December 1, 2010
MELCO CROWN POSTS LONG-AWAITED PROFIT
Melco Crown Entertainment beat analysts’ estimates and posted a profit a US$15.8 million profit in the third quarter on its two Macau casinos.
The joint venture between Australian billionaire James Packer and Lawrence Ho, son of Macau casino tycoon Stanley Ho, also reported that its City of Dreams megaresort has boosted its share of the gambling boom under way in the Chinese casino enclave.
The profit, the first in 10 quarters for Melco Crown, worked out to 3 cents a share, compared with a loss of $39.5 million, or 8 cents, a year earlier. Analysts had predicted a loss of 1 cent per share.
Adjusted earnings before interest, taxes, depreciation and amortization more than doubled to $136.3 million, beating the $100.1 million analysts expected.
Casino revenue in Macau jumped 59 percent in the first 10 months of the year to US$19 billion, according to government data, and continues to track the heady growth of China’s economy, which is expected to expand by 10 percent this year.
“We have turned the corner in being able to more consistently deliver solid quarterly results,” Ho said. “Macau is firing on all cylinders, and we are fully participating in this growth. In fact we are taking share.”
TRAVELLERS SELLS BONDS TO EXPAND IN THE PHILIPPINES
Travellers International Hotel Group, owner and operator of Resorts World Manila, has raised US$300 million from a sale of unsecured seven-year notes to fund more casino and entertainment projects in the Philippines.
Buyers came from a global mix of mostly public and private banks, fund managers and insurance companies.
“We are very pleased with the strong support from the investor community on our inaugural bond issue.” said David Chua, chief executive of Travellers, which is a joint venture between Andrew Tan’s Alliance Global Group and Genting Hong Kong.
GTECH AWARDED CONTRACT FOR SHENZHEN LOTTERY
Lottomatica subsidiary GTECH Global Services has been awarded a 10-year contract by China’s Shenzhen Welfare Lottery Centre to upgrade an existing keno betting system and launch online lottery sales.
The contract also calls for the rollout of 1,500 lottery terminals and includes software, operations and marketing services.
The new online system is expected to go live in May 2011.
“We are pleased to have this opportunity to increase the range of lottery solutions and services we provide to Shenzhen Welfare Lottery Issuing Center,” said GTECH President and CEO Jaymin B. Patel. “This deeper relationship in Shenzhen is strategically important for GTECH as we look to further expand our footprint in China.”
AUSSIE GOVERNMENT UNDER PRESSURE TO REIN IN POKIES
Independent Representative Andrew Wilkie has warned he will withdraw his support for Australia’s Labor Government if it fails to abide by an agreement to introduce new technology to enable pokie players to set binding limits on their losses.
Clubs and hotels strongly oppose the change, saying it will trigger industry-wide job losses and huge revenue cuts for state governments. But Wilkie, who helped Labor secure a second term with an agreement to limit machine gambling in the country, said the reform was not negotiable.
Labor holds a single-seat majority in the House of Representatives so Wilkie’s vote is critical.
Under the agreement to win his support the government promised to introduce a “best practice, full pre-commitment scheme” across all states and territories by 2014. That means players will be asked to set a limit on how much money, and possibly time, they want to spend at the games, with an option to choose not to set a limit at all. The limits will be enforced using identification technology, most likely involving the use of smart cards.
Economic modeling commissioned by Clubs Australia concludes it would cost A$134 million to retrofit the new technology on Victoria’s 26,762 gaming machines in clubs and pubs, excluding Crown Casino.
Using information from Norway, the only country to have introduced a mandatory pre-commitment system, the industry says the Victorian government will lose $485 million in gambling tax revenue, compared with $285 million under a voluntary pre-commitment system that is supported by the industry.
The modeling also found the loss of revenue for pubs and clubs in Victoria would be $861 million in 2014, compared with $521 million under a voluntary system.
SAMOA PARLIAMENT APPROVES CASINOS
Samoa’s parliament has passed a bill to allow foreigners-only casinos in hotels.
The Gambling and Casino Control Bill passed on a third reading, but not without opposition.
MP Palusalue Fa’apo said he expects the government will eventually allow Samoans into the casinos when it realizes that foreign visitation won’t be enough to sustain the venues and generate the desired economic spinoffs.
The country’s two islands, situated in the South Pacific east of Australia, have a population of 182,265 and depend on agriculture, fishing and tourism.
“Most of the tourists come here to enjoy the green environment and also the beaches, they don’t come here especially to [gamble],” Fa’apo said. “So I’m predicting that when they don’t get any profits from these casino licenses they will eventually open up for any people in Samoa to play in the casinos.”
Fa’apo said he will work to block any casinos from opening by working to oust the government in next year’s general election.
AUSTRALIA A KEY TO MICE TRADE FOR VENETIAN MACAO
The Venetian Macao has opened an office in Sydney to attract convention and exhibition business to the property.
“We now have someone in market that knows the culture and understands the needs of our local clients,” Brendon Elliott, vice president of sales for The Venetian Macao, told MICEBTN magazine.
“The global recession affected MICE business throughout Asia and the rest of the world, but starting in early 2009 The Venetian Macao focused on strategies to target the markets and industries it believes yield the highest return,” Elliott said. “We are changing the way meetings and company incentives in Asia-Pacific are organized.”
Australia is currently The Venetian’s seventh-largest MICE market.
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