Inside Asian Gaming

INSIDE ASIAN GAMING | January 2009 Operator Outlook 32 M acau’s market performance in 2008 was a hare and tortoise race. Gaming revenue raced ahead for the first eight months of the year, only to be caught at the end by the creeping tortoise- like effects of visa restrictions and global recession. In 2009, it looks as though the Year of the Ox will live up to its name, with operators and players determinedly plodding through recession in the expectation of better days ahead. In the first eight months of 2008, Macau’s gaming income was growing at an unprecedented rate of 50% year-on-year. At that time, the suspension of any casino project was unthinkable. Asian equity and debt markets seemed to have escaped the worst ravages of the US-focused sub prime lending crisis, and financial institutions and investors based in the Asia Pacific region appeared to have enough liquidity to back Macau operators in the roll out of their building programmes. LVS—bloodied but unbowed That all changed in the final quarter of 2008, when the big wave of the world financial tsunami finally hit the shoreline of China. First there was the dramatic announcement in November to the US Securities and Exchange Commission made by PricewaterhouseCoopers, auditors for Las Vegas Sands Corp, that the very survival of LVS was in question. It followed the company’s unsuccessful attempts to interest the debt markets in issuing fresh funding in order to meet covenants on existing loans and to provide fresh capital for its construction projects in the US and Asia. LVS chairman Sheldon Adelson, his Plodding On Macau’s operators steel themselves for steady though perhaps unspectacular performance in 2009’s Year of the Ox