VIP junket operator packs Crown Macau with free-wheeling players

December 18, 2007 5:44 AM
by

share

Just how important junket operators are to the Macau gaming market was shown on Monday when most stocks declined in sympathy with the general market conditions but Melco PBL Entertainment Ltd. (MPEL) moved forward on positive news.

Ama International, considered to be a major provider of customers to the Macau market, began providing Crown Macau casino with players who immediately dug deep into their pockets to raise the revenue level at the property founded by the partnership of Australia’s James Packer and gaming veteran Lawrence Ho, son of Macau gaming guru Stanley Ho.

According to a client note issued by highly-respected gaming analyst Harry Curtis of JP Morgan Securities, the VIP players, provided to Crown Macau by Ama International, wagered between $384.8 million and $513 million during the first day and one-half of their involvement.

It was Curtis’ estimate that AMA may generate between $3.85 billion and $5.13 billion in monthly VIP turnover at the casino.

However, the analyst emphasized that his estimates were for the short term and that he was being more cautious for the future.

In trading on Monday, MPEL shares rose as high as $13.08 before settling at closing at $12.60, up $0.87 per share.

The timing of Ama’s involvement was considered a hindrance to Tuesday’s opening of the new MGM Macau, a $1.2 billion casino that is co-owned by MGM MIRAGE Inc. (MGM) and Stanley Ho’s daughter, Pansy.

Wall Street reacted on Monday by pushing down the price of MGM shares to $83.49 or $3.88 less than when the market opened.

Also taking a big hit were the shares of Wynn Resorts Ltd. (WYNN), another major Macau competitive.

Following a downgrade by analysts at S&P, whose ratings fell to "sell" from "hold," WYNN shares dropped $3.61 to $114.26.

It’s all politics

Political firewalls continue to prevent settlement of issues involving racetracks in both New York and New Jersey.

In New York, the racing franchise currently held by the New York Racing Association expires on Dec. 31. Also expiring on that day is an arrangement between the New Jersey racetracks and the Atlantic City casinos whereby gaming revenue is used to beef up racing purses.

So far, in New York, lawmakers are suggesting that a "handshake deal" could keep the horses running at New York’s Aqueduct racetrack until early next year when the legislature could come with a new franchise plan.

But in New Jersey, there has been no progress to encourage the horsemen. The casinos, suffering a decline in business because of nearby competition and the imposition of a partial smoking ban, are adamantly refusing to continue the purse funding plan.

So ferry sorry

Sheldon Adelson’s ferry service from Hong Kong to Macau’s Cotai Strip lasted just two weeks. It was shut down "temporarily" by Macau’s Intermediate Court.

Adelson’s plan, obviously a good one, was to ensure that he provided ferry service for his customers, who may or may not have been siphoned away by Wynn Macau, the Crown or Galaxy properties, or even one of Stanley Ho’s 16 casinos.

But his opponents got their dander up with the ferry plan.

Last week, a rival ferry operator, the Hong Kong North West Express, whined to the court that they had been trying to get a ferry license for months and couldn’t even get a hearing before Macau’s licensing authorities. Also, Adelson’s ferry didn’t have an open tender, a licensing requirement.

So, for the time being or until the court makes a further decision, Adelson’s customers will have to use another ferry service and make the trek from the mainland terminal to the Venetian Macao.

A Pittsburgh plus

"I think you will be very proud with what we are planning for Pittsburgh," said Don Barden, the Detroit entrepreneur who is building a $450 million casino in the western Pennsylvania city.

Barden, who owns Fitzgerald’s Casino in downtown Las Vegas, as well as casinos in Indiana, Mississippi and Colorado, says he will bring "a positive change" to Pittsburgh.

Groundbreaking for the new property took place last week and completion is expected in April, 2009.

Barden’s nearest competition will be the racino at The Meadows racetrack, the property being sold to James Packer’s Crown Casinos.

THE INSIDER: Fred Paquin, the chairman of Greektown Casino in Detroit, who doubles as police chief for the Sault Ste. Marie Tribe of Chippewa Indians, the owners of the casino, has resigned. He has been charged with assaulting a woman in August.

Local officials have advised Pinnacle Entertainment Inc. (PNK) it would not be an ethics code violation if the company provided the $200,000 to pay for the cost of a special election on Feb. 9 at which the voters will decide whether the company can build a casino.

Lorne Weil, the chairman and chief executive of Scientific Games Corp. (SGMS) has exercised options for 282,000 shares of his company’s stock, He notified the SEC that he paid $2.63 per share and sold them for prices ranging from $33.91 to $34.67.

WMS Industries Inc. (WMS) has elected Patricia M. Nazemetz to serve on its board of directors. She is the human resources and ethics officer for Xerox Corporation (XRX).

Shareholders of Penn National Gaming Inc. (PENN) have approved the company’s buyout by the partnership of Fortress Investment Group LLC and Centerbridge Partners. When the deal is consummated, shareholders will receive $67 per share.

International Game Technology (IGT) announced that it will pay a quarterly cash dividend of $0.14 per share on Jan. 7, 2008 to shareholders of record on Dec. 24.

Ameristar Casinos Inc. (ASCA) said construction delays would prevent the company from opening the new expansion of its Casino St. Charles Hotel and Spa in St. Charles, Mo., before year end as scheduled.

Casinos in Louisiana won $202.8 million in November, slightly more than the $199.7 million won in November, 2006.

Regulators in both Louisiana and Iowa have approved the takeover of Harrah’s Entertainment Inc. (HET) by the partnership of Apollo Management L.P. and Texas Pacific Group Capital.

FortuNet Inc. (FNET), a Las Vegas-based maker of gaming platforms, has named Kevin Karo as it CFO beginning on Jan. 4, 2008.

At Lakes Entertainment Inc. (LACO) Scott Just was named vice president of gaming and Diane Stone was placed in the open position of vice president of human resources.