Inside Asian Gaming

INSIDE ASIAN GAMING | March 2009 50 Briefs International Briefs Trumped Trump Entertainment Resorts, the United States- based casino group majority-owned by Donald Trump, filed for bankruptcy protection in the face of multi-billiondollardebts.The news must have sent shivers down the well-leveraged spines of one or two other gaming operators. The petition for Chapter 11 bankruptcy protection said the firm, which has casino properties in Atlantic City, New Jersey, had debts of US$1.7 billion as of 31st December 2008. Although Trump Entertainment Resorts has no Asian interests, it appears the whole thing began to unravel after the company missed a US$53 million interest payment in early December. When something like that happens, it’s almost inevitable that a company’s debt rating will be downgraded by one of more of the ratings agency. This creates a vicious circle making it even harder to raise money on the open market. In the current credit climate that can be fatal. Trump Entertainment Resorts hadnot been in the best of financial health since as far back as 2004. Its woes today must though be a timely warning. Small wonder then that one or two gaming operators with Macau interests have been working to pay off bank debt early or retire bonds. The last thing a Macau operator wants to hear from his or her bankers in the present financial situation is: “You’re Fired”. Aloha There are reports that Hawaii, the offshore US state in the Pacific Ocean—and birthplace of the new US president Barack Obama—is thinking about legalising casinos. The news needn’t give Macau casino executives too many sleepless nights. The distance from Shanghai to Honolulu is 4,950 miles, according to WikiAnswers.com, rendering the journey uncomfortable, inconvenient and expensive enough to put off all but the most dedicated Chinese gamblers. According to the HonoluluAdvertiser , Hawaii andUtah are the only US states with no legalised games of chance. This is not to say they don’t have gambling—just that it’s illegal. The newspaper describes Hawaii’s onshore sports betting market as “barely underground”. If globalisation proves anything, it’s that human beings have more in common than appearances might suggest. Forbidden US Tax Bounty Reuters reports the US could raise nearly US$52 billion in revenue over the next decade by lifting a three-year-old ban on Internet gambling and taxing the activity instead, according to a study. Gambling supporters hope the new analysis prepared by accounting firm PricewaterhouseCoopers will help propel efforts in Congress this year to repeal the 2006 Unlawful Internet Gambling Enforcement Act. “There is a dramatic need to have a regulated system that protects American consumers. Right now, it’s the Wild West,” Jeffrey Sandman, a spokesman for the Safe and Secure Internet Gambling Initiative, told Reuters . That group includes the London-based Remote Gambling Association, which represents European online companies that lost billions in market value after Congress passed the 2006 law and they withdrew from the US market. The legislation attempted to squash online gambling in the United States by barring businesses from knowingly accepting payments in connection with unlawful Internet gambling, including payments made through credit cards, electronic fund transfers and checks. But PricewaterhouseCoopers’ latest estimate of how much the US could raise from regulating and taxing Internet gambling is about 22% higher than it was in 2007 because US online gambling has grown despite the ban, Sandman said. CityCenter Financing Still Short After discussions with Deutsche Bank collapsed in early March, cash-strapped casino operator MGM Mirage will have to look elsewhere for the final US$1.2 billion in financing needed to complete its US$9.1 billion CityCenter development, reports the Las Vegas Gaming Wire . The news, coupled with MGM Mirage’s recent announcement that it could default on its US$7 billion senior secured credit facility and be labelled a “going concern” by its independent accountants, didn’t sit well withWall Street. Speculation about the financial health of the Strip’s largest casino operator widened. “We stayed positive on MGM Mirage since we believed the Donald Trump MGM Mirage is selling off Treasure Island