Inside Asian Gaming

November 2010 | INSIDE ASIAN GAMING 45 Briefs and customisation options. GPIC’s products are manufactured worldwide in its high security, high-capacity production facilities. The company’s products have been used in casinos all over the world since 1925. New Cotai sues its Macao Studio City partners Dow Jones Newswires reported last month that a unit of New Cotai LLC (owned by US investment firms Oaktree Capital Management and Silver Point Capital) had filed a lawsuit against its joint-venture partners on the long-delayed US$2.4 billion Macao Studio City casino-resort project, located adjacent to Venetian Macao on Macau’s Cotai Strip. The suit accuses Singapore property developer CapitaLand, eSun Holdings and their unit East Asia Satellite Television of breach of contract, inducement of those breaches and unlawful conspiracy, according to a statement from the New Cotai unit. Both CapitaLand and eSun have said they believe the claims are without merit and they will defend them. Macao Studio City was originally set to open last year, with the project initially attracting interest from Marriott International, W Hotels, Ritz-Carlton Hotel, mall-operator Taubman Centers, and Playboy Enterprises’ Playboy Mansion. But Macao Studio City’s development has been stalled for more than three years, with the partners entering into a bitter dispute. Taubman and Playboy backed out in 2009. New Cotai joined the project in December 2006, when it paid eSun about HK$1.3 billion (US$168 million) for a 40% interest in the JV and the rights for its unit to develop a casino within the project. eSun and CapitaLand own East Asia, which has the remaining 60% interest in the joint venture. But the two sides have been unable to work together. “We are disappointed that these legal proceedings had to be initiated,” said New Cotai Chief Executive David Friedman. “However, after making exhaustive efforts to resolve the situation amicably, we believe we had no choice but to take this step to protect our investment and Macao Studio City.” The latest lawsuit comes after a Hong Kong court in July threw out a US$2.39 billion suit by East Asia against New Cotai and Mr Friedman, calling the claims “untenable.” East Asia, which wanted to renegotiate the terms of the joint-venture agreement, had alleged that New Cotai and its directors failed to cooperate on the casino project, hindering its development. However, the judge said there is“a good arguable case”regarding a separate US$88.6 million claim against Oaktree and Silver Point “for inducing New Cotai to breach” a share-purchase agreement. Mr Friedman said at the time that New Cotai would “vigorously defend the remaining claims.” The lawsuits follow the US investors’ offer to buy out eSun’s stake in the Macau project at HK$1,200 a square foot in July 2008, according to Dow Jones Newswires ’ sources, who added eSun had offered to buy out the US group’s stake in the project at HK$400 a square foot late last year. The Macau government has also said it could take back land from developers who fail to proceed with their projects, which raises further doubt about the future of Macao Studio City. Head of Asia for Harrah’s resigns Harrah’s Entertainment’s top executive in Asia left the company last month, leading to speculation that Harrah’s has probably given up its hopes to operate a casino in Macau. Mr Chen was responsible for developing Harrah’s business in Asia, though the company has thus far failed to gain a foothold in the region. Following his resignation, Mr Chen has begun a year-long sabbatical. “I was offered a position in Las Vegas at Harrah’s which is great but I need some time off and they agreed to it,” Mr Chen told Macau Business magazine. Harrah’s lost out on a bid for one of two Singapore casinos in 2006. Harrah’s spent US$577.7 million in 2007 to buy a 175-acre golf course in Macau near the Cotai Strip. The company hoped to place a Caesars-branded casino on the site, but Macau decided not to grant any more gaming concessions. Prior to his position in Asia, Mr Chen was a corporate director and executive associate to Harrah’s Chairman and CEO Gary Loveman. Tabcorp to spin off casinos Tabcorp Holdings, Australian biggest gambling company, plans to spin off its casinos into a separate company from its betting shops as it raises US$425 million in an entitlement offer. Investors will get a share in each company on a 1-for-1 basis, in a split expected to be completed in July 2011, Melbourne-based Tabcorp said in a statement last month. In September, Larry Mullin, CEO of Tabcorp’s Casinos Division, told Inside Asian Gaming of the company’s ambitions to attract more high rollers from Asia to play in its casinos. Rendering of Macao Studio City Tabcorp’s Star City Hotel & Casino in Sydney