Inside Asian Gaming

INSIDE ASIAN GAMING | September 2011 28 Asian Gaming 50 – 2011 Most people will tell you that if you want to get to SteveWynn on Macau issues you need to go through Linda Chen. Among her core responsibilities are heading up marketing and strategic development, and it is said she has not only the chairman’s ear but his complete trust. MrWynn values her so highly that in 2010 the company bought a US$5.4 million house in Macau for her use according to an SEC filing in March. Her standing is only likely to rise as the company looks to expand with a second Macau resort—on Cotai. While women are generally under-represented in the upper levels of management in Asian gaming markets, Ms Chen has some notable company in top jobs. They include Pansy Ho at MGM China and STDM, Angela Leong at SJM Holdings and Constance Hsu at Mocha Clubs. All are listed elsewhere in this edition of the Asian Gaming 50 . Another rising name is Li Wing Sze, who oversees gaming operations in Macau for junket consolidator Amax Holdings. But none of these women can yet claim the breadth of experience and institutional knowledge that come with having worked in Las Vegas marketing. Ms Chen can. Ms Chen and Mr Wynn go back a long way. Indeed, she was an eyewitness to the founding of the new Las Vegas, having been involved in opening The Mirage in 1989 and MGM Grand in 1993. She worked with Mr Wynn on the opening of Bellagio in 1998 and served as executive vice president of international marketing. She stayed on at MGM Mirage through 2002 as executive vice president international marketing, before rejoining her former boss in the run-up to the opening of Wynn on the Las Vegas Strip. She currently serves as a director of Wynn Resorts and president of Wynn Marketing, responsible for international marketing operations at the Vegas properties. Ms Chen holds a B.S. from Cornell University’s prestigious School of Hotel Administration and has studied at Stanford’s Graduate School of Business. She’s also cultivated connections in her homeland, mainland China. She’s a member of the Nanjing Committee of the Chinese People’s Political Consultative Conference (Macau). Following the successful opening last spring of the US$600 million Encore at Wynn, she was rewarded with a new 10-year contract. Employment agreements of such duration are rare in any industry, and this one stands as a powerful statement of the confidence in which Ms Chen is held by Mr Wynn, Wynn Resorts and the board. 12 (11) Linda Chen Chief Operating Officer Wynn Resorts (Macau) Director Wynn Resorts Ltd 13 (13) James Packer Co-Chairman Melco Crown Entertainment Three events this summer should dispel doubts about whether James Packer is in Macau for the long haul. First there was the announcement in June that Melco Crown Entertainment, his joint venture with Lawrence Ho, had acquired a majority stake in the unfinished Studio City resort (formerly known as Macao Studio City) on Cotai for US$360 million. Second, in early August the company confirmed its intention to pursue a dual listing of its shares—adding Hong Kong Stock Exchange membership alongside its Nasdaq membership—by the end of a year. That process is expected to include a US$400 million-US$600 million initial public offering (IPO) in Hong Kong. Third, on 25th August, MPEL announced second-quarter earnings that pleased the markets—a US$97 million reversal of last year’s net loss, on EBITDA that nearly quadrupled to US$216.3 million. These facts may explain why Mr Packer was keen to go on record denying he planned to sell his 33.4% investment in Melco Crown to fund a takeover of Australia’s Echo Entertainment Group—the Tabcorp Holdings spin-off consisting principally of Sydney’s Star City and Jupiters Hotel & Casino on the Gold Coast and two other Queensland casinos. Referring to Crown Ltd’s relatively small 4.9% equity participation in both Tabcorp and Echo, Mr Packer’s publicly- traded Australian flagship issued a terse statement in June stating it: “has no intention of increasing its interest in either company”. It would certainly be surprising to many if Mr Packer decided to relinquish his sizeable interest in Macau—the largest and fastest- growing casino market in the world—in favour of more exposure to the Australian market. Echo Entertainment has undoubtedly been busy working to expand the overall size of the Australian gaming market by bringing in high rolling Asian customers (it has deals with several Asian junket operators including Neptune Group in Macau). It is also energetically improving its product. This year, Echo began a A$1.6 billion revamp of its four venues. But even that sterling effort is unlikely to produce the volumes of play and levels of profitability available in Macau. That’s the case even though the states of Australia all have VIP gaming tax rates lower than the 39% imposed across the board in Macau. Crown’s Australian properties, Crown Casino Melbourne and Burswood Entertainment Complex in Perth—first-class gaming resorts by any standard—delivered results for the year ended 30th June that the company described as “mixed”. It was the US$34.9 million that Crown realised on its Macau investment that helped swing the company to a 15% increase in net profit. Crown is now trying to improve the future performance of the Australian operation by spending more than US$1 billion in debt financing on refurbishments and improved marketing at home. In Macau, the MPEL joint venture has recently localised its management. That has coincided with an improvement in financial performance. The 67% increase in net revenue MPEL posted in the second quarter (US$960 million) speaks to a steady upward trend in VIP volumes at City of Dreams (CoD) on Cotai and Altira Macau