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CR79-p52&53-business1&2:SJC-Casino Review 19/4/09 01:13 Page 2
Empire may default on debt
The operator of the Monticello Gaming and Raceway
resort in Monticello, New York state, Empire Resorts, has
said it may not have the money to repay debts that are
maturing at the end of May and in July. The company
has said it is considering its options but that there is no
guarantee it will be able to find the necessary financing
given its losses and negative cash flow.
Melco International
Ng takes
plunges into the red
share in
Big losses in its
reach to the emerging multi- tiesthatbind
City of Dreams is
technology business scheduled to open in
night stay market and our AMAX ENTERTAINMENT
had a serious impact
early June
focus will be on the premium HOLDINGS
end of the mass market and
on Melco CIP customers from the The joint venture partner of
region,” said Ho. “With careful Amax in Macau’s Greek
results for 2008.
planning we were able to Mythology casino, Ng Man
secure sufficient funding for Sun, is set to become the
However, gaming,
the project before the finan- largest shareholder in
which is likely to
cial market meltdown. City Amax itself, after he agreed
become the
of Dreams is fully funded and to convert HK$400m
company’s major
on budget and will be the (E50.5m) of a HK$1.5bn
only new hotel and casino (E144m) promissory note
revenue stream as project to open in Macau in into 1bn shares of common
City of Dreams opens
2009. We have also developed stock. If shareholders ratify
in Macau, remains
a new brand for Crown the agreement, Ng will hold
strong, despite the
Macau to differentiate it from 27.5 per cent of Amax.
City of Dreams to make sure Ng will not hold a formal
downturn. the two projects each has its position within the
own distinct image.” company but will enter into
lossadjusted It has been reported that a “consultancy agreement”
MELCO INTERNATIONAL Ho has also said he would whereby he will offer his
consider in the future invest- advice on business devel-
Lawrence Ho’s holding ing in Las Vegas Sands assets opment for a nominal HK$1
company for most of his busi- in Macau, especially if City of annual fee. He will also
ness interests, Melco Interna- Dreams does well. He and offer the company the right
tional Development, has other operators are finding, it of first refusal for all gaming
recorded a loss of HK$2.36bn cent stake, added HK$33.1m seems, a new solidarity that or promotion investment
(E226m) for the 2008 finan- (E3.2m) to the bottom line, overcomes their natural com- opportunities in Macau
cial - the previous year the overturning a charge last year petitive instincts. made available to him.
company was in profit to the of HK$525.6m (E50.5m). “The six gaming conces- Brian Cheung, chairman
tune of HK$2.7bn (E259m). Lawrence Ho commented: sion holders in Macau met and acting CEO of Amax,
Much of the loss was attrib- “2008 was tough for all busi- recently to discuss industry commented: “Mr Ng is an
utable to one-off impairment nesses. Economies slipped issues, including a limit on established business
charges of HK$1.16bn into recession and the credit junket commissions,” said leader in the Macau gaming
(E111m) against subsidiary crunch put many businesses Ho. “Crown Macau, with its market, an existing partner
Elixir Gaming Technologies on the verge of bankruptcy. focus on rolling chip play, to Amax and maintains a
and Melco China Resorts. The extremely testing market should benefit from the pro- leading presence in the
However, there was a turn- environment has affected the posed commission cap.” Macau gaming promotion
around in the other direction leisure and entertainment He concluded: “We remain sector. [His] market pres-
from its casino operations in sector in the region and confident of the economic ence and experience would
Macau: Melco Crown Enter- inevitably Melco, a major prospects of Macau and its significantly strengthen the
tainment, which operates player in Macau. However, China will be among the almost quadruple - allow vicinity areas. Although the company’s operation exe-
the Crown Macau and is we believe the market will forces leading the recovery Melco Crown to just about market is feeling pressure cution, increase the effec-
shortly (in June) to open the bottom out in the end and of the global economy.” break even, despite the costs from various external condi- tiveness of our gaming
enormous City of Dreams improvement will follow. We Crown Macau, having and drains involved in the con- tions, it still boasts strong intermediary business
development on the Cotai remain confident of the secured the services of AMA struction of City of Dreams. attributes and potential as model and generate new
Strip, and in which Melco prospects of Macau and main- International as its junket “The opening of City of the most dynamic gaming avenues of potential
International has a 37.8 per land China and that mainland partner, saw annual revenues Dreams will expand our market in the world.” growth.”
Atlantic City casinos lost a billion in 2008
atlanticfloor of nearly 25 per cent to $14.5m (E10.7m) - turning
ATLANTIC CITY $940.9m (E695m). over an $8.2m (E6m) operat-
All but one of the venues ing profit in the previous
The combined annual results made a bottom-line loss, with year; Tropicana plunged from
for the 11 casinos in Atlantic Borgata managing to keep its a $51.8m operating profit in
City show the industry made a head well above water with 2007 to a loss of $10m
loss of more than $1bn last an $83.3m (E62.5m) net (E7.4m) in 2008.
year, according to figures profit, although this was 41 Linda Kassekert, chair of
released by the New Jersey per cent lower than in 2008. NJCCC, commented: “Last
Casino Control Commission The next best performer was year was a particularly chal-
(NJCCC). Trump Plaza, which made a lenging one for Atlantic City’s
Together the casinos saw $23.9m (E17.7m) loss, actu- casino industry. The decline
losses widen from $64.5m ally reducing a $40m (E29.5m) in revenues and gross operat-
(E47.6m) in 2007 to $1.05bn loss made in 2007. ing profits reflect the decline
(E776m) in 2008. Gaming rev- Worst hit was Caesars, in the overall economy as
enues fell by almost eight per which saw a huge loss of well as the continued
cent to just under $4.5bn $355.4m (E262.5m) after goodwill and other intangi- profit: in 2008 it reached of Two casinos made operat- increase in competition from
(E3.32bn), leading to a reduc- writing down more than bles. Like eight other venues, $79.8m (E59m) but this was ing losses last year: AC Hilton gaming operations in neigh-
tion in gross operating profit $374m (E276m) for loss of however, it made an operating 25 per cent down on 2007. was in deficit to the tune of bouring states.”
May 2009 • businessnews 53
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