Two
successful bidders for Macau gaming licenses could be on the verge of losing
their lead positions, according to a report in the Hong Kong Mail newspaper.
Reportedly,
the dispute stems from requests by Steve Wynn and Galaxy Casino for a five-year
extension to their 15-year contracts as a condition for signing the
agreement.
The extensions, the two bidders said,
were needed to compete with the third successful bidder, casino magnate Stanley
Ho. Ho has already signed his agreement with Macau.
Macau officials, according to the newspaper
report, have notified MP Entertainment ”” the partnership of Mandalay Resort
Group (MBG) and Park Place Entertainment Corp. (PPE) ”” to be prepared to step
in if either Wynn or Galaxy fail to sign the 15-year agreements by April 1.
Wynn and his minority partner, Wong Chi
Seng; Galaxy Casino, which is owned by Las Vegas casino owner Sheldon Adelson of
The Venetian and his partner, Yip Wai Chau, and the 80-year-old Ho were selected
from among the 21 original bidders for three gaming licenses in Macau.
For more than two decades, the only
gambling in Macau was operated by Ho. However, his gaming properties have been
described as smoke-filled decrepit buildings that would be overshadowed by Las
Vegas-styled casinos envisioned by Wynn and Adelson.
Conditions improving
Economic conditions in Las Vegas are
improving faster than expected, says Jason Ader, chief gaming analyst for Bear
Stearns.
He added that “the recovery from post
9/11 lows continues to track ahead of our expectations and we believe that if
the economy continues to show signs of improvement that our current estimates
could prove conservative.”
In a weekly equity research paper, Ader
and his associates said they were analyzing the results released by McCarran
Airport which showed that the average daily air seats to Las Vegas decreased
5.7% or 3,706 seats to 61,658 during the month of March.
“Las Vegas continues to show signs of
sequential improvement in almost every operating metric as evidenced by
March’s air seat data and our recent room rate surveys, which we consider two
important indicators of forward demand for Las Vegas,” the analysts said.
The company maintains “buy” ratings
on Harrah’s Entertainment Inc. (HET), International Game Technology (IGT), and
MGM MIRAGE Inc. (MGG), among the large-cap companies, and Ameristar Casinos (ASCA)
and Hollywood Casinos Inc. (HWD), in the small-cap category.
Kennedy
supporter
Congressman Patrick Kennedy’s
connections to Las Vegas gaming interests has come under criticism in his home
state of Rhode Island where he is facing at least three congressional
challengers.
His
opponents have called on him to cancel a $500-per-person fundraiser being hosted
by Jan Jones, senior vice president for communications at Harrah’s
Entertainment Inc. (HET).
Kennedy has refused to cancel the
event, saying his position of having the voters decide the question of building
a casino is well-known.
Coming
to his defense was Jones who explained that last year when the gaming industry
was looking for help in battling the NCAA’s efforts to ban betting on college
games, Kennedy played a role in winning support for Nevada’s position.
Detractors
have suggested that Kennedy has been using his ÂÂÂpolitical influence to push
Harrah’s gaming interest in Rhode Island, even though the expected casino
builders, the Narragansett Indian Tribe, has chosen to have Boyd Gaming
Corp. (BYD) as its gaming partner.
Commenting on the situation, one of
Kennedy’s challengers suggested that at a
minimum, “there is an appearance of a quid pro quo.”
No
dice for MGM MIRAGE
MGM
MIRAGE Inc’s (MGG) effort to acquire a riverboat ÂÂÂlicense near O’Hare
Airport in Chicago was shot down last week with an announcement by rejected the
gaming company’s proposal.
However,
the board did not completely rule out the Rosemont location as a potential site
for the state’s 10th and final riverboat license. Rather, the board said it
“is considering its own counterproposal.”
In
an attempt to end a stalemate regarding a license previously owned by Emerald
Casino, MGM MIRAGE had suggested it would pay $615 million to buy out the
previous owners of the controversial license, allowing sufficient funds for the
state and local authorities.
There
was no indication when the state would make known its counterproposal plan or
when further progress will be made in issuing the final license.
More
slots approved
General
Manager Danny Adkins of the Tri-State Racetrack & Gaming Center in
Charleston, West Virginia, had his wish answered last week when the state’s
Lottery Commission approved the addition of 1,000 new slot machines at the
track.
“Now,”
said Adkins upon hearing the news, “we can truly become a destination resort
in the center of the state.”
Because
of its location in the center of
West Virginia, the Tri-State Greyhound Track in the town of Nitro does not
attract as many out-of-state gamblers as do the state’s other pari-mutuel
facilities.
“We
will be able to add more family entertainment in addition to expanding our
gambling center,” Adkins stated. He said the track had plans for an outdoor
amphitheater for large concerts and “some sort” of sports venue.
President
ousted
The
row between JCC Holding Company, Inc., principal owner of Harrah’s New Orleans
Casino, and its 49% partner, Harrah’s Entertainment Inc. (HET), grew more
heated last week with the announcement that the casino’s board had ousted its
chairman, Phil Satre.
Of
course, Satre continues as chairman and CEO of HET.
The
dispute erupted when, according to JCC, Harrah’s Entertainment attempted to
gain a majority of the JCC board of directors and take control of the company.
Meanwhile,
Paul Debban was elected to replace Satre as JCC chairman.
The
Insider
Alliance Gaming Corp. (ALLY) has
announced a 2-1 stock split to take effect on April 8 for shareholders of record
on April 3.
Salomon Smith Barney last week started
coverage of Alliance Gaming with an “outperform” rating.
Bill Schmitt, chief gaming analyst for
CIBC World Markets, has reiterated his “strong buy” rating for Boyd Gaming
Corporation (BYD). The company said last week it is experiencing a strong
quarter and that earnings should be between $0.27 and $0.30 a share.
Coast Resorts Inc. says it has closed
on an offering of $100 million in bonds. The senior subordinated notes were
priced to yield 9.5%.
Station Casinos Inc. (STN) announced it expected to take a charge on write-offs related to the Fiesta Rancho Casino in North Las Vegas. The write-offs will be made to comply with new accounting rules.
