Inside Asian Gaming

December 2009 | INSIDE ASIAN GAMING Bill. Articles 3, 4 and 5 make illegal “sedition, secession, subversion and treason against the Central People’s Government of China”. Supporters of the bill say it is a necessary measure to protect law and order and peaceful economic development. Opponents say the law is far too broad in scope and contravenes Article 19 of the International Covenant on Civil and Political Rights, to which Macau is a signatory. Hong Kong’s Legislative Council steps back from passing similar legislation after public protests. March – Francis Lui, deputy chairman of Galaxy, tells IAG the companywill finish its Cotai integrated resort “when market conditions are right”. “We have a very strong balance sheet with over HK$5 billion in cash, which we strengthened recently with our bond buyback programme. So we’re in a safe, comfortable position right now,” adds Mr Lui. April – The government announces another cash handout, with MOP6,000 to every permanent resident and MOP3,600 to non-permanent residents. Only around 200 people take to the streets on Labour Day. May – Media reports suggest Dr Stanley Ho offered to buy out LVS’s interest in Cotai plots five and six in the wake of LVS’s well-documented funding challenges. Given the animosity of gaming regulators and law enforcement in the United States toward Dr Ho, the offer is subsequently considered to be a bit of grandstanding by SJM at LVS’s expense. A cap on VIP chip commission proposedbytheMacaugovernmentcould be a boon to local gaming operators, suggests a report from Morgan Stanley Research Asia/Pacific. A cut in the upper level of Macau VIP chip commission rates of Francis Lui 15 on-year for the first half of 2008. Analysts point out the pitfalls of comparing private company results with public company ones. November – Auditors for Las Vegas Sands Corp issue a warning to the US Securities & Exchange Commission over LVS as “a going concern” because of debt repayment pressure on the heavily borrowed company. LVS Chairman Sheldon Adelson remains calm, saying his business will have no problems meeting its obligations. Xinhua , China’s official news agency, publishes a story suggesting Macau’s infrastructure can only cope with 79,000 visitorsperday. Thereportisseenassupport for the official policy of visa rationing. LVS suspends work on plots five and six of The Venetian Macao site because of debt repayment pressures. Around 9,000 construction workers from Hong Kong and Mainland China are forced to leave Macau as their contracts are cancelled. December – Macau’s Statistics and Census Service estimates a record 30.1 million people visited the territory during the year – more than three times the number recorded for 2000. Macau’s gross gaming revenues are likely to fall by 17% in 2009, estimates a report from Goldman Sachs. But the finance house says the suspension or delay of Macau gaming projects because of the global credit squeeze could actually benefit some operators. Revenue fromslots inMacau reach the equivalent of US$710 million in 2008— up 57.2% on 2007. Some of the boost in productivity on a per slot machine basis is due to a reduction in the total number of machines on casino floors—from 13,267 at the end of Q4 2007, to 11,856 at the end of Q4 ’08. Those that remained, though, brought in more cash than ever. The gross revenue from slots in Q1 ’09 was MOP1.53 billion, up 3.72% quarter on quarter and up 13.2% year on year. 2009 January – Deutsche Bank says Galaxy Entertainment Group may need to suspend construction of its flagship integrated resort at Cotai in 2009 because of a likely funding gap. February – Macau’s Legislative Assembly passes a National Security just 10 basis points (i.e., 0.10%) could lead to a dramatic improvement in pre-tax margins and pre-tax earnings say the authors. MGM MIRAGE says in a filing to the US Securities and Exchange Commission that New Jersey’s Division of Gaming Enforcement (NJDGE) had described Pansy Ho, its joint venture partner in the US$1.25 billion MGM Grand Macau, as “unsuitable”. June – City of Dreams, MPEL’s US$2.1 billion flagship integrated resort on Cotai, has its first phase opening. Crown Towers, with its high roller suites and the Hard Rock Hotel, with its branded Hard Rock Casino, open first, followed by the 800-room Grand Hyatt Macau in the autumn. Dr Stanley Ho, Chairman of SJM Holdings Ltd, and considered the father of Macau casino gaming in the modern era, is presentedwith a G2E AsiaVisionary Award at the annual exhibition for the industry. July – Chui Sai On is formally selected as Macau’s Chief Executive-elect. His inauguration takes place on the 10th anniversary of the establishment of the Macau Special Administrative Region in December. Mr Chui will be the second person to hold the job since the territory was passed from Portuguese administration back to China in 1999. Cover Story City of Dreams Fernando Chui Sai On