July 1, 2010
GENTING HAS BIG EYES FOR CASINOS IN U.S.
Debt-free and armed with $1.7 billion in cash, the casino arm of Malaysian conglomerate Genting is looking for action in the United States.
Fresh off the opening of its $4.7 billion Resorts World Sentosa in Singapore, the company “is aggressively searching for opportunities to invest in the U.S. casino gaming market,” Justin Leong, head of strategic investments and corporate affairs at the parent company, said in a recent interview with Bloomberg.
“Our strategy,” he said, “is building a U.S. presence.”
Genting last month weighed into the New York City market with a bid to operate a proposed 4,500-slot machine racino at Aqueduct.
Last year, it bought $100 million of MGM Mirage’s secured paper at a time when the Las Vegas Strip giant appeared to be teetering on the edge of a Chapter 11 filing.
Genting has held investment talks with other large U.S. casino companies dating back to December 2008, Leong said.
“I wish I had worked faster and done something sooner.”
Leong, who joined the company in 2004 after a stint at Goldman Sachs, is a nephew of Genting Chairman and Chief Executive Officer Lim Kok Thay and a grandson of founder Lim Goh Tong.
The family’s closely held Kien Huat Realty was a financier of Foxwoods Resort Casino back in the early ’90s and also holds 50 percent of Empire Resorts, owner of Monticello Casino & Raceway in New York’s Catskills Mountains. In May, the company partnered with the Mashpee Wampanoag Tribe to finance a proposed casino in Massachusetts.
In its home base of Malaysia, Genting’s gambling and leisure holdings include Casino de Genting in the Genting Highlands mountaintop resort outside Kuala Lumpur. The company also owns Star Cruises and Norwegian Cruise Lines. In February, an affiliate opened Resorts World Sentosa, complete with a Universal Studios theme park, as the first of Singapore’s two casino megaresorts.
The company also is an investor in the Philippines and owns the largest casino operator in the UK, Stanley Leisure.
A UNIQUE AGREEMENT: BARONA AND LVS WILL SHARE PLAYERS
Southern California’s Barona Resort & Casino is partnering with Las Vegas Sands on a unique joint-marketing effort.
Under the agreement, select players at Barona and at LVS’ Venetian and Palazzo resorts on the Las Vegas Strip will be eligible to receive reciprocal complimentary hotel, dining and gaming deals.
“Our frequent casino guests occasionally want the Las Vegas experience and their gamblers occasionally want the San Diego experience,” said Barona’s General Manager Rick Salinas.
To protect their respective customer lists, the partnership is contracting with a third-party company to send four mailings between now and the end of the year. Two will go to Barona customers offering hotel stays and other amenities at Venetian and Palazzo. The other two will go to the two Strip casinos offering them the same at Barona.
“We’re not actually sharing the data bases,” Salinas said.
Barona, located on reservation land in Lakeside, near San Diego, is owned by the Barona Indian Tribe.
ISLE TURNS PROFIT WITH STRONG Q4
Isle of Capri Casinos said fourth-quarter net income fell 66 percent, but the surprise profit was still far better than the loss expected by analysts.
Isle earned net income of $4.9 million, or 15 cents per share, for the three months that ended April 25. That compares to net income of $14.6 million, or 46 cents per share, for the same period last year, when Isle of Capri posted a gain of $57.7 million on the extinguishment of debt.
Net revenue, which excludes promotional allowances from total revenue, fell more than 5 percent to $268.8 million, down from $284.6 million.
Still, the results topped estimates. Analysts surveyed by Thomson Reuters expected Isle of Capri to post a loss of 8 cents per share with revenue $260.3 million.
For the full year, the company that owns and runs 14 casinos in Mississippi, Louisiana, Iowa, Missouri, Colorado and Florida, posted a loss of $3.3 million, or 10 cents per share. That compares to prior-year net income of $43.6 million, or $1.39 per share.
Net revenue fell nearly 10 percent to $999.8 million, down from $1.11 billion in the 2009 fiscal year.
LONG ISLAND TRIBE CLOSER TO A CASINO
The Shinnecock Indians have received formal recognition from the U.S. government, putting the tiny band closer to owning a casino somewhere on Long Island and very possibly in the environs of New York City.
“This is the most historic moment in Shinnecock history,” trustee Lance Gumbs told The Associated Press in an interview from the tribe’s 1,200-acre reservation in Southampton, L.I., where about 500 members live in proximity to some of the most expensive real estate in the world, home to Wall Street moguls and Hollywood celebrities.
Gumbs said, “Any discussion of a casino is a secondary thought.” But the Shinnecocks have been seeking federal recognition for decades, at one point trying to circumvent the approval process in federal court, but a judge rejected that effort in 2007. In 2003 the tribe broke ground on a casino only to get sued by local officials, who were granted a federal injunction to stop the development.
N.Y. Gov. David Paterson told AP he supported federal recognition for the tribe, which has long been recognized at the state level. To operate full-scale casino-style gambling federal law requires a compact between a tribe and its respective state spelling out the parameters of the operation. New York desperately needs the money that would come from a revenue-sharing agreement, similar to a tax on gambling win, the state is likely to require from such a compact.
State approval also will be needed for the Shinnecocks to operate their casino somewhere other than on their recognized reservation, which may be considered too remote and is likely to encounter local opposition. Paterson said he is open to negotiating with them for a more suitable site. Several have been bandied about, including Belmont Park racetrack in Queens and Nassau Coliseum.
Did you enjoy this article? Click here to subscribe to the magazine.