Inside Asian Gaming

January 2012 | INSIDE ASIAN GAMING 45 Briefs public offering on the Hong Kong Stock Exchange, reportedly raising US$1.5 billion. Singaporean fined S$6,000 for using wife’s ID to enter casino A Singapore man who used his wife’s identity card to enter one of the city’s casinos—after he had earlier applied to be excluded as a problem gambler—has been fined a total of S$6,000 (US$4,593). His wife was additionally fined a total of S$3,000 after pleading guilty to two charges of abetting him to use her government- issued identity card to enter Resorts World Sentosa casino in December 2010. The man, Philip Oh Choon Aik, persuaded his wife to take part in the card-swtiching scam after he had applied to Singapore’s National Council for Problem Gambling for a casino exclusion order. Macau’s gaming growth eclipses that of the US Macau’s 2011 casino revenue total surged 42% year-on-year to a record 267.87 billion patacas (US$33.48 billion)—surpassing the combined casino revenues produced by the top 20 US commercial casino markets in 2010. “To put this year’s gross gaming revenue and growth rate into perspective, total gross gaming revenue in Macau will be approximately 5.5 times the gross gaming revenue generated on the Las Vegas Strip, while the rate of growth in Macau will be roughly 10 times the rate on the Las Vegas Strip,” Union Gaming Group’s Macau- based principal Grant Govertsen wrote in a research note. According to the American Gaming Association’s annual State of the States, the nation’s top 20 commercial casino markets produced almost US$31 billion in gaming revenues in 2010. The Strip accounted for almost US$5.8 billion of that. Through October, Strip gaming revenues are up 4.8% over the equivalent ten months of 2010. Many American regional gaming markets have also seen varying degrees of gaming revenue increases. But it’s been nothing like Macau’s expansion, although Macau did slow in December 2011 to 25% year-on-year—the city’s smallest monthly revenue increase in 2011. Expectations are for Macau’s casino revenue to grow 20-30% this year. The only major new casino opening in Macau this year (scheduled for mid-April) is set to be the initial phases of Las Vegas Sands Corp’s Sands Cotai Central, including multiple hotel-casinos and 5,800 hotel rooms. “We continue to believe investors’ concerns over a slowdown in the Macau VIP market are largely overblown and expect the late second quarter opening of Las Vegas Sands’ Cotai Central to serve as an impetus to growth within the mass market segment,” Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski told investors. The Sands Cotai Central project is the only new development in Macau scheduled for the next few years. MrWieczynski predicted the company’s market share in the region will continue to expand. The project is expected to include more lower-price hotel options than the Venetian Macau or Sands Macau . “Given the additional convention space at Cotai Central, we believe LasVegas Sands will be able to attract higher-margin business to a market that… has primarily been a gambling-only destination,” Mr Wieczynski said. Analysts said infrastructure improvements, such as expanding the border gate between Macau and mainland provinces and completion of a light rail system between Macau and Guangzhou, would help mass market visitation. “The VIP segment should remain strong through at least the early part of 2012, as our channel checks suggest VIP demand is growing, not shrinking,”Mr Govertsen said. Growing visitor numbers to Cambodia bode well for NagaWorld’s mass revenues Cambodia’s Ministry of Tourism reported a 13.5% year- on-year growth in October visitation, reported Union Gaming Research Macau in a recent note. On a year-to- date basis, visitation has grown 15.4% and now exceeds 2.3 million people. Union Gaming stated: “Importantly, visitation to Cambodia via overland routes (primary method of arrival for nearly all visitors to NagaWorld) grew 18.3% year-on-year in October, which is in line with the year-to-date increase of 18.1%. We note that in October, Vietnam accounted for 23.2% of tourist arrivals to Cambodia (highest share). In addition, visitation fromVietnam grew 26.1% year- on-year in October, representing a 400 basis point increase over the country’s year-to-date average of 22.1%.” According to Union Gaming Research Macau: “In our view, the continued strength in inbound visitation to Cambodia, particularly from Vietnam, benefits NagaWorld’s mass market segment.” It forecasts a 40% year-on-year growth in mass market gross gaming revenue for Naga in the second half of 2011, as well as a 62% growth in slot revenue during the same period. Union added: “Furthermore, we expect double digit revenue growth to continue in 2012, driven in part by increased visitation to NagaWorld and the launch of their own luxury shuttle service to/ from Ho Chi Minh, as well as the opening of sales offices in various major metro areas in Indochina.” Rendering of the soon-to-open Sands Cotai Central NagaWorld