Inside Asian Gaming

INSIDE ASIAN GAMING | July 2010 8 company’s ‘Plan A’. Back in November 2009, LVS said in a filing to the US Securities and Exchange Commission addressed to would be lenders that it intended to stock Cotai 5 and 6 with 670 gaming tables and 2,200 slots. Then came the government’s live table cap, and the rest is history. LVS said in its Q1 2010 earnings conference call that it had been promised in writing 400 new tables for phase one, due to open in the third quarter of 2011. If that’s the case, it means the government has already broken its own cap. At the end of the first quarter this year, there were 4,811 tables in the Macau market. Encore at Wynn Macau added another 61 when it opened in mid-April, and Galaxy Entertainment Group says it has been told it can have 400 when it opens its Galaxy Macau resort on Cotai in the first quarter of 2011. That would take the market total to 5,272, leaving (in theory) only 228 for Sands China to play with when phase one of Cotai 5 and 6 opens. Guarantees Michael Leven, President and Chief Operating Officer of LVS, scotched the idea of LVS facing any table shortfall on Cotai 5 and 6. Mr Leven stated during the earnings call: “We’ve been assured in writing [by the Macau government] of 400 tables to start with and their assurance is of reviewing tables as we go over the next couple of years. Our expectation is and our lenders know that we will open with enough tables in 5 and 6 to justify the numbers that we projected in the loan documents. That will involve moving some tables from some of our facilities, as well as the addition of some electronic games.” Mr Leven was asked to clarify whether the 400-table figure included under-utilised tables the company might choose to move from its other properties to Cotai 5 and 6. His answer was unequivocal. “No. It’s 400 new tables plus 2,200 slots. We [also] have assurances from the government that they will work with us to get additional tables by the latest in March of 2013. But if that doesn’t happen, we will still open,” stated Mr Leven. “We will move some tables that we are not using in the other facilities as well as adding electronic games. So the numbers that we projected are the numbers that are in the loan documents and have been approved by the banks.” Mr Adelson added: “We are adding [to Cotai 5 and 6] 100 electronic table games, which offer some very good potential. We’re going to try different electronic table games,” he told analysts. How much Mr Adelson’s statement represents inherent faith in the business proposition of electronic games and how much it’s a case of necessity is open to debate. Slick operation What can be said is that if Sands China decides to put its slick marketing operation behind electronic table games, then they are likely to have a better chance of being programmed for success in Macau than they have been previously. “Already suppliers are vying for that electronic table business in Cotai 5 and 6,” says the gaming executive spoken to by IAG . “People are already trying to get new product into existing properties so they can create a market-tested value proposition to Sands China on Cotai 5 and 6,” adds the insider. Of course, some electronic tables are more electronic than others.There are tables, such as Walker Digital Gaming’s Perfect Pay Baccarat, with radio frequency identification tags in the chips and antennae on the table Cover Story Cotai 5 and 6 Michael Leven—government assurances Walker Digital Gaming’s Perfect Pay Baccarat