Inside Asian Gaming

43 42 Regional Briefs SJM Set for IPO Macau casinomogul Stanley Ho’s Sociedade de Jogos deMacau (SJM) is set to launch a US$1.9 billion initial public offering (IPO) in Hong Kong after a Macau court on July 31 refused to issue an injunction filed by Mr. Ho’s estranged sister Winnie to block the IPO. Winnie Ho has a 7.3% stake in SJM, and according to Hong Kong-daily The Stan- dard , said she didn’t approve the firm’s listing and that her brother had pressured her to give up her interest in the parent company. Mr. Ho has denied the allegations. China to study its football-lottery system. Ladbrokes Chief Executive Chris Bell said:“Our presence in China, where we are acting as consultants on the opening of China’s first pool betting shops, has opened up other opportunities in Asia, in- cluding Vietnam where we are in discussions on a new football lot- tery, which is due to launch next year.” Other potential partners the Vietnamese government could turn to for help in legalising gambling are Singapore Pools and SMS, the international data- processing company. Wynn Appoints Jack Binion to Head Asia Wynn Resorts named Jack Binion as chairman of Wynn International and senior executive for its Asian operations and development. “The decades of experience and unparalleled success that Jack brings to our company is extraordinary,” commented Wynn Resorts Chairman Steve Wynn.“Jack takes his place in the Company at a mo- ment in our history that is truly auspicious. He will lend his direction and maturity to Wynn Macau. Jack’s guidance will greatly enhance our ability to deal with the challenges that we face as a fledgling op- erator in China.” Mr. Binion was formerly chairman of Horseshoe Gaming Hold- ing Corp, and will join Wynn before the September 6 opening of the US$1.2 billion, 600-room Wynn Macau. Mr. Binion sold Horseshoe Gaming, which owned three riverboats in Louisiana, Indiana and Mississippi, to Harrah’s Entertainment in mid-2004 for US$1.45 bil- lion. The deal included a noncompete contract that precluded Bin- ion from working for any Harrah’s competitor domestically except in Nevada. Analysts view the appointment of Mr. Binion as good news for Wynn Resorts.“Binion’s talent and creativity in dealing with high roll- ers should be of big benefit toWynn,and we take this as a strong posi- tive for the company,”said Jeffries and Co. analyst Larry Klatzkin. Deutsche Bank analyst Andrew Zarnett said: “His experience with his dad in running Binion’s gives him unique experience in tak- ing care of gamblers, and that’s what the Macau market is,” with the city’s high-roller market characterised by close one-on-one re- lationships. “Also, his folksy personality will be a great attraction. But the best part of the choice is the mutual respect Steve Wynn and Jack Binion have for each other,”said Mr. Zarnett.The two reportedly got to know and admire each other when Binion was running Binion’s Horseshoe andWynn owned the Golden Nugget. Macau Retains Ban on Imported Dealers The Macau Post Daily quoted Secretary for Economy and Finance Francis Tam as reaffirming the ban on “non-resident workers” be- ing employed as dealers in local casinos. Recent rumours have been circulating in the local media, speculating that the government will soon ease the restriction, but Mr. Tam asserted the government has no such plans. The government does, however, allow casinos to hire a certain number of foreign employees at the management-level, which apparently does not deprive Macau residents of employment opportunities. Refining the Marina Bay Sands Las Vegas Sands Corp (LVS), which won a bid to build Singapore’s first casino, is discussing the refinement of the Marina Bay Sands design with the city-state’s government,and expects to start construction on the casino resort by the end of the year. Construction of the Marina Bay Sands is expected to be completed by 2009.LVS will invest US$3.2 billion in the casino resort, making it one of the most expensive proj- ects of its kind. In May, the Singapore government picked LVS over Vegas rivals MGM Mirage and Harrah’s Entertainment and Malaysia’s Genting In- ternational as the developer and operator of the country’s first so- called “integrated resort” (IR). LVS’ proposition focused on boosting the city-state’s conventions business. The company’s Senior Vice President of Asian Development Ste- phen Weaver said there was already keen interest from players in the meetings, incentives, conventions and exhibitions (MICE) industry and foreign retailers to be involved in the project. Meanwhile, Mr.Weaver said it will cost more to rent a shop space at the Marina Bay Sands integrated resort than it currently does along the city’s main shopping belt,Orchard Road.MrWeaver,who has over- all responsibility for the LVS projects in Macau and Marina Bay Sands, also revealed that the casino operator is already in talks with retail tenants for around 150,000 sq. ft of the planned 800,000 sq. ft of retail space at the Singapore development. Mr. Weaver said: “When we started to lease the Grand Canal Shoppes in Macau, we spent three to four months just talking to re- tailers to make sure we got it just right in terms of merchandising mix, where they thought they ought to be,what sort of tenants they want- ed beside them, and revised the design as we went.” He added: “By the time the leasing announcement was made,we had already leased 100 shops.We may very well do the same thing here [in Singapore].” LVS’ flagship property in Las Vegas, the Venetian, currently ranks as the second highest earning shopping mall in the US, earning over US$1,200 per sq. ft of retail space. Mr. Weaver also pointed out that the compound annual growth rate of retail revenue doubled that of gaming over the past six years in Las Vegas – with retail growing at 9.2% compared to gaming’s 4.8%. The Race for the Other Resort Four consortia are competing to build Singapore’s second casino- centred integrated resort (IR), to be located on Singapore’s resort island of Sentosa.The consortia in the running are: Harrah’s Entertain- ment with its Singapore partner Keppel Land; Bahamas-based resorts developer Kerzner International Ltd with its Singapore partner Capi- taLand; privately held Las Vegas casino developer Eighth Wonder, to- gether with Starwood Hotels & Resorts and Isle of Capri Casinos Inc; and Malaysia’s Genting group, which is bidding through its two affili- ates Genting International and cruise operator Star Cruises Ltd. Genting has teamed up with theme parks giant Universal Studios on its bid. One of the bidders, Bahamas-based Kerzner International and its local partner, real estate developer CapitaLand, disclosed the appointment of celebrated architect Frank Gehry as the principal de- signer of their proposed Sentosa project. Mr. Gehry’s world-famous designs include the Guggenheim Museum in Bilbao, Spain. Singapore wants the Sentosa casino, a 49-hectare site, to feature family leisure attractions to lure tourists to the region. South Africa’s top casino operator, Sun International, pulled out of the race in June, saying the project would incur too great a diversion of its resourc- es. The bidding will close on October 10 and the winner will be an- nounced by the end of the year. LVS to Invest Over US$8bn in Macau Las Vegas Sands Corp (LVS) will spend more than US$8 billion on ca- sino, leisure and convention facilities in Macau and the neighbouring Chinese island of Hengqin over the next four to six years. The invest- ment is double the figure originally reported. Company president and chief operating officer Bill Weidner said: “These development opportunities are contingent upon approvals by government at several levels and will occur in phases over time as the markets develop and mature.” LVS plans to spend US$3 billion each in two phases on the Cotai Strip and company officials also are in talks to develop Hengqin, which borders Cotai. Macau Poised to Overtake Vegas Strip With over US$20 billion worth of investment committed to some 25 new hotels and casinos over the next five years, Macau is expected to emerge as a world-class tourism destination. According to a fore- cast by Globalysis Ltd, a Las Vegas-based tourism and casino gaming consultancy, Macau’s casino revenue will rise to US$8 billion in 2007 from US$6.8 billion this year, representing 18% year-on-year growth. Globalysis expects Macau revenue in 2006 to already exceed that on the Las Vegas Strip. Still, it stressed that Macau is still some way from eclipsing all of Las Vegas’ hundreds of casinos, which brought in US$9.1 billion in revenue last year. Globalysis also explained that the growth of Macau as a true tour- ism destination, rather than just a day-trip casino gaming hub, will contribute to growth. According to Globalysis partner Jonathon Ga- laviz,“Macau’s casino gaming revenue in 2007 will be driven by sub- stantial growth in non-casino amenities such as new convention cen- tre venues and innovative entertainment options incorporated into Macau’s fresh Las Vegas-style integrated resorts.” Melco-PBL Picks Hyatt to Operate Macau Hotels The joint venture between Melco International Development and Australia’s Publishing & Broadcasting Ltd (PBL) picked Hyatt Interna- tional to operate two of the hotels it is building in Macau. Melco PBL Entertainment (Greater China) Ltd is building a casino resort on 27 acres of land on Macau’s Cotai strip.The “City of Dreams” project will house a 40,000 sq.meter underwater-themed casino with more than 450 gaming tables and about 3,000 slot machines. The project will feature four hotels with 2,000 rooms and serviced apart- ments. Hyatt International will manage two of the four hotels under the banner of Grand Hyatt and Hyatt Regency. Grand Hyatt will have 380 rooms, while Hyatt Regency will have as many as 800. Melco Chairman Lawrence Ho said of the partnership with Hyatt: “Having such a renowned partner joining the City of Dreams will enable us to tap the vast customer base of Hyatt Group.” The Hyatt brand is on 214 hotels and resorts with more than 90,000 rooms in 43 countries. Vietnam Seeks Guidance in Legalising Gambling The Vietnamese government has approached three gaming groups, including UK-based Ladbrokes, to help legalise gambling in the country. Vietnam is keen to create a lottery-based football betting ex- change, in large part to counter widespread illegal gaming opera- tions in the country. Government officials have already travelled to