STANLEY AND SHELDON'S EXCELLENT ADVENTURETensions 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.
The travel restrictions exacerbated the damage from last year’s financial meltdown on Wall Street and the ensuing recession. As consumers cut back, revenues have faltered in gambling markets worldwide, notably in Las Vegas, where LVS also has a major presence. The company has since had to postpone development of a $12 billion complex of resort hotels surrounding Venetian Macao.
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 TOURThe 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 2008Melco 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 SIKKIMThe 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 PERCENTIn 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 IMPROVEMENTOfficial 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 VIETNAMDevelopers 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.