internationalcasinoreview


CityCenter to offer notes to lessen debt The US$8.7bn CityCenter, the joint-venture between MGM Resorts and Dubai World is to offer US$1.1bn in notes through a private placement as it attempts to address its financial problems. CityCenter plans to use the net proceeds from the offering to reduce its obligations under its existing credit facility in connection with amending and restating the credit facility to, among other things, extend the maturity of the remaining loans for four years. MGM, which has incurred a heavy debt load following aggressive expansion plans, has raised capital recently through stock and bond offerings. Three rating agencies raised their outlooks on the casino operator last year.


boomtown CHINA


Despite analysts predicting a dip in Gross Gaming Rev- enues in December, Macau finished 2010 as strongly as it had performed all year fin- ishing the year with an incredible 188.3bn patacas (US$23.5bn), outstripping earnings on the Las Vegas Strip by four times and recording a whopping 57.8 per cent increase over 2009’s figures. China’s only gambling destination also set a new monthly record in Decem- ber, bringing in 18.88bn patacas, about 66.4 per cent higher than the same month in 2009. Aaron Fischer, a CLSA gaming analyst, admitted: “We were not expecting it to be so strong in Decem- ber. We thought it would fall off a bit in the last few weeks but it didn’t. Historically, Christmas is not a big gam- bling time.” The increase in GGR was aided massively by the influx of gamblers from mainland China on contin- ued strength in the Chinese economy. Although visitor numbers for the final month of 2010 were still being pre- pared, November’s figures were the best ever for the month. Arrivals soared by 6.5 per cent year-on-year to 2m, meaning the first 11 months of 2010 saw more visitors than in the whole of 2009.


Between January and


November, 22.69m people visited Macau, up by 15.1 per cent year-on-year, but still falling short of the record 30.19m in 2008. As usual, Chinese tourists


represented more than half of the total number of visi- tors (53 percent), with 12m, a 20.5 per cent jump year-on- year but arrivals from Hong Kong were up by 11 per cent to 6.8m visitors. South Korea and India also provided record numbers of visitors.


The gaming floor at City of Dreams


Wynn


becomes citizen of Monaco


cityslicker MONACO


Macau set for further growth following 2010 record


Macau’s figures for 2010 are quite simply breathtaking; GGR of 188.3bn patacas (US$23.5bn), an increase of a 57.8 per cent compared to 2009, four times higher earnings than the Las Vegas Strip, and still there’s more jack in the pot. Analysts are predicting an increase in the coming year of between 15 and 27 per cent again with Galaxy Entertainment set to be the big winner of 2011.


Last month, the local gov-


ernment refused to issue separate applications to Las Vegas Sands and SJM Hold- ings to develop further Cotai sites stating it would no longer grant land without a public tender. Although analysts believe


growth will be at a much slower rate, there is much more for Macau to shout about in 2011. Fischer believes that fuelled by free spending Chinese buoyed by a posi- tive local economy, Macau’s GGR will grow by 20 per cent in 2011 and 25 per cent in 2012. Jonathan Galaviz, manag-


ing director of Galaviz & Company, pitched his esti-


mates slightly higher at a 27.4 per cent increase from the 2010 figures. “Macau’s casino revenue in 2011 has a very good chance of reaching US$30bn if the macro-economic environ- ment of China remains strong and stable. While the percentage of growth will moderate, the absolute dollar volume growth will continue to be significant. There continues to be a massive amount of mone- tary liquidity in China and greater Asia that is con- tributing to Macau’s per- formance. Excess liquidity in Asia, and its eventual withdraw, will pose signifi- cant risks for Macau’s casino gaming industry


moving forward.” He added that Macau was


still ‘lacking the indicators of a true global tourism des- tination.’ “The average length of


stay in Las Vegas is nearly four nights while Macau’s is barely over one night,” he explained. The huge increase in GGR came despite there not being any new casino for the first time in six year although Encore as opened as part of Wynn Macau. Once again VIP baccarat lead the way bringing in GGR of MOP135.7bn (US$16.9bn) in 2010, equat- ing to 72 per cent of the total and up 69.91 per cent from 2009.


Mass market baccarat was the second most popular casino game in Macau last year, generating revenue of MOP34.92bn, whilst slots were up 32.52 per cent to MOP8.62bn and were Macau’s most popular non- baccarat game. At the end of 2010, Macau’s 33 casinos boasted 4,791 tables and 14,050 slots. In terms of winners in


2011, analysts believe Galaxy Entertainment will do well with its Galaxy Macau resort due to open in the next few months. “I expect Galaxy’s gross gaming revenue market share to rise to 15 per cent in 2011 from about 11 percent in 2010,” Chris Zee said.


MGM’s M Life looking to take on Total Rewards


newwayoflife UNITED STATES


MGM Resorts is in discussions to launch several marketing partner- ships with gaming companies outside Nevada to attract more custom as it launches a new cus- tomer-loyalty program called M Life. The company is in talks with at least three US casino groups who operate away from the Strip in regional markets where MGM doesn’t compete. It is also negotiat- ing deals with American Indian operators as it looks to add cus-


tomers to its database, extend its marketing prowess and take on the Total Rewards program used by Caesars Entertainment which has more regional locations than MGM. Previously, MGM has teamed up


with foreign casino operators, hote- liers, cruise ships and retailers to offer around 20 marketing deals with tailored rewards to bring players to Las Vegas. Jim Murren, chairman and CEO of MGM Resorts, said doing likewise in the US was an ‘untapped opportunity.’ M Life was launched in January at the company’s Strip resorts, with


the main difference being that it will track customers’ total spend- ing rather than just gambling. It aims to bring ‘tens of millions


of dollars’ to MGM’s profits. “M life represents a major shift for MGM Resorts in the way we are engaging our guests,” Murren explained. “We’ve listened to our customers and designed M life to deliver on their preferences, leverag- ing a calibre of assets no other resort group can offer. In terms of business impact, M life will enable us to retain a larger share of existing customer spend, activate new customers,


increase customer frequency and provide better return on investment for promotional expenditure.” Benefiting from an unmatched collection of amenities, members will enjoy one-of-a-kind experi- ences exclusive to MGM Resorts, insider privileges, personalised rewards and an aspirational tiered approach with escalating earning potential. M life is launching as a casino rewards club; later this year, it will expand into a full loyalty program recognising guest spend on hotel stays, shopping, dining and more.


February 2011 • internationalnews 3


Steve Wynn, Wynn Resorts’ chairman and chief execu- tive, has been granted Mone- gasque citizenship, having agreed to serve as an outside director for a joint venture between the governments of Monaco and Qatar. Wynn Resorts spokes- woman Jennifer Dunne said Wynn would not renounce his American citizenship and would remain both a US caitizen and taxpayer. Wynn Resorts hasn’t yet


provided details on the nature of the joint venture. “His Monegasque citizen- ship was pursued as a result of this appointment,” to the board of the joint venture, said Dunne.


In August it was


announced that Qatar and Monaco had formed a joint venture international company, Monaco QD Inter- national Hotels and Resorts Management, to buy and manage hotels and resorts in Europe, the Middle East and North America.


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