Inside Asian Gaming

inside asian gaming July 2014 8 Cover Story Not the Only Game in Town Tinian Dynasty Hotel and Casino has struggled since opening in 1998, Rota’s casino closed within months of opening, and Saipan plans a new US$2 billion integrated resort. None of that’s discouraging more casino plans for the Northern Marianas Islands. Multiple sources blame Tinian Dynasty’s operating and marketing deficiencies on previous owner Hong Kong Entertainment. New owner Mega Stars Overseas says it has spent $40 million since taking over last year, part of a $100 million-plus investment plan that includes renovating Dynasty’s 404 guest rooms, adding 80 villas targeting high rollers, a spa, scuba center and water park. It also wants to bring in “world class hotel chain operators” to run the property. Tinian Dynasty also plans to sign deals “with gaming promoters that have extensive networks of agents and sub-agents throughout China and Asia and leverage on their business experience with gaming markets in Macau and other Asian countries so as to secure a sustained flow of VIP gaming players to Tinian,” Mega Stars Chief Financial Officer Henry Leung says. Mega Stars forecasts $315 million in gaming revenue in 2017 for a fully redeveloped Tinian Dynasty with 40 VIP tables, 10 mass-market tables and 50 machine games. It projects average VIP roll of $458,000. In addition to partnering on a Saipan gaming license bid, Mega Stars also wants to build another casino resort on Tinian with 1,000 rooms, a 36-hole golf course, cultural center and shopping. It is in negotiations to lease a site on public land. By Muhammad Cohen Tinian Dynasty Hotel and Casino Bahamas boomed,” he says. But now those areas have numerous convenient casinos. In Asia new or expanded gaming jurisdictions such as Macau, Singapore and the Philippines reduce the appeal of CNMI casinos, he says. However, the Bahamas and other Caribbean destinations are currently seeing investment fromChinese companies aimed at Chinese travelers, and CNMI hopes to get in on that action. “Outbound tourism among mainland Chinese is soaring, they are looking for options beyond Hong Kong and Macau, and Saipan could be one of them,” Nicholas Niglio, CEO of Macau junket promoter Neptune Group, says. “Whether this particular project is successful remains to be seen—so much depends on the quality of the product and transportation issues.” According to the Marianas Visitor Authority, visitors frommainland China to CNMI grew 43% to 112,570 in the fiscal year ended September 2013, making them the commonwealth’s third-biggest source market. Overall visitor arrivals rose 11% to 433,736 over the same period. This year, in February and again in May, China supplanted Japan and South Korea as CNMI’s top source of visitor arrivals. In a presentation to potential investors, Mega Stars estimates Chinese tourist arrivals will reach 176,000 this year and 251,000 next year. MACAU MONEY MAGNET? With growing Chinese tourism, low taxes and an uncertain regulatory environment, Macau junket promoters seem like prime candidates to invest in CNMI. “Junkets have so much money, and you see them moving into casino management across Asia,” Mr Gushin notes. Other sources add that Macau junket promoters want to diversity away from Macau. The other Saipan applicant, Best Sunshine International, reportedly has ties to Macau junket promoter Hengsheng Group through its Hong Kong-listed parent, Imperial Pacific International Holdings. Hengsheng declined to