Inside Asian Gaming

INSIDE ASIAN GAMING | August 2012 46 International Briefs Briefs we are generally pleased with this quarter’s results and remain on track to meet our fiscal year 2012 financial goals.” As part of the company’s US$1 billion stock repurchase program, IGT bought back some 23 million shares in the quarter. LVS Revenue Rises, But Earnings Miss Expectations LasVegasSandsCorp.ChairmanSheldonAdelsonwasbluntabout his disappointment with the company’s second quarter earnings, saying “our quarterly results did not meet my expectations.” LVS blamed lower hold on table games, higher provisions for accounts receivable at the Marina Bay Sands in Singapore, and unspecified elevated legal expenses for a 34.6% decline in net income and a 35.6% decrease in earnings per share for the three- month period ended 30th June. Still, LVS, which operates casinos in Macau, Singapore, the Las Vegas Strip and Pennsylvania, saw revenues increase 10.1% year-on- year to US$2.58 billion in the quarter. “Our financial results reflected solid revenue growth overall and significant cash flow in both Macau and Singapore, as well as the continued steady execution of our Cotai Strip development plan in Macau,”Mr Adelson said. The company’s net income for the quarter was US$240.6 million, comparedwith $367.6million in the second quarter of 2011. Earnings per share were 29 cents, compared with 45 cents in the prior year quarter. Analysts polled by Yahoo Finance expected earnings of 61 cents per share. “Generally, performance was poor but liquidity remains strong,” KDP Investment Advisors gaming analyst Barbara Cappaert said in a research note. “We do think that event risk remains high as market concerns about a slowdown in [LasVegas andMacau] have translated into weak stock performance for Las Vegas Sands shares.” In Macau, where in April LVS opened the first phase of the US$4.4 billion Sands Cotai Central, total revenues in the quarter were $1.48 billion, an increase of 22.3% compared with $1.21 billion a year ago. Net income in Macau, however, fell 40% to $160.5 million, mainly because of a $100.8 million non-cash impairment loss on two Cotai development parcels, lower VIP baccarat hold, and increased pre- opening expenses related to Sands Cotai Central. LVS’ revenue increase in Macau helped offset declines in its other IGT’s Revenue Rise Driven Partly By Social Gaming Slot machine giant International Game Technology (IGT) said its quarterly revenues rose 9% year-on-year in the three-month period ending 30th June, which constitutes the third quarter in the company’s fiscal year, due partly to the spare change social gaming customers spent to increase their virtual bankrolls at the company’s Double Down Casino, according to a report in the Las Vegas Review-Journal . IGT, which has headquarters in both Las Vegas and Reno, said overall revenues were US$532.8 million in the quarter. However, the company’s net income in the quarter fell 46.4% to $46.6 million, compared with $86.9 million in the same quarter a year ago. The company reported earnings per share of 16 cents, down from 29 cents per share in the third quarter of 2011. IGT’s net income has declined for three straight quarters. In the second quarter, net income fell 11.1% from the year earlier, while the figure fell 33.1% in the first quarter. Revenues from the company’s gaming operations division, which covers slot machines leased by casinos that share gaming revenues with IGT, as well as the interactive gaming business, grew 13% to $301.2 million in the third quarter. Without its interactive gaming business, the company said division revenues would have been flat. Users to the company’s Double Down Casino, which is found on Facebook, spent 25 cents per day on the website in the third quarter, up from 24 cents per day in the second quarter. Customers can play with virtual gaming chips for free but Double Down allows players to buy additional virtual tokens for a fee. IGT bought Double Down Casino for $500 million in January. According to IGT, Double Down had 5.2 million monthly users at the end of June, a decrease of 7% when compared with the end of March. IGT Chief Executive Officer Patti Hart said Double Down allows the company to place its slot machine titles in front of potential casino customers who play the games for free in a social setting. Instead of being seen by 1,000 people per day in a casino, the game was played by more than 1 million people per day worldwide. “Our goal is to place multiple titles on multiple platforms,”Ms Hart said. IGT said it sold 8,200 machines in North America during the quarter, 67% more than the same quarter last year. However, the average price per slot machine was US$13,146, roughly $1,200 less per machine than a year ago. Ms Hart said on a conference call with investors and analysts that the reduced price per machine was because of the number of lower- priced video lottery terminals sold during the quarter. “Our third-quarter revenue growth and strong cash flows are reflective of our diverse business model,”Ms Hart said in a statement. “Against the backdrop of an inconsistent global economic recovery, Double Down—Facebook’s largest interactive casino Revenue decline—the Palazzo (left) and The Venetian (right) in Las Vegas