Inside Asian Gaming

The Asian Gaming 50 – 2013 Under Rowen Craigie’s able stewardship, Crown continues to deliver solid underlying results in operating conditions in Australia that have become increasingly challenging, while pursuing an aggressive strategy of expansion at home and abroad. Growing the business has been a struggle in the face of a sluggish domestic economy characterized by weak consumer sentiment. But James Packer’s right- Energetic, handsome, impossibly rich, Enrique Razon personifies the image Philippine gaming is eager to project of itself as an industry whose time has arrived. The same could be said of his new Solaire Resort & Casino—sleek, contemporary, brand- aware, affirmational—a total lifestyle play. PSX-listed Bloomberry, majority controlled by Mr Razon, spent US$750 million to complete Solaire’s first phase, which opened in March as the first of four destination-scale casino hotels envisioned for Entertainment City, a 120-hectare development zone along Manila Bay the government is sponsoring in hopes of driving regional tourism and providing badly needed jobs. Solaire is in the midst of a $450 million expansion slated for completion next spring to contribute more rooms and restaurants, a spa and pool, high-end retail, a showroom and a bayfront promenade to the effort. “The Philippines has more to offer actually than places like Macau and others,”Mr Razon has said. “There are many things to see here, and we’re coming from a very low base of visitors. It’s a tourist destination that has world-class gaming, so there’s something for everyone. That’s really what it has to end up as, not just gambling, 27 Rowen Craigie CEO and Managing Director Crown Limited 26 Enrique Razon Jr Chairman Bloomberry Resorts Corp. which is what Macau is.” Interestingly, his late father, the amiable and popular Enrique “Pocholo” Razon, who launched the family business with a successful bid for a Manila port franchise in the post- Marcos era, walked away from a partnership with Stanley Ho on a floating casino in the capital city. His son, however, not only believes Bloomberry will recover its $1.2 billion investment inside of five years, as he recently told Bloomberg , he put in $200 million of his own money. He sees Solaire as the “springboard”for a gaming expansion strategy similar to the one by which he turned that port franchise into a global conglomerate, International Container Terminal Services, with operations in 18 countries. It’s made him the Philippines’ third-wealthiest man, with a net worth estimated by Forbes at $3.6 billion, and at 53 the youngest of those at the top of the list. “We just have to build the brand,” as he says. He’s gone a long way toward achieving that in what friends and colleagues describe as an uncompromising insistence on the very best, which he amply displayed in hiring Global Gaming Asset Management, founded by the men who put Las Vegas Sands on the map in Macau and Singapore, to run Solaire and offering them an ownership stake in Bloomberry. “Ricky Razon knows how to take risks,” a Bloomberry director once said of him, “and he’s good at managing his risks.” hand man was able recently to report a creditable performance for the latest financial year, with pre-tax earnings at Crown Melbourne and Crown Perth up a combined 5%, adjusted for hold, on normalized revenue of A$2.77 billion, a 5.6% increase over 2012. Significantly, VIP turnover grew 7.8% against tough competition in Sydney from Echo Entertainment’s refurbished and revitalized Star, leaving no doubt that the company’s flagship Crown Melbourne is losing none of its appeal as a preferred destination among Asian high rollers. VIP revenue there was up more than 9% year on year. Combined revenue from main-floor gaming was up 3.6%. Revenue from hotels, F&B and other non-gaming attractions grew a robust 8.1%. Earnings on a per-property basis were strong at +7.1% in Melbourne, normalized for hold, and +6.4% in Perth, which has begun to reap the benefits of an expanded gaming floor and new restaurants, including a gourmet outlet targeting Crown’s sizable Chinese market. Work is progressing as well on a major hotel addition, Crown Towers Perth, which is scheduled for completion in 2016. Rationalizing costs has been a priority for him as well, at Crown Melbourne particularly, where he’s been able to improve the overall operating margin and still grow an expensive VIP business. In the midst of all this he’s found time to jet back and forth to Sri Lanka to nail down a joint venture for a $350 million gaming resort in Colombo and bring some touchy negotiations with the government over the design of the property to a successful conclusion. Closer to home, the tentative approval granted the company’s plans for a $1.3 billion super-resort in Sydney has overshadowed plans that are quite expansive in their own right to take on Echo in Queensland. There, too, Mr Craigie has been the point man, wooing state and local leaders on Crown’s pitch for a destination-scale casino in Brisbane that would leverage the company’s strength’s in the international VIP trade. 40 INSIDE ASIAN GAMING | September 2013