Inside Asian Gaming

INSIDE ASIAN GAMING | July 2008 Briefs International Briefs 58 Genting Launches UK Online Casino Malaysian leisure and gaming giant Genting Group has entered the online gaming realm with the launch of a UK poker and casino site. Genting, which owns UK casino chain Stanley Leisure, launched its new CircusCasino.com site on June 27. Genting’s maiden foray into online gaming is seen as a vote of confidence for the industry, which has been reeling since internet betting was effectively outlawed in the US in September 2006. Genting is also keen to use the new site as a testing ground for potential launches in Asia where a number countries are in the process of reviewing online gambling rules. Before being bought by Genting in 2006, Stanley failed with a number costly attempts to build its own Internet betting site. This time the firmhas opted to buy the poker,roulette and casino software from London-listed Playtech. While competition for players in the online casino market is becoming increasingly cutthroat, Genting has the advantage of being able to tap into its database of members that play at its real world casinos. According to Reuters:“Major online poker firm’s like PartyGaming, Bwin and 888.com have all struggled to keep up with sites like PokerStars that still take bets from US players and therefore have bigger prize pots.” Casino Revenue Falls at US Casino Centres Nevada casinos had a bad month in May—their worst in at least 10 years—posting revenue of US$969.9million,down 15.2% year-on-year. The slump was the fifth consecutive monthly decline state-wide. According to the Nevada Gaming Control Board, revenue on the Las Vegas Strip was down 16.4%, while revenue in downtown Las Vegas was down 17.3%. “People are coming to Nevada but they’re not spending,” Control Board analyst Frank Streshley said. “What we’ve seen for the last five months is a big decline in spending, and this month we were hit especially hard.” A breakdown showed that slots were down 15.1 percent while table games were down 15.7 percent compared with the same month last year. Slot machine revenue accounted for $647 million (66.7%) of Nevada’s total casino revenue in May, showing a 15.1% decline.Table games revenue accounted for the rest and fell 15.7%. Analysts paint a bleak picture for the US casino industry, with consumers cutting their spending amidst the worst US housing slump since the Great Depression, mounting unemployment and higher costs for food and gasoline. Casinos in Las Vegas will lose more visitors and revenue because airlines are cutting flights to the city and increasing ticket prices to save on fuel costs, according to Moody’s Investors Service. Meanwhile, in Atlantic City, New Jersey, casinos reported US$373.6 million revenue in June—an 11% year-on-year decline.The city’s 11 casinos generated $266.2 million in slot machine revenue and another $107.4 million at table games in June. Slot revenue was down 12.2% while table revenue fell 8%. Station Execs Top Pay Rankings Before the US economic slowdown, Las Vegas casino operators enjoyed a robust 2007, rewarding their top executives handsomely. The Las Vegas Sun reports that Station Casinos Chief Executive Frank Fertitta made US$122.4 million in exercised options and vested stock last year,andanother $3.5million inother compensation.Station President Lorenzo Fertitta earned $111.5 million from the value of stock and options, plus another $2.3 million in other compensation. Their big paydays came after Station Casinos was purchased for $9 billion and taken private by Colony Capital. Overall, six of Las Vegas’ 10 highest paid executives in 2007 were Station Casinos bosses. The balance of last year’s top 10 were MGM Mirage executives Bobby Baldwin, John Redmond, Jim Murren and Gary Jacobs. These long-time executives also cashed out by selling large chunks of company shares last year. The list can change dramatically from year to year. MGM Mirage Chief Executive Terry Lanni earned $22.2 million in 2007, placing 11th behind Station’s top executives and even other MGM Mirage executives. In 2006, he topped the list for earned compensation, with $30.1 million. Neither Steve Wynn nor Sheldon Adelson vested stock or exercised options last year, so their pay was primarily a total of base salary plus incentive-based bonuses.Wynn, No. 13 on the list, earned the highest salary and incentive bonus, $3.2 million and $7.5 million, respectively. Adelson, No. 30, reported a salary of $1 million and an incentive bonus of $1.9 million. Harrah’s Chief Executive Gary Loveman, No. 16 on the list with $8.2 million,reported a compensation package that appeared evenly spread between salary, incentive-based pay and the value of options and stock grants.No.28,Bill Boyd of BoydGaming,earned $3.8million, mostly from salary and performance pay. Frank Fertitta III