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CR75-p68-business1:SJC-Casino Review 21/12/08 01:46 Page 1
Biggest monthly fall for Strip
With half of November slots taking a 12.4 per cent
Casinos on the Las Vegas Strip saw October gross gaming
affected by the abortive hit to $228.4 (E175.5m),
revenues fall year-on-year by 26 per cent to $475m
Decline smoking ban, the 11 Atlantic while table revenues rose 2.8
(E365m), the biggest decline in its history. The results for
City casinos saw a fall in per cent to $117.1m (E90m).
the whole of Nevada were almost as bad with GGR
ear-to-date, revenues are
dropping to $905m (E695m), down 22 per cent on October
in Atlantic
gross gaming revenues in the Y
month of 7.8 per cent down 6.7 per cent to $4.2bn
2007: the state has seen revenues fall every month this
compared to the previous (E3.3bn); 2008 will be the
year. In the year to date, Strip revenues are down 8.7 per year. They earned collectively second consecutive year of
cent and Nevada down 8.3 per cent. $345.5m (E265.4m) with revenue falls.
Gala Coral
stays positive
Q3 loss
severe drop
in fortunes
The parent company of
Genting Stanley, the UK’s
largest casino operator, has
posted a loss in its third
As the UK’s third largest casino operator
quarter, despite higher rev-
and the largest bingo operator, Gala Coral
enues. In the three months to
has been highly exposed to the smoking
the end of September,
ban and adverse regulatory developments
Malaysia-based Genting
Berhad generated S$177.4m
following the implementation of the (E91m), up more than 40 per
Gambling Act in 2007. It shows in the
cent on the same period last
figures but the company is staying
year, which the company put
down to the higher drops and
resolutely upbeat. gaming wins. Two thirds of
the company’s business
fixedgrins of last year’s figure, after cant debt obligations, with introduced Casino Magic, 2007, of increasing effi- stems from gambling and
GALA CORAL exceptionals, which the net figure now standing which introduces new cus- ciency and of changing leisure with the British casinos
included write-downs on at £4.4bn (E5bn), much of tomer to roulette and black- some of our priorities, led us the greatest contributor.
In the year to the end of Sep- the value of the estate and which was generated by its jack.” back into strong profit However, the company was
tember 2008, Gala Coral the costs of closing some move into private hands. He continued: “The divi- growth in the period follow- hit by higher bad debts and
saw its group turnover casinos and bingo clubs. The company says, though, sion’s success is particu- ing the anniversary of the the exchange losses in what
decline by 3.2 per cent to In its yearly report, the that it is well placed to repay larly notable in the fact of introduction of the smoking has been a volatile currency
£1.27bn (E1.44bn). private equity-owned debts as they mature for at increased duty from the ban and encouraged us, market; it also recognised an
A rise in EBITDA of nearly company said that despite least two years. It will, budget in 2007, the legisla- despite the current eco- impairment charge of
nine per cent in the Coral being adversely affected by however, be keeping a close tion which forced us to nomic downturn, to take a S$100.8m (E51.7m) on good-
betting shop division, by far the smoking ban, which eye on costs and is to cut remove Section 21 positive view of the future.” will arising from its acquisi-
the largest contributor to was the main reason for the between 100 and 200 jobs machines, the smoking ban The company’s strategy tion of Genting Stanley. The
the business, could not fall in EBITDA, it was at head office. and the increasing number for casino division is now to company says the impair-
however offset a huge 32 pleased to have success- In terms of the casino divi- of competitors resulting grow and outperform the ment is due to general eco-
per cent fall in EBITDA from fully renegotiated its sion in particular, Dominic from the implementation market by attracting nomic slowdown in the UK
the bingo division (£92.7m banking facilities which Harrison, chief executive of of the Gambling Act. another 400,000 members, and the rest of the world, but
(E105.4m)), nor a 29 per will give it “sufficient finan- the company now that Neil “During the year, we largely through promo- particularly in the UK where
cent drop in that generated cial headroom” for the busi- Goulden has stepped up to closed or announced the tional activity and to offer business volumes have been
by the group’s 26 casinos ness to meet its needs on an be executive deputy chair- closure of four casinos, pri- them outstanding facilities, negatively affected.
(£23.7m (E27m)). EBITDA on-going basis. The man, said that in the face of marily because the games, customer service, Air In the nine month period,
for the entire group company’s three main everything he was pleased increased duty and competi- Lounges for smokers and Genting Stanley operations
dropped nearly nine per backers, Candover, Cinven it. He commented: “[It] per- tion made them non-viable. membership of the Fortune recorded a loss before
cent to £362.1m and Permira, were obliged formed extremely well in We have however worked loyalty card scheme. impairment and interest
(E411.8m). to invest another £125m what has been a tough year hard - and successfully - to The company is about to expenses of S$24.7m
Group profit took a hit, (E142m) in equity in April. for the entire industry. We ensure the continuing open its new casino in (E12.7m), having been in
declining to £95.6m However, the company is recruited 400,000 new success of the rest of our Gibraltar, which it says will profit with S$49.3m (E25.3m)
(E108.8m), less than a third still working under signifi- members, successfully estate. The process, begun in be the best in Europe. in the same period in 2007.
The company said: “The
loss from casino opera-
tions…was mainly due to a
Isle of Capri slows decline
combination of lower busi-
ness volume, lower luck
factor, write-offs due to
closure of casinos, bad debts
and higher gaming duties pur-
betterhalf cent to US$254.1m cent to $536.4m (E411.6m) with the first overall declin- suant to the change in gaming
ISLE OF CAPRI CASINOS (E195m), but its underlying with losses shrinking to ing gaming market that I duty rate from April 2007.”
loss shortened to $13.5m $17.1 (E13.1m) from have experienced in my 30- It added that it had also
Troubled casino operator (E10.3m) from $24.6m $31.8m (E24.4m) by com- year career. We are doing suffered a net foreign
Isle of Capri, which was (E18.9m) in the prior year parison to first half of the everything prudently possi- exchange loss of the S$15.6m
struggling in business even period. For the whole half 2007/8 financial year. ble to partially compensate (€8m) due to the continued
before the recession began year, revenues sank 3.8 per James Perry, executive for declining revenues. weakness of Sterling.
to kick in, has managed to vice chairman and CEO, said: Overall we are optimistic
get a grip on its costs so that, “Despite the overall eco- that we are implementing
despite a decline in rev- nomic uncertainty that has the right measures to have a
enues, it has improved its had a profound impact on meaningful position impact
losses in the second quarter. consumer spending across on our operations which we
In the three months to the the country, I believe that believe will provide a plat-
end of October, the our company has done an form for improved results
company reported a fall in effective job of improving when the economy
revenues of nearly nine per our operations while coping improves.”
68 January 2009 • businessnews
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