Inside Asian Gaming

March 2015 inside asian gaming 43 In Queensland, where it operates Brisbane’s Treasury Casino and Jupiters on the Gold Coast, its bid to build a multibillion-dollar casino and entertainment complex in the capital is on hold after a shock election result on 31st January plunged the state into limbo. Echo revealed it has spent A$9 million so far on its joint venture bid to redevelop the Queens Wharf precinct, which pits it against a bid from Crown and Chinese property developer Greenland Holdings. Mr Bekier said the tender was on hold until a government was formed. Mr Bekier said the half year finished “well ahead of guidance provided at the AGM” in October. The company forecast normalised EBITDA of A$245 million to $260 million, and delivered $261 million. Of that, $183 million came from The Star. Normalised revenue—which discounts the volatility associated with high-roller play—rose 28.3% to $1.2 billion. The VIP rebate business, which refers to high-rollers who commit upfront to gambling large amounts in return for subsidized gambling and luxurious accommodation, posted a 97% rise in normalized revenue to A$332.2 million, with total bets of $23.2 billion. Mr Bekier said Echo had been immune to the slowdown in VIP gambling activity that has plagued Macau. Citi analyst Michael Goltsman said despite some deterioration in margins, due to a greater proportion of costly VIP business and a higher tax bill, the result was a strong beat of consensus at the net profit level. “While the company’s strong operational execution suggests further growth to earnings, we view the shares as being fairly priced due to the risk overhang from the pending Brisbane decision,” he said in a note. Wynn Macau Suffers Earnings Fall and Resort Delay Wynn Macau’s fourth-quarter adjusted property earnings before interest, taxes, depreciation and amortization fell 36% year on year to US$241.2 million. That compared with the $249 million median estimate of nine analysts surveyed by Bloomberg News . “We think negative earnings revision will continue; management sounded downbeat on the near-term outlook for Macau,” wrote Morgan Stanley analysts led by Praveen Choudhary. The delay of Wynn Resort’s US$4.1 billion resort on Macau’s Cotai Strip is also a concern. The company was told last month by its construction contractor that the project won’t be finished in time for the Lunar New Year in February 2016 because of the timing of permits. Wynn said the company hasn’t been able to hire all the construction workers it wanted. “I do believe that for all of Chinese businessmen, there is at the moment a bit of uncertainty as to what the future will hold, because so much of everything in China depends upon the policy of the central government,” Steve Wynn, the company’s chairman and chief executive officer, said on a conference call after the earnings announcement. Wynn Resorts reported fourth-quarter profit and sales that missed analysts’ estimates as revenue in Macau declined. The Macau unit contributed two-thirds of the group’s revenue in the fourth quarter. Table games turnover in the VIP segment dropped 40% year on year to $20.7 billion for the fourth quarter. Mass-table win—or revenue from mass-market gamblers—fell 15% to $249 million in the quarter. The company’s January mass business in Macau rose 26% year on year. “The changes in China have had a negative effect on all of the top-end business, whether that means retail top-end like Rolex and Louis Vuitton or whether we’re talking about the high-end gaming and junkets in the VIP section,” Mr Wynn said. Crown Exits as Sri Lanka Pulls Plug on Casinos REGIONAL BRIEFS Sri Lanka’s new government has rescinded the previous administration’s approval of casinos for three resorts planned for the capital of Colombo. Themovewaswidely expected as fulfillment of a campaign promise given by new president, Maithripala Sirisena, to cancel the licenses, which had been granted by his predecessor, Mahinda Rajapaksa. Mr Rajapaksa, who governed the country virtually unopposed for 10 years, supported gaming expansion as a means of boosting the island nation’s economy through increased tourism and foreign investment. However, the plan was never popular with influential religious leaders of the country’s Buddhist-Sinhalese majority and was criticized heavily both by opposition parties and segments of Mr Rajapaksa’s own coalition partners, who feared the industry would undermine traditional values and lead to a variety of social ills. Mr Sirisena defeated Mr Rajapaksa in a general election held on 8th January. The casinos canceled include one slated for a US$400 million resort hotel planned by Australia’s Crown Resorts, to be built in the capital’s popular tourist core. A company spokesman responded: “Crown Resorts respects the [government’s] decision and on that basis the project would not be going ahead.” Casinos are also gone from a $300 million resort proposal called Queensbury, backed by local company Vallibel One, which owns two of Sri Lanka’s three existing casinos, and an $850 million resort called Water Front Properties proposed by hospitality giant John Keells Holdings, the country’s largest publicly traded company. The new prime minister, Ranil Wickremesinghe, said gazette notices that gave tax concessions to the projects had been amended. “We have decided to ban such approval for casinos,” he told the parliament. “But they can conduct all other activities,” he said, referring to hotel and residential apartments included in the projects. In the meantime, all existing casino licenses also will be reviewed and in future will be restricted to a specific area of the island, cabinet spokesman Rajitha Senaratne said. Sri Lanka’s new president, Maithripala Sirisena