Inside Asian Gaming

INSIDE ASIAN GAMING | January 2010 Shares of Sands China, the Macau unit of Las Vegas Sands floated on the Hong Kong stock market in November, rose as much as 4.72% to a near three-week high of HK$10.42. Wynn Macau, which is expected to open its VIP-focused extension Encore Macau on 1st April, the Macau unit of Wynn Resorts advanced 3.56% to a three- week high of HK$9.89. SJMHoldings, the casino holding company of former monopolist Dr Stanley Ho, gained as much as 5.7% to its highest level in more than two months at HK$4.63. Shares of Galaxy Entertainment Group rose as much as 3.1% to a two-week high of HK$3.32, while Melco International Development, a joint venture between Hong Kong-listed Melco and Australian casino operator Crown Ltd, rose as much as 3.91% to its highest level in more than two weeks at HK$3.72. Macau’s latest flame Leading casino designer Paul Steelman revealed the design secret behind Casino Oceanus when the latest SJM property opened in Macau in mid- December. “We tried not to make the back walls too bright,”he confided to IAG . “In Vegas you find quite a few of the older properties have conventional entrances letting a lot of light in at the edges of the gaming floor. That creates what we call the ‘moth effect’. Humans naturally move toward the light. In a casino, that’s not what you’re looking for if you’re the operator.” Instead, Mr Steelman created other devices to keep occupied the human ‘moths’ coming to have a flutter at Casino Oceanus. “We had to keep the building essentially as it is, and we couldn’t take out the supporting pillars, so we decided to draw attention to them instead by decorating them with lights.” So there you have it from the design master. If you want to attract moths and keep them excited, switch on a light bulb—but only in the centre of the room. Grand Central One Central, the new luxury shopping mall and apartment complex connected to MGM Grand Macau casino, officially opened early in December. The site has been developed by Hongkong Land and shipping and property conglomerate Shun Tak, managed by Pansy Ho, a 50% equity partner alongside MGM MIRAGE in MGM Grand Macau. The aim of the new property is to drive high-income residents to the casino and VIP players to the luxury mall and apartments. The residential portion, known as One Central Residences, offers 200,000 square feet of space, consisting of seven residential blocks of 32 to 38 44 Briefs Regional Briefs Possible spring hearing on MGM MIRAGE’s Pansy Ho link An executive who played a key role in brokering MGM MIRAGE’s 2004 Macau joint venture deal with Pansy Ho has left the company. Gary Jacobs, the firm’s general counsel, had a contract valid until 2013. His early departure is being seen in some quarters as MGM MIRAGE’s attempt to head off sanctions from New Jersey, where the company jointly owns with Boyd Gaming The Borgata Hotel Casino & Spa in Atlantic City. The New Jersey Casino Control Commission is expected to hold a hearing this spring that effectively reopens an earlier licensing investigation of the Borgata. That 2005 probe addressed the suitability of MGMMirage as a part owner of an Atlantic City property in the light of its links with Ms Ho in Macau. In addition, last May New Jersey’s Division of Gaming Enforcement issued a report to the state’s Gaming Control Commission reiterating some of the concerns about MGM MIRAGE’sMacau operation. It described Pansy Ho as an“unsuitable” partner. Ms Ho’s father, Dr Stanley Ho, is Macau’s former gambling monopolist who has been accused by US Federal authorities in the past of links with organised crime. Industry analysts with a more cynical turn of mind think the re- emergence of the guts of that critical 2005 report in 2009—when the fruits of the Macau joint venture with Ms Ho, the US$1.3 billion MGM Grand Macau, had been up and running for more than 18 months— had more than a passing connection with the decision of financially- straitened MGM MIRAGE to shelve plans for further investment in Atlantic City. Macau growth boosts operator shares SharesofMacaucasino operators rose sharply in the first trading week of 2010 on reports that gross gaming revenues there rose 47.6% year-on-year in December to 11 billion patacas (US$1.38 billion). The December figures were published in several media sources citing Por tuguese -language news agency Lusa . It meant that taking 2009 as a whole, gross gaming revenue for games of fortune (excluding sporting pastimes such as horse racing and soccer betting) were 9.4% up on 2008. The reason for the wide spread between 48% plus monthly growth in the latter half of 2009 and 10% annual growth across the whole year is that the average was brought down in the first half. That was due to the lingering effects of global recession and visa restrictions from Mainland China—two factors that eased in the second half. Paul Steelman On the up—Macau operator shares