurry of regional, national and international authorities announced alleviation measures related to airport slots, and quickly extended them after the extent of the Covid-19 crisis became clear. Hong Kong’s Civil Aviation Department extended its slot waiver beyond the end of May to October, covering the whole season. In the context of airport coordination, a slot is an authorization to either take-off or land at a particular airport on a particular day during a specified time period. This authorization is for a planned aircraft operation and is distinct from air traffic control clearance or similar authorizations. The slot machines at the airport are currently owned & operated by The South Point Hotel & Casino. You would think the payback percentage is the same as at the casino itself. There have been a few big winners at the airport. Airport slots are required at many busy locations worldwide, and request formats differ depending on the destination. While the airport slot request process usually goes very smoothly, it’s important to be aware of procedural requirements and assorted airport slot nuances. Best practice is to operate within the approved slot times and deviations and avoid multiple airport slot changes.
By Dr. P.P.C. Haanappel, Emeritus Professor of Air and Space Law, Consultant
Regularly, Aeropolitical Updates reports on airport slot developments throughout the world. “Slots” is a complex subject. The following is an attempt to systemize the matter, at least legally.
Airport slots and other slots
An airport slot is an arrival or departure (runway) time allotted to a particular airline at a particular airport, for a particular season (summer or winter). It is the airline’s choice for which route the slot will be used. Not all airports are slot controlled, especially not the non congested ones. Airport slots presuppose the existence of landing rights, in international air transport whether pursuant to bilateral air transport / services agreements or to some other agreement between states in the sense of Articles 5 and 6 of the Chicago Convention on International Civil Aviation. In Europe, for instance, landing rights result from the supranational / multilateral EU, EEA, EU-CH, and ECAA Agreements. Thus, airport slots and landing rights are distinct: the latter must precede the former.
Airport slots are to be distinguished from Air Traffic Control (ATC) en route slots, the some 15 minute period within which a flight, on any given day, must begin and end the use of (congested) airways. In Europe, Eurocontrol’s Central Flow Management Unit (CFMU) is in charge of allocating these slots.
Note: airport slots are scheduling times; en route slots are actual times. Both are instruments to control congestion and to allocate the use of scarce resources, runways and airways.
Regulatory framework
From the 1960s onwards, IATA has been involved in scheduling procedures at airports, first to co-ordinate airline schedules to promote interlining, later, more importantly, to allocate (scarce) airport runway arrival and departure slots. The former Scheduling Procedures Guide (SPG) and Conferences (SPC) have been replaced by the Worldwide Slot Guidelines (WSG) and the biannual IATA Slot Conferences (SC).
Video slot machine games. The operation of the IATA slot allocation conferences for airports located in the EU, and by extension in the EEA, CH and ECAA, is somewhat modified by the applicability of the EU Slot Allocation Regulation 95/93 (as amended). In the US, where currently only three airports are slot controlled and another four slot monitored, the FAA participates in the IATA system for international flights. It should be recalled that slot allocation or monitoring is principally a self-regulatory airline activity, through its trade association IATA.
As mentioned earlier, however, in international air transport, slots presuppose governmentally granted traffic rights. Slots are an airline agreed modality to exercise governmentally granted traffic rights. ICAO has developed a number of model bilateral clauses on slot allocation, which are basically procedural in nature, in order to facilitate the process.
Ownership of slots
An often asked legal question is who owns airport slots? The answer to this question cannot be found in the above-mentioned IATA, EU, FAA, ICAO instruments. The answer, if any, depends on national legal systems, in particular national constitutional and property laws. Usually, the answer will be that the airport (operator) owns the slots. Alternatively, in other jurisdictions the answer will be that governments or airlines own the slots. The answer, however, is not that important. What is more important than the theoretical question as to ownership, is the practical question as to value of slots and whether they can be traded. There is no doubt that slots have an economic, pecuniary value, depending on their scarcity. The scarcer a slot, the higher the price for an airline that wishes to use it. In the initial allocation process, slots will normally be assigned free of charge.The legal question hereafter is whether an airline, holding a slot, can sell it to another airline: secondary slot trading.
Trading of slots
The same legal instruments, mentioned above, are also not crystal clear as to whether secondary slot trading is allowed. In Europe, slots may be exchanged by airlines, one for one. Whether this “exchange” may be for “value”, for “consideration”, by “onerous title” remains somewhat hazy. Common law courts have accepted the validity of secondary slot trading for pecuniary consideration more easily than continental courts. For already some ten years now, the EU Commission has favoured such slot trading, but this had not been laid down in formal legislation.
Slots and mergers / take-overs / alliances
In competition and antitrust law procedures for the approval of airline mergers, take-overs or alliances, national or EU authorities may also condition such approvals by requiring the applicant airlines to surrender slots on particular routes to other, sometimes new entrant carriers, so as to reduce the competition restricting effect of mergers, take-overs or alliances. Such conditioning is usually respected by the airlines involved and the slot allocation at the relevant airport(s) adjusted accordingly. Whether the effect of the slot surrender actually leads to increased competition in practice, is another matter.
Slots and bankruptcies
The more it is realized that slots have an economic, pecuniary value, the more they are used in bankruptcy proceedings as an asset upon which creditors can take recourse in the proceedings surrounding the bankruptcy of an airline. In the year 2017, the failure of Monarch Airlines (UK) and Air Berlin showed how their slots can be sold for value to competing airlines, thereby generating capital for creditors.
Airport systems, traffic distribution and local rules
Some cities or urban conglomerations have multiple airports in what is called: an airport system. Between such airports, local authorities may distribute traffic over the various airports by way of a traffic distribution rule, but, at least in Europe, such distribution may not be discriminatory, amongst other things, as to carrier identity or nationality.
Finally, within the (runway) slot allocation system, there may be local rules, only applicable to one airport or airport system. These rules are supplementary to the IATA and (inter)governmental ones. For instance, at Amsterdam Airport, in the autumn of 2017, a local rule was introduced to enable Russian all-cargo carrier AirBridgeCargo to continue flying notwithstanding the fact that it could not meet the normal rule that airlines must use at least 80 percent of their slots in any given season (summer or winter) if they do not wish to lose their historical precedence, that is claim on slots in the next corresponding season.
Dr. P.P.C. Haanappel, Emeritus Professor of Air and Space Law, Consultant
E-mail: [email protected]
Titan casino no deposit bonus. 19 January 2018
A new Chicago casino feasibility study projects that installing 500 slot machines at O’Hare and Midway airports could rake in $37 million annually. That is more than the amount generated at Las Vegas’ McCarran International Airport, which has almost triple the number of slots.
Union Gaming Analytics, a boutique investment bank and advisory firm that carried out the study, worked on the assumption that each Chicago terminal slot could bring in $200 per day. This would bring the annual gross revenue from the suggested 500 machines to about $36.5 million.
The study says that given the Chicago metro area is already well penetrated, in terms of gaming positions, a casino within the City of Chicago is unlikely to need all 4,000 slot machines to achieve optimal revenues.
“As such, greater total revenues and taxes would be achieved by [allocating] a few hundred slot machines to Midway and O’Hare airports,” the study says.
Outperforming Las Vegas Airports
In drawing up revenue assumptions, Union Gaming Analytics studied airports in Nevada, the only comparable market with slot machines within the airport. Nevada’s two largest airports, McCarran in Las Vegas and Reno Tahoe, currently operate 1,475 and 240 slots, respectively, or approximately one slot machine per 15,700 arriving passengers, Union Gaming Analytics’ study says.
The researchers said Nevada provided a proxy for the potential performance of slot machines at Midway and O’Hare. The study then says it is expected that slot machines at airports in Chicago would be used similarly to those in Nevada, namely as an option for some travelers to pass time.
Ultimately, the study concluded, slot machines at Chicago airports should perform notably better than those in Nevada’s airports.
Union Gaming Analytics said they expected slot machines to perform better in Chicago than in Nevada because in the latter, there was low utilization of slot machines which led to low revenues. This was because visitors to Las Vegas would rather play at a full-fledged casino with more attractive gaming options than at the airport.
The report further postulates that departing passengers from Las Vegas would typically have already exhausted their gaming budgets, and local residents using the airport have more convenient gaming options available to them.
To buttress the above points, the study found that revenue from slot machines at the Nevada airports generated revenue well below the state’s average of $151 taken from gamblers daily at each machine.
Airport Slot Rules
“With respect to Chicago, slot machines at airports should hold greater appeal to these same three categories, especially when contemplating departing and/or connecting passengers – both domestic and international – as they are a captive audience,” the study said.
O’Hare was ranked as the nation’s busiest airport in 2018. The Chicago Sun Times reported that nearly 40 million commercial travelers passed through O’Hare in 2018, compared to 23.7 million at McCarran and 2 million at Reno-Tahoe. Nearly 10.7 million people flew to or from Midway.
Having slot machines at the airports is quite a tantalizing prospect, with Michael Wenz, an economics professor at Northeastern Illinois University, being quoted by Casino.org saying “airport slot machines seem like a very well-targeted way to raise gambling tax revenue.”
Wenz added that many of the punters will be non-residents, “and relative to a casino or the small slot machine parlors, it isn’t likely that the airport will increase the incidence of problem gaming. There is a possibility that this will cannibalize some of the other revenues from the airport, but the net effect on tax revenues should be very positive in any case.”
Casino could be onerous from tax perspective
Although this may be good news for punters in Chicago, the Union Gaming Analytics report also has some bad news. The report says a casino in Chicago may not be as financially feasible as initially estimated.
The gaming expansion legislation that allows for a casino in the City of Chicago is “very onerous
from a tax and fee perspective”, the report said.
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The study further says Illinois law, which allows for massive gambling expansion, features the highest effective gaming tax and fee structure in the country. The legislation, therefore, makes it difficult to finance a Chicago casino and generate profits.
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Chicago Mayor Lori Lightfoot has since said they would re-examine the 72 percent effective tax rate.
Lightfoot said the study confirmed concerns about the tax structure passed by the legislature, but was optimistic this could be addressed.
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“We look forward to working with the governor and legislative leaders to revise the legislation and ensure a new casino will be beneficial for Chicago’s communities and the entire state,” Lightfoot said in a statement following the release of the feasibility study.
The City of Chicago hopes a casino will help generate revenue to pay for the underfunded police and firefighter pension systems. The City of Chicago also forecasts that a Chicago casino will create thousands of jobs as well as contracting opportunities for the community.
The City of Chicago hopes a casino will help generate revenue to pay for the underfunded police and firefighter pension systems. The City of Chicago also forecasts that a Chicago casino will create thousands of jobs as well as contracting opportunities for the community.
Gaming capital of the Midwest
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Earlier this year, Illinois Governor J.B. Pritzker approved a new law that increased the number of state-sponsored gambling “positions” — seats to place a bet inside a casino, bar or racetrack — from almost 44,000 to nearly 80,000. It is projected that within two years, Illinois could have more than 7,000 video gambling establishments, 5,000 lottery-like sports betting kiosk locations, 16 casinos, five racinos and online sports gambling accessible on millions of mobile phones.
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The new law allows for video slot and poker machines at Chicago’s airports, O’Hare and Midway.
With the law expanding gambling in Illinois, the state is on its way to being the gambling capital of the Midwest.
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The state has set aside $6.8 billion in this year’s budget to help residents cope with gambling addiction. This is a 750 percent jump from the $800,000 that Illinois had regularly set aside to help people with gambling addictions, Healthcare Weekly reported.
Previously, Illinois faced criticism that it was not doing enough to help people with gambling addictions.