March 1, 2010
Early line on Resorts World: Too early to tell
The early going
was a little bumpy for Singapore’s first casino, but owner Genting Singapore is
confident in its visitor projections, and the consensus among analysts seems to
be bullish as well.
As it stood last month, though, the company’s stock had turned in a dismal performance on the Straits Times Index, according to news reports, amid concerns that its S$6.6 billion (US$4.7 billion) Resorts World Sentosa was not drawing enough visitors
The casino, which opened February 14, had 60,000 patrons in its first three days, according to Resorts World — well below the daily turnout Hong Kong analyst Dominic Noel-Johnson of Citigroup said the property needs to meet “below consensus estimates”. He places that number at 34,000 visitors a day, each spending at least S$100 per trip.
“Expectations are in our view unrealistically bullish for a virgin casino market,” he said. “While a few days don’t constitute a trend, initial visitors to the Singapore casino are significantly below our estimates.”
Resorts World countered that it is confident that as a whole the “integrated resort,” as it is known, will attract 13 million visitors in the first year, which is the target stated by Chief Executive Officer Tan Hee Teck.
Analysts at BNP Paribas and CLSA Asia Pacific Markets said last month they were keeping their “Buy” ratings on Genting Singapore because the outlook will change as the company completes the resort’s remaining phases.
“We estimate between 11 million and 12 million people will visit the casino resort this year,” said Michael Greenalll, Kuala Lumpur-based analyst at BNP Paribas. “That looks achievable. More people will visit the resort once the Universal Studios theme park opens.”
The theme park is expected to open early this month.
When complete, Resorts World will contain 530 table games, 1,300 slot machines and a 12-table poker pit in the casino, plus the adjoining theme park and six hotels. Four of the hotels opened in January. Two more are scheduled to open after 2010.
The casino has had a good start, gauging from the $28.5 million in gaming revenue Asian Gaming Intelligence estimates it won in its first 36 hours.
Aaron Fischer, an analyst at CLSA Asia Pacific in Hong Kong, said, “Overall, it’s been strong, but we do not have enough data to determine the long-term success or failure of the casino.”
Resorts World’s only Singapore rival, Las Vegas Sands’ Marina Bay Sands integrated resort, is set to open in late April.
On a positive note, Resorts World has concluded an agreement with Singapore budget carrier Tiger Airways to lease a chartered aircraft to exclusively fly foreign guests to and from the property. The service is scheduled to start late this year.
Tiger operates flights to 33 destinations across 11 countries and territories in Asia and Australia from bases in Singapore, Melbourne and Adelaide.
INTERNET GAMBLING IN CHINA UNDER OFFICIAL ASSAULT
Eight Chinese government and Communist Party agencies, led by the Ministry of Public Security, the central bank and the Ministry of Information and Technology, are conducting a nationwide crackdown on online gambling, which the Public Security Ministry describes as “thriving”.
Online gambling “has caused large cash outflows from the country and seriously disturbed social and economic order,” said a statement posted on the ministry’s Web site and cited by the country’s Xinhua news agency.
The campaign aims to “bust a number of syndicates from home and abroad that collude to organise gambling activities on the Internet and severely punish the illegal rings,” the ministry said.
Underground banks and third-party payment platforms and Web operators offering connection services are also in the government’s cross-hairs.
“[We] will clean up gambling information and Web sites across the board,” the ministry said.
Joining in the sweep, which was launched last month and is expected to last through August, are the Supreme People’s Court, the Supreme People’s Procuratorate and the China Banking Regulatory Commission.
The crackdown is the latest in a series of steps the government has taken to strengthen its control over Internet use, which is expanding dramatically in China. The country is home to the world’s largest online population, at least 384 million users, according to official figures.
The government routinely censors the Web to curb what it considers socially “unhealthy” content — which includes pornography, violence and gambling — using a system known as the “Great Firewall of China”. Critics, however, claim the system aims mainly to prevent the posting of information that challenges the ruling Communist Party.
But the attack on Web gambling appears to be motivated in no small part by a widespread match-fixing scandal in Chinese football.
Nan Yong, executive vice president of the Chinese Football Association and director of the Chinese Soccer Administrative Center, has been fired after being held by police for questioning, according to Xinhua. Nan allegedly is involved in a number of cases closely linked to the CFA, according to China Daily.
CSAC Deputy Director Yan Yimin also was removed. Head of referees Zhang Jianqiang was questioned by police.
Four people were detained for suspected bribery last November, and more arrests were made in December, including two top officials of the Chengdu Blades, one of 12 teams belonging to the professional Chinese Super League, which is governed by the CFA.
IGT EXITING JAPAN: NO 'STRATEGIC FIT,' THE COMPANY SAYS
Citing “ongoing difficult market conditions and lack of strategic fit,” International Game Technology announced it is closing down its Japan operations.
The U.S.-based slot giant described the move as part of a “focus on operating efficiencies” and said it will be completed by the early part of the third quarter of fiscal 2010, which means April or May.
IGT currently estimates that charges, including severance, of up to US$20 million will be recorded in the second and third quarters of fiscal 2010.
SPORTECH, PLAYWIN TARGETING INDIA WITH BETTING SITE
UK-based football-pools operator Sportech has hooked up with one of India’s leading lottery operators, Playwin, to develop a sports betting Web site targeting the lucrative subcontinent.
The 50-50 deal calls for the partners to each pay £2 million in start-up costs ahead of a scheduled launch of the site this spring.
The site will offer a suite of prediction and fantasy games — centered initially around India’s most popular sports, which include cricket, football and Formula One auto racing — and will be promoted across Essel Group’s Zee TV network and online. Playwin is a subsidiary of Essel, a Mumbai-based conglomerate with holdings in media, technology, entertainment, packaging, infrastructure development and education.
London-based, publicly traded Sportech was formed through the acquisitions of British pools operators Littlewoods Gaming, Zetters and Vernons.
Sportech CEO Ian Penrose said of the new venture: “India has a huge population with a long history of being committed sports fans, and Playwin is ideal as a partner as it is already India’s premier gaming operator and enjoys significant brand strength.”
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