Inside Asian Gaming

July 2008 | INSIDE ASIAN GAMING 57 Briefs Regional Briefs LVS May Borrow US$7 Billion for Macau Projects Bloomberg reported that Las Vegas Sands Corp (LVS) may borrow US$7 billion to expand and refinance debt for projects in Macau, citing three people familiar with the deal as its source. The company refused to comment on the claim,which,according to LVS spokesman Ron Reese, amounted to “rumour or speculation.” According to the report, LVS is in talks with lenders for the deal, which would be its biggest outstanding loan. It may also replace US$3.3 billion of loans taken in 2006 to finance the US$2.4 billion Venetian Macao casino resort. The loan will help LVS—whose shares fell to their lowest level in two and a half years and are down over 50% since the start of the year—fund US$12 billion in spending on a 20,000-room hotel and casino complex on Macau’s Cotai Strip. Credit Suisse analyst Gabriel commented: “Demand for gaming in Macau is still growing fairly well, but supply is an issue.The growth of supply is just outrageous. This, together with rising labour costs and inflation, will put further pressure on every casino operator in the next couple of years.”Credit Suisse expects the supply of gaming tables in Macau to increase by 30% next year, outpacing its forecast 20% percent expansion in demand. LVS is also building the S$5 billion Marina Bay Sands in Singapore, scheduled to open as the city state’s first casino in 2009, and the US$800 million Sands Bethworks in Bethlehem, Pennsylvania. The costs of developing new properties led to an unexpected US$11.2 million first-quarter loss for LVS after interest expenses more than tripled to US$114.7 million. Wynn Sees Strong Q2 Macau Performance Wynn Resorts announced preliminary second-quarter earnings, which showed declines in Las Vegas offset by strong gains in Macau. Wynn Resorts said it expects Wynn Las Vegas’ second-quarter operating income to be between US$18 million and $22 million, down from $63.4 million in the same quarter of 2007. It expects second-quarter EBITDA at the property to be between $80 million and $84 million, down from $115.3 million a year earlier. Meanwhile, the company expects Wynn Macau second-quarter operating income to be between $100 million to $106 million, compared with $53.2million a year earlier,and EBITDA to be between $152 million and $158 million, up from $92.7 million a year earlier. Wynn Resorts said it would release final second-quarter results on July 24. It also said its board had approved an increase of up to $500 million to its previously announced $1.2 billion stock buyback program. Meanwhile, the South China Morning Post reported that Wynn Resorts may be considering a Hong Kong stock offering to raise anywhere from US$500 million to $3 billion to help fund the company’s planned Encore at Wynn Macau. Citing unnamed sources, it said Wynn Resorts had hired UBS, Morgan Stanley and Deutsche Bank to help with the possible offering. The sources added, though, that volatile markets and economic uncertainty in the US may keep the offering from happening soon. Construction has started for the Encore at Wynn Macau, a resort with 400 luxury suites and villas, restaurants, shops and VIP gaming space. In December, Wynn Resorts projected an early 2010 opening for the project. MGM Grand Paradise Appoints New President Grant R. Bowie has been appointed President of MGM Grand Paradise Limited, effective 1 August, 2008. In his new position, Mr Bowie will be responsible for the overall management, strategic development, expansion and all of the joint venture company’s activities in Macau. A native New Zealander, Mr Bowie spent close to 2 decades with Conrad Jupiters Gold Coast, Queensland, Australia, with his final position serving as Senior Vice President for the Australian area. Between 2003 and 2007, Mr Bowie relocated to Macau, and was President and General Manager of Wynn Macau. Erstwhile MGM Grand Paradise President Bob Moon will now resume his position as President and CEO of MGM MIRAGE International, responsible for International Development, Operations and Marketing for MGM MIRAGE. TST Opens Macau Lab On the heels of the recent opening of its new testing laboratory in London,Technical Systems Testing (TST) opened its Macau testing lab on June 1st.TST is one the world’s most experienced test facilities for both the land-based and remote (interactive) gaming industry, with over 15 years experience and worldwide recognition. The new location inMacauwill allowTST to keep abreast with the potential modifications and updates to gaming technical standards in Macau, as well as other surrounding emerging Asian jurisdictions. TST’s Chief Executive, Salim L. Adatia stated,“The strategic location of TST’s new Macau laboratory displays our on-going commitment to providing high quality testing and consultation services on behalf of the Macau Gaming Inspection and Coordination Bureau (DICJ). It also enhances the speed at which TST can respond to the testing needs of long-standing Asian’s gaming operators and manufacturers whom we service”.