Inside Asian Gaming

42 INSIDE ASIAN GAMING | August 2013 REGIONAL BRIEFS Kerzner Coming to Hainan South Africa casino giant Kerzner International is teaming with Chinese conglomerate Fosun to build a destination resort on China’s popular tropical island of Hainan. The property will be located in Sanya, the island’s main tourist town. It is priced at US$1.6 billion and will include a 1,300-room hotel carrying Kerzner’s Atlantis brand. A 2016 opening is planned. Atlantis is well-known in the Bahamas as a resort with gaming and in Dubai as a luxury non-gaming hotel on the emirate’s artificial Palm Island. Fosun, based in Shanghai, has extensive holdings in property, pharmaceuticals, insurance and mining. Casinos are not legal on Hainan, or anywhere in China outside Macau, and earlier this year, the local government shut down a bar that was offering casino-style games that paid winnings in the form of prizes. The bar has since reopened, according to Reuters . Kerzner isn’t concerned, says Chief Executive Alan Leibman. “We have been very successful with and without gaming within our business. It is nothing we have anticipated in why we are building.” It doesn’t seem to matter to the Chinese either. Hainan recorded more than 22 million overnight stays through the first eight months of the year, most of them by domestic travelers, and the island is in the midst of a building boom, with more than 200 hotels already operating in Sanya and more on the way. New Macau Hotel, Maybe a Casino Speaking at the recent groundbreaking for a new hotel near the Macau Jockey Club, an executive with the hotel’s management company said the property could contain a gaming component. The US$256 million Hollywood Roosevelt Hotel is expected to open in 2015 with 300-plus hotel rooms on about six acres next to the Taipa racetrack, not far from the booming Cotai resort district. “If you want to have a nice property where you can relax, where you can go to a nice swimming pool, enjoy restaurants, party but also go to a casino, this is all what Hollywood Roosevelt is about,”said Christophe Vielle, chief executive of GCP Hospitality Management. The developer, a Macau-based entity called Yoho Group, did not address the casino issue, according to local news reports, but investment brokerage Union Gaming Research Macau says the possibility of gaming at the site is “highly unlikely” since the land is not zoned for it and the developer has no affiliation with any of the six casino concession holders, or at least none that have been publicized to date. At the same time, the government is believed to be reluctant to approve new agreements that allow third parties to operate casinos in partnership with the concessionaires in exchange for a share of revenues. SJM and Galaxy Entertainment are the only two involved in such agreements. SJM licenses a third-party casino at the Jockey Club and another at a nearby hotel. Melco Crown Entertainment owns two machine gaming venues nearby under its Mocha Clubs brand. With or without gaming, Hollywood Roosevelt will be good for the market, said Union Gaming. “We believe that Macau, in general, is currently undersupplied in terms of hotel rooms as witnessed by occupancy rates in excess of 90% on a regular basis. As such, we believe the addition of new room supply should be viewed positively.” PAGCOR Looks to a Stronger 2014 The expansion of the Philippines’ resort casino industry is expected to boost both PAGCOR’s revenues and its sizable contributions to government revenues. The Bureau of Treasury forecasts its take fromthe state- run Philippine Amusement and Gaming Corporation to grow by 26% in 2014 as more foreign players visit the country, lured by the destinations at Manila’s new Entertainment City gaming zone. PAGCOR is required by law to remit at least 50% of gross revenues to the Department of Finance, which is counting on PHP14 billion (US$325 million) from the operator/regulator next year, up from this year’s projected PHP11.1 billion. Nationwide, PAGCOR operates 13 Casino Filipino-branded casinos and about two dozen machine gaming venues. The corporation’s payments through August were slightly lower than in the same period in 2012 as revenues were essentially flat year on year at PHP21.06 billion. But Chief Operating Officer Jorge V. Sarmiento said the agency expects a 6% increase in revenues next year to PHP45.47 billion—60% of which will come from gaming operations, he said, with a portion driven by fee income generated from Entertainment City. The first resort at the complex, Solaire, opened in March and will total more than US$1 billion in capital investment when an expansion is completed. The second, City of Dreams Manila, is scheduled to open next summer at a cost exceeding $1 billion. Two more are licensed and are expected to open in the next two to three years. Solaire so far has attracted 733,200 visitors and created 10,300 jobs, Mr Sarmiento said. Rendering of the planned Atlantis resort on Hainan Solaire Resort & Casino