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CR88-p02&03-international:SJC-Casino Review 21/1/10 17:37 Page 1
Bustling Macau records record GGR
Macau finished a year of global economic woes in 2009 with
record gross gaming revenues of 119bn patacas, up 10 per
cent from the previous year. The recovery in the latter stages
of 2009 saw revenues in December surge 48 per cent year
on year to 11.4bn patacas. SJM Holdings, the hotel and
casino holding company of billionaire Stanley Ho, remains the
market leader with some 30 per cent of the market. In
December it opened Macau’s 34th casino with Casino
Oceanus at Jai Alai, pictured above. Sands China and Wynn
Macau control 23 per cent and 15 per cent, respectively.
Macau float masks
MGM Grand in Macau:
the 35-storey, 600-
room, 300 table, 1,000 looks for
MGM’s market
slot resort is MGM
Grand Paradise’s only
current venture.
The joint venture in Macau between MGM Mirage and
Mozambique, an independent
Pansy Ho has started the ball rolling towards a Hong Kong
African country on the east
coast, has approved new legis-
IPO by vetting investment banks on how much it could raise. lation to legalise online gaming,
With upwards of $500m being touted, any New Jersey
along with new measures to
awkwardness remaining on the Ho partnership is clearly
permit slot machines in non-
casino areas and permission for
being swept to one side. Phil Martin reports. casinos to be built anywhere in
the country.
chinainitshand existing casino could be MGM Grand Paradise also President Armando Guebuza
CHINA worth $5bn, and that the has the weakest market gave his seal of approval to the
value of the IPO could be as share in Macau, coming in at new law, which also cuts the
MGM Grand Paradise, the much as$1bn. just under 9 per cent for minimum company investment
50/50 joint venture between Investors could be scepti- 2009, compared with Sands’ required from US$15m to $8m.
MGM Mirage and Pansy Ho, cal of a repeat of Sands share of 23 per cent, and The new law replaces the
daughter of Macau gaming China’s weak flotation in Wynn’s share of 15 per cent. one in 1994 that said casinos
magnate Stanley Ho, is press- November, when the Gabriel Chan, a gaming could only be operated in
ing forward with its plan for company’s shares dropped analyst with Credit Suisse, luxury hotels with at least 250
an Initial Public Offering on 10 per cent below its issue said: “Wynn and Sands were rooms. The new law merely
the Honk Kong stock price over concerns of over priced at 13 times City. Whilst Nevada’s has no known connection states that casinos must be
exchange. valuation and saturation in (EV/EBITDA) multiples and Gaming Control Board and to criminal activity, New built ‘in association with one or
Financiers believe the Macau. Sands China raised MGM is a relatively weaker Gaming Commission Jersey regulators claim his more hotels of not less than
second stage of the process, $2.5bn in its IPO in Novem- player, so the market would decided that Pansy Ho, a suc- renting out of VIP gambling four star ranking’ although in
in which a short-list of ber, while Wynn Macau probably put a discount on cessful business executive rooms could cover some Maputo City, the hotel must be
bankers will be drawn up, raised $1.87bn in October. it at 11.5 times. Obviously if in her own right, was a fit shady goings on. a five star.
will take place after the Here main differences in they don’t come up with and proper business partner The recent abrupt depar- Mozambique currently has
Chinese New Year festival in those two IPO’s and MGM’s new development plans, by for MGM Mirage, the author- ture of MGM Mirage execu- just two casinos, one in
mid February. are the tangible assets asso- default, their market share ities in New Jersey did not. tive Gary Jacobs is believed Maputo, and one in Namaacha
The partnership cur- ciated with them and the could go down. The Pansy Last summer, gambling to be a case of the operator on the border with Swaziland.
rently only has one casino in plans for the future. Ho-MGM partnership is regulators in New Jersey addressing New Jersey regu- Operators will be able to set
operation, the MGM Grand MGM Grand Paradise has always an overhang.” concluded a four-year inves- lators who noted that up slot machines anywhere
Macau, and is the last of stayed fairly quiet about its Chan’s final point refers tigation into MGM Grand Jacobs, who organised the within their resorts in areas
Macau’s six main casino expansion plans. Sands on to lingering doubts about Paradise, and said it thought Macau deal, was not forth- such as shopping malls,
operators to list shares in the other hand already oper- the long term future of the that the partnership was coming with information meaning even people who
Hong Kong. Getting a high ated the Sands Macao and 50-50 joint venture partner- unsuitable for MGM. It rec- for regulators. If the depar- would not enter the casino will
valuation for its IPO may be the Venetian Macao when it ship between the world’s ommended the operator ture doesn’t ease New be targeted.
tough though. floated and made public its biggest operator and the should ‘disengage’ itself Jersey’s concerns it could in The driving force behind the
In research notes two ana- plans to develop five prop- daughter of Macau’s most from any partnership with due course oblige MGM loosening of regulations is the
lysts pitched the value of the erties on the Cotai strip. famous casino executive. Ho. Its concern is that they Mirage to sever its interest need to attract more tourists
deal at between $375m and Wynn meanwhile is on track That partnership could believe most of Pansy Ho’s in either Borgata or Macau, to the country. Responsibility
$500m. Research by a gam- to open the extension of its affect the one MGM Mirage cash injection of $80m in all of which will be in has switched over casinos
bling analyst for Oppen- Macau resort, Encore Macao, has equally with Boyd in the MGM deal came from investors’ minds when MGM from the Finance to the
heimer estimated the in April. owning Borgata in Atlantic her father. Whilst Stanley Ho Grand Paradise does float. Tourism Ministry.
Loveman interested in Caesars Palace Macau
lookingtoconquer monopoly came to and end us there,” Loveman said. Its options would prob-
CHINA and has had to stand back “We’ve made it very clear ably be limited to working
and watch as several near we would like to see the with a local company
Harrah’s wants to replicate replicas of its Las Vegas Caesars Palace brand in rather than a direct US
its Caesars Palace casino in rivals, most notably Wynn Macau. We certainly recog- competitor. Wynn and
Macau in a move that would and The Venetian, have been nise there are six licensees, Sands secured their own
demand it work with a built in the former Por- and somehow or other it has Macau licenses but MGM
partner already operating in tuguese enclave. to fit through that lens. We Mirage operates in Macau
Macau. As it looks for interna- need to try to bring our foot- through its venture with
Harrah’s chairman Gary tional markets in which to print into markets that are Pansy Ho. Harrah’s is prob-
Loveman confirmed the expand, Harrah’s, owner of appealing to us,” Loveman ably most likely to succeed
group wants to bring the a golf course in Macau, has added. “We are not a one- or in a partnership with
Caesars Palace brand to already held exploratory two- city company, we are a Melco Crown, Galaxy
Macau. The world’s biggest talks concerning a Caesars system of brands distributed Entertainment or Stanley
operator missed out on the Palace Macau. to as many people as possi- Ho’s SJM Holdings, all of
licence awards when “There’s nothing immedi- ble, so we need to continue which are based in Hong
Stanley Ho’s 40 year old ately active that could lead to expand.” Kong.
2 February 2010 • internationalnews
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