Asia/Pacific
May 1, 2009
Ho
STANLEY AND SHELDON'S EXCELLENT ADVENTURE
Tensions
between Macau’s two most prominent casino
tycoons appear to have softened after a meeting last month in which they
reportedly agreed to a cease-fire in a competitive war that has intensified as
the global recession and travel restrictions on the mainland batter gambling
revenues.
Stanley Ho, 87,
chairman of SJM Holdings, which controls 18 of Macau’s 28 casinos, and Sheldon
Adelson, 75, chairman and CEO of Las Vegas Sands, the peninsula’s largest
foreign operator, will put a stop to raids on each other’s employees and also
will stop undercutting each other on the commission rates they pay to the
junket operators who bring in the high-rolling baccarat players from the
mainland and Hong Kong on whom the casinos depend for 70 percent of their
annual win.
The new spirit of
cooperation was capped by a meeting at Adelson’s Venetian Macao on April 14 in
which he and his rival shared a “warm and friendly” lunch, according to a Las
Vegas Sands spokesman.
“Everyone agreed not
to compete, to have enough rice to eat and to get more taxes for the
government,” said Ho, who held a monopoly on Macau gambling before the Chinese
government opened the market to competition with the end of Portuguese rule in
1999.
Ho said a follow-up
meeting would be held on May 18.
Macau’s casino
revenues grew 31 percent in 2008 to US$14 billion, but revenues started falling
quarter-to-quarter last summer after Beijing
curtailed individual visas for mainland residents in an effort to stem a wave
of gambling-related corruption scandals and business failures. The government
is particularly anxious over the possibility of sizable portions of its recent
US$586 billion economic stimulus package winding up in the hands of Macau’s
casinos and the junket operators who provide the credit China’s free-spending
gamblers demand.
Adelson
In the meantime, resentment against foreigners is on the rise in Macau. The tiny peninsula of less than 12 square miles and about 500,000 people has suffered considerable economic and social dislocation as a result of the roaring pace of casino development over the last five years. With local elections looming, the government has announced plans to reduce the foreign labor force by as much as half in 2009. Chinese operators have already begun culling foreigners from their management staffs, according to Destination Macau, an industry newsletter. It is believed the U.S.-based operators, LVS, Wynn Resorts and MGM Mirage, will come under pressure to do the same.
Sensing an opportunity, Ho began urging local businesses to “unite against foreign capital” and has called on Chinese gamblers to patronize only Chinese casinos.
Macau’s vaunted “casino king,” as he’s still known to locals, Ho recently was chosen to head its fledgling Casino Operators Association.
MORE DAYS, MORE EVENTS HIGHLIGHT SECOND YEAR OF ASIAN POKER TOUR
The Asian Poker Tour is expanding its offerings
for this summer’s APT Macau.
Rebranded as the Asian Poker Tour Macau Festival, the
event will be held at the Galaxy StarWorld Hotel and Casino and will last 12
days, six days longer than last year’s inaugural APT, which drew players from
more than 40 countries.
The 2009 Tour begins
August 12 and concludes August 23 and will include high-limit cash games,
sit-and-go action and a revamped lineup of preliminary events. The Main Event,
with a US$4,300 buy-in, begins August 19.
Last year’s winner
was 20-year-old Russian Yevgeny Timoshenko, who bested a field of prominent
international names — Doyle Brunson, Johnny Chan, John Juanda, Huck Seed, Kenny
Tran and Jack Binion among them — to claim the $500,000 first-place
prize.
Information is
available at asianpt.com.
MELCO HOLDING COMPANY LOSES $306M. IN 2008
Melco International Development, the Hong
Kong-listed gaming investment vehicle chaired by Lawrence Ho, recorded a net
loss last year of HK$2.36 billion.
The results were a far
cry from 2007, when the company posted a profit of HK$2.69 billion.
Melco attributed the
loss, equivalent to US$306 million under current exchange rates, to declining
local asset values stemming from the beating Hong Kong’s
Hang Seng Index has taken in the global economic downturn.
Falling values for Melco’s listed units resulted in the
company taking an impairment charge of HK$1.86 billion for the year. Value
Convergence, the financial-asset management unit, saw profits drop 85 percent.
Elixir, another prominent division, wrote off HK$220 million on a failed gaming
machine deal in Cambodia.
Ho is bullish on the prospects of his various holdings,
however. “The market will bottom out in the end and improvement will follow,”
he said.
His optimism will be put to the test next month
with the opening of his City of Dreams
megaresort on Macau’s Cotai strip. The US$2.1
billion project, developed with Australian tycoon James Packer, his partner in
Nasdaq-listed Melco Crown Entertainment, will contain 1,400 hotel rooms and
feature 500 table games and will be the joint venture’s second Macau casino.
FIRST LAND-BASED CASINO OPENS IN INDIA IN REMOTE STATE OF SIKKIM
The Indian state of Sikkim has launched a
foreigners-only casino, the first land-based gambling
venue of its kind on the subcontinent.
According to Inside Asian Gaming, the move is
designed to boost tourism, which has been increasing in the landlocked
Himalayan state at double-digit rates in recent years, and create employment
opportunities.
Sikkim,
which borders Tibet on the
north and Nepal in the west,
is the least populous of India’s
states and the only one with an ethnic Nepalese majority.
Casino Sikkim, as it’s
called, is located in the Royal Plaza Hotel in the capital of
Gangtok.
Casino gambling in India
has been limited to cruises off Goa and a
small number of slot machines in luxury
hotels.
SOUTH KOREA LOTTERY RESISTS DOWNTURN; SALES UP 12 PERCENT
In the face of the global economic slump,
lottery players turned out in force in South Korea in the first quarter,
boosting sales 12 percent over the same period last year to US$481
million.
The popular Lotto drove the improved results, increasing
12.8 percent to $47 million and offsetting declines in paper and Internet
sales, which declined 6.4 percent and 5.6 percent to $12.2 million and $9.1
million, respectively.
The credit crisis and
resulting recession has left South Korea’s
export-dependent economy, the fourth-largest in Asia,
particularly hard-hit. They have impacted domestic demand as well. The economy
is expected to shrink 2 percent this year, the first negative performance in
more than a decade.
MACAU CASINO REVENUE SHOWS IMPROVEMENT
Official
figures indicate that Macau’s first-quarter
gambling revenues jumped 8.1 percent over the previous quarter to reach US$3.26
billion.
The increase, reported by the government’s Gaming
Inspection and Coordination Bureau, comes after three straight quarters of
declines, precipitated by the twin blows of the global economic crisis and
travel restrictions imposed by the central government in
Beijing.
The results, hopeful as they appear, were down, however,
by 12.8 percent from the same period in 2008.
Following the same trend, in the all-important
market for high-end baccarat play, results were down 19.1 percent from the
first quarter of 2008 but up 7.8 percent from the fourth quarter.
FORMER CANADIAN PM JOINS DEVELOPERS OF MEGARESORT IN VIETNAM
Developers behind a planned US$4 billion-plus
gambling resort complex in Vietnam
have enlisted a big-name supporter in the person of former Canadian Prime
Minister Jean Chrétien.
The 75-year-old Chrétien, who headed Canada’s Liberal Government from 1993 to 2003,
has visited Vietnam
and met with government leaders on behalf of the Canadian company, Asian Coast
Development Ltd., that is approved to develop the massive Ho Tram Strip, as the
resort complex is known.
Quebec-born Chrétien,
a lawyer by profession, is a member of ACDL’s government relations team. He is
reported to have numerous other business interests
worldwide.
“Obviously, I think his strong relations with the
Vietnamese government officials, and [that he is] somebody who is a very
well-regarded individual, it’s been extremely helpful for us,” said Stephen
Shoemaker, president of Vancouver-based ACDL.
“He is well-respected,” said David Tsubouchi, a former
Conservative Party cabinet minister in Ontario
who also is working for the company.
As planned, Ho Tram will open in phases and
eventually will contain 9,000 rooms in five hotels and a Las Vegas-style casino
on 169 hectares of beachfront on the South China Sea.
Planned attractions include a 1,000-seat showroom, a spa, a Greg
Norman-designed golf course, a marina, more than 200,000 square feet of retail
space, convention and meeting facilities, and a large interactive aquarium.
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