CR83-p56-Business 1:SJC-Casino Review 23/8/09 02:48 Page 1
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SECTION SPONSOR
Better July for City
of Dreams
The new Melco Crown
casino in Macau, City of
Dreams, saw a 36 per cent
increase in rolling chip
Business
volume in its second month,
compared to its first. Play
among VIPs in July reached
US$2.65bn (E1.84bn). Drop
at the mass-market table
games rose by a third to
$132bn (E916m) and 1.1m
NEWS
people visited the new
resort, about 37,000
people per day.
MGM Mirage Q2
WPTE
sells
losses better
up to
than expected
investment
group
Given MGM Mirage’s huge financial commitments amid the
pocketcash
worst recession ever seen in Las Vegas and the company’s drastic
WORLD POKER TOUR
rearrangement of its finances and sale of some of its assets, things
ENTERPRISES
could have been much worse in the first half of the year. One of the big name
poker operators, World
substantialvision Asian origin players taking watering $12.3bn (E8.54bn) in Poker Tour Enterprises, is
MGM MIRAGE advantage of lower prices and borrowings. At 30 June it had selling almost all its
the weaker dollar. $411m (E285m) in cash. assets to a new and
The world’s second biggest In the half-year revenue Murren continued: “Perhaps “substantial” Cypriot
casino operator MGM Mirage figures, the pattern was as important, we saw a more investment firm Gamynia
has reported net losses of repeated falling by 20.9 per stabilised - though still difficult for just over $9m
$212.6m (E147.6m) in the cent to $2.99bn (E2.08bn). The - operating environment in the (E6.3m) plus a
three months to the end of company made a net loss in the second quarter. Our operating percentage of future
June 2009, overturning a period of $107.4m (E74.6m) teams are focused on continu- revenues - between four
$113.1m (E78.5m) profit from a profit of $231.4m ing to sequentially increase and five per cent - from
recorded in the same period (E160.7m) in H1/2008. cash flow and our CityCenter the World Poker Tour
last year - and that excludes If there was a lack of activ- team is driving towards com- and Professional Poker
the contribution of TI which ity on the gaming floor that pletion and opening. We Tour brands.
the company sold in March. was more than made up for believe CityCenter will invigor- Gamynia has said it
Like all its competitors, by activity in the boardroom. ate the Las Vegas market and be will work with Hardway
MGM Mirage has suffered from The company managed to a key component of the future Investments to exploit
a lack of visitors and a lower secure funding to complete growth of MGM Mirage.” and develop the WPT
spend in the casinos. Revenues the CityCenter project and One of the biggest causes brands in order to
from casinos in Q2 were down to reorganise its significant for concern is the lack of con- Jim Murren, chairman and into the fourth quarter…It cer- maximise future revenue
nearly 16 per cent to $625.6m debt obligations. vention traffic - competitor
CEO of MGM Mirage
tainly is not going to be a quick opportunities.
(E434.3m) while revenues Jim Murren, chairman and Steve Wynn has recently been recovery either for Las Vegas or Under the deal, WPTE
from rooms were down almost CEO, said: “This has been a sharply critical of the Obama In a conference call about the for the market in general. What’s is selling its television
a third to $350.3m (E243.2m): monumental quarter for us, administration for apparently results, Murren said: “Right now, encouraging to us is the fact library and all
taking from food and beverage, as the significant capital discouraging companies from our mix is artificially skewed that it is recovering.” associated IP and rights
entertainment and retail were market transactions and arranging events in Las Vegas, towards tourists. We need to get The markets also have a lot but will retain all cash
all down commensurately. Total other corporate finance activ- especially during the reces- that mix back into balance.” to be happier about and reacted and cash equivalents,
net revenues were $1.49bn ities meaningfully improved sion. What was once a signifi- He added: “The operating accordingly, pushing the oper- securities etc.
(E1.03bn), down 21.6 per cent. our financial position.” cant income stream for MGM environment we think will ator’s share price up to around The money will not be
Baccarat was the only game The company has managed Mirage is more of a dribble now remain choppy in the near the $8 (E5.5) mark, up from distributed to
to have seen an increase - 17 to reduce its debt load in the with a projected shortfall of term. However, we see less than $6 (E4.1) of recent stockholders but will be
per cent in the quarter, reflect- last year by around $1.1bn 400,000 room bookings for extremely positive signs espe- months but well below the used instead to fund the
ing perhaps an increase in (E764m) leaving with a still eye- 2009 compared to 2008. cially as we go into 2010 or even $38.5 (E26.7) year high. purchase or
development of a non-
poker related business.
Steve Lipscomb,
Opportunities for Boyd despite profits fall
president and CEO of
WPTE, said: “The World
Poker Tour as a
standalone entity has
upsidedownside down, just over eight per cent on the figure dropped off by around 17 per struggled to find the
The Borgata in
BOYD GAMING
Atlantic City – still
same period in 2008. In the half- cent to $26.7m (E18.5m). appropriate place for its
holding its own
year, revenues were also down Paul Chakmak, COO of Boyd, stockholders in this fast
Operator of 16 casinos in six US about eight per cent to $857.8m commented: “Although conditions evolving market…We
states, Boyd Gaming has posted net (E595.5m). Locals casinos in Las in the Las Vegas locals market believe that Gamynia and
profits of $12.8m (E8.9m) for the Vegas were hardest hit, with rev- remained challenged, the rate of Hardway Investments are
three months to the end of June - enues down 16 per cent in Q2, but decline was consistent with the first uniquely positioned to
down 41 per cent on the same period the company’s venues in the Ameri- quarter and margins were stable. In join with our current
last year. While the quarter turned a can Midwest and South, collectively our Midwest and South region, inno- partners and guide the
profit, the first half saw the company its largest income generators, were vative marketing efforts and more brands to fulfil their
recording a loss of just over $1m bearing up well with a fall of less efficient operations contributed to potential in the global
(E694,000), however, that dramati- than a third of one per cent. consistent results and in downtown poker marketplace.”
cally shortened the $10.9m (E7.6m) Boyd is also the joint venture Las Vegas and Atlantic City, cost
loss from the first half of 2008. partner with MGM Mirage in the containment measures helped us
The company said that certain Borgata in Atlantic City, one of the posted growth in declining markets.”
pre-tax items, particularly an few venues in the city that has The company has been in pro-
interest expense related to the managed to maintain reasonable tracted talks with the troubled
acquisition of the Dania Jai-Alai business faced with the recession Station Casinos, now in Chapter 11,
facility in Florida last year, had a and competition from Pennsylvan- about taking on some or all of its
net effect of reducing profits after ian slots. It saw profits from its share assets. However, some analysts
tax by $4.8m (E3.3m). of the business rise by 4.5 per cent to believe that the price would be too
The company’s net revenues for $13.8m (E9.6m) in the second high for Boyd and the process too
the quarter were $422.9m (E293.6m) quarter, although the six-monthly costly in both time and resources.
56 September 2009 • businessnews
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