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Tuesday, March 25

  • CCL to report earnings pre-market, conf call at 10am EST ()

Wednesday, March 26

  • PENN at TAG Spring Consumer Conference
  • Melco Crown Extraordinary General Meeting
  • Melco Crown Board Meeting  

Thursday, March 27

  • None    

 Friday, March 28

  • None  



GALAXY (27.HK) – several news stories indicate Galaxy Entertainment Group is looking to expand its gaming empire with a possible acquisition based on Lui Che Woo’s comment that he is looking for opportunities in foreign markets, including the United States. 

Takeaway:  We wonder if he would like to pursue single asset or platform acquisition strategy… Could Borgata be on the block or Fontainebleau Las Vegas?


RCL – After holding off for several weeks to see how events developed in the Crimea peninsula between Russia and Ukraine, several cruise lines have changed their Black Sea itineraries to avoid the ports of Odessa, Sevastopol and Yalta.  For its June 12 sailing, Azamara Quest (RCL) has replaced the three cities with Bartin in Turkey, and Volos and Nafplion in Greece, as well as adding an extra day in Istanbul.  Oceania, Regent Seven Seas, Windstar and MSC also have substituted ports in other countries, including Turkey, Romania, Georgia and Bulgaria.  

Takeaway:  Minor itineraries for Azamara.  So far, CCL brands, Cunard and Costa, are staying put.


CZR – The Nevada Supreme Court ruled Harrah’s Operating Co. is entitled to a $4.4 million refund on the use tax paid on two planes purchased out of state.  The gaming company had sought an $8.6 million refund on four aircraft it purchased in 2006 to fly employees and customers on business trips. The court said two of the planes were used in interstate commerce and qualified for the use-tax exemption.

Takeaway:  When a company owns as much real estate as CZR’s, one way or another the State of Nevada will get their fair share…  


Intralot – the Wyoming Lottery announced the selection of Intralot as its gaming vendor, the company tasked with furnishing convenience stores and other retail outlets with the games of chance.  Early last week, Intralot signed a new 10 year technology supply agreement with the Irish Lottery.  Intralot, was founded in 1992, is headquartered in Athens Greece and trades on the Athens Stock Exchange under the ticker “INLOT”. 


Takeaway:  Seems this company has quietly taken market share from its US-based counterparts.


OEH – announced the completion of a $657.0 million senior secured credit facility, consisting of a $552.0 million seven-year term loan ("Term Loan B") and a $105.0 million five-year, multi-currency revolving credit facility via Barclays Bank and JPM Morgan Securities. The Term Loan B is comprised of a $345.0 million U.S. dollar-denominated tranche and a EUR150.0 million euro-denominated tranche ($207.0 million as of the closing date). The Company intends to utilize the Term Loan B proceeds to refinance all of the funded debt of the Company and its subsidiaries other than the debt of Charleston Place in South Carolina, a consolidated variable interest entity with separate non-recourse financing.


Takeaway:  This was the next step in the transformation from the old Orient Express to the new Belmond.  This company is worth watching given the recovering European consumer and continued health of the wealthy consumer.




Macau Visitor Arrivals – Visitor arrivals increased by 8% YoY to 2,560,560 in February.  Mainland visitors totaled 1,714,776 (+14% YoY), with 821,844 (48% of total) traveling to Macao under the Individual Visit Scheme, up by 9% YoY.  Visitors from the Republic of Korea and Japan surged by 33% and 23% YoY respectively.  The average length of stay of visitors stood at 1.0 day.

LEISURE LETTER (03/24/2104) - MACAU1

Takeaway:  Solid visitation growth so far in 2014 but the trend higher spend per visitor continues to drive most of the gaming revenue growth.

Changi Airport passenger movement

Singapore's Changi Airport total passengers grew 6.3% YoY in January but declined -0.2% YoY in February.

LEISURE LETTER (03/24/2104) - changi

Takeaway:  Disappointing visitor growth for Singapore mass market

Las Vegas Gambler Budget Survey Signals Increased Spending Bloomberg

According to a survey by LVCVA, the average gambling budget of Las Vegas visitors rose 10% to $530 in 2013, the biggest increase since 2005.  “We look at the gaming budget more as a psychological indicator of visitor mindset. It does reflect a positive trend of attracting visitors setting aside growing budgets for the gaming part of their Vegas experience," said Kevin Bagger, the authority’s senior director of strategic research and analytics.

Takeaway:  Meanwhile, actual slot play continues to decline. We attribute the trend to demographics and not attitudes.

American Gaming Association (AGA) – AGA Chairman Jim Murren, who is also MGM Resorts Chairman and CEO, wants the group to dial down its lobbying and advocacy efforts on behalf of legalizing Internet poker because the activity is fracturing the membership of the Washington, D.C.-based trade organization.  Murren, started a two-year term as chairman in January, said the group still supports passage of federal legislation that would legalize, regulate and tax Internet poker.


Takeaway:  This is an interesting change of face for an industry and Chairman who are both usually very vocal proponents of gaming expansion. 


Las Vegas Downtown – two recent items:  First, Hsieh’s Downtown Project bought the shuttered Western Hotel casino from Tamares Real Estate for $14 million.  The Project plans to invest $200 million in real estate, $50 million in small businesses, $50 million in education and $50 million in tech startups through the Vegas TechFund.   For more details see http://downtownproject.com/   Second, this past Friday evening, Scott Cohen set ablaze his “Life Cube”  which was a take his Burning Man sculpture transferred into an urban setting.  “Life Cube” was a 24-by-24-foot plywood cube, painted and filled with notes from thousands of people.


Takeaway:  The rebirth of Downtown and the downtown locals continues.  We will further explore this topic during our upcoming trip to Las Vegas on April 7 & 8.



Cruise Ships Stuck at Sea, In Port After Fuel Barge Collision Cruise Critic

Carnival Magic and RCL's Navigator of the Seas are stuck outside of Galveston Bay, while Caribbean Princess has been stranded at the port of Houston overnight after a collision between a tanker and a fuel barge partially sunk the barge and released more than 150,000 gallons of fuel into the bay.  Carnival Magic should be returning to port later today. Passengers may choose to cancel without penalty. However, refunds will not be provided for flight changes, hotel accommodations, meals, transfers or other incidental costs resulting from the delay. 

Takeaway:  Minor but media happy incident for the cruise lines 


Hedgeye remains negative on consumer spending and believes in more inflation.  Following  a great call on rising housing prices, the Hedgeye Macro/Financials team is turning decidedly less positive. 


Takeaway:  We’ve found housing prices to be the single most significant factor in driving gaming revenues over the past 20 years in virtually all gaming markets across the