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TICKERS:  MGAM, WYNN, HOT, NCLH

EVENTS TO WATCH

Thursday, May 1

  • HST Q1 – 10am
  • OEH Q1 – 10am , Passcode: 22074904
  • FCH Q1 – 12pm , Passcode: 28469900
  • WYNN Q1 – 430pm , Passcode:  17666834
  • BYI FQ3 – 430pm
  • EXPE Q1 – 430pm

Friday, May 2

  • April Employment Report
  • HT Q1 – 9am , Passcode: 1398938

Monday, May 5

  • Genting Singapore Q1 – 6am 

Tuesday, May 6

  • RHP Q1  – 10am , Passcode: 25122491
  • SHO Q1  – 12pm
  • TRIP Q1  – 430pm
  • DIS FQ2  – 5pm , Passcode: 36995300

Wednesday, May 7

  • STAY Q1  – 830am
  • STN Q1 – 4pm
  • CZR Q1 – 5pm , Passcode: 20337702

Thursday, May 8

  • PCLN Q1 – 730am
  • MPEL Q1 – 830am , Passcode: MPEL
  • CAR Q1 – 830am , Passcode Avis Budget
  • BEE Q1 – 10am , Passcode: 10895989
  • SGMS Q1 – 430pm , Password: SGMS

Friday, May 9

  • HLT Q1 – 10am , Passcode: 25981567
  • AHT Q1 – 11am

COMPANY NEWS

MGAM – Multimedia Games is buying PokerTek for $1.35/share or $13m.  MGAM expects the transaction will be neutral to diluted EPS in FY2015 and accretive to FY2016 EPS.  Merger will be completed in CY 2014.

Takeaway: E-tables is where the growth lies for the suppliers

 

Parx – (Allentown Morning Call) Parx Casino has won a legal victory that could lead to a tax reduction.  PA Supreme Court ruled that Parx's prizes given out in 2006/2007 such as cars, sports tickets and gift cards will not be taxed, saving Parx $1.1m.  The ruling might have set a precedent for all PA casinos but it is unclear whether the casinos can file appeals for past years

Takeaway:  Potential positive for PENN


WYNN – another Universal Entertainment defamation criminal complaint filing against Mr. Wynn

Takeaway:  Nothing new

HOT – announced Vasant Prabhu resigned as Vice Chairman and CFO to join NBC Universal as CFO.  During the transition, Vasant will continue with Starwood through May 30.  Alan Schnaid, currently SVP, Finance and Chief Accounting Officer, will serve as interim CFO effective immediately

Takeaway: Now we should find out who was holding back the stock buy back.

 

NCLH -  Launching a buy one, get one free deal.  From April 30 through May 11, guests who book on Getaway or Breakaway will receive a voucher for a complimentary 3-4 day bahamas cruise on Sky.

Takeaway:  A desperate promotion.  Norwegian is lucky to have some additional cost cuts in the bag; otherwise, net yields could have been a disaster this year.

MSC - 'We're not giving up on North America' USA Today 

According to Ken Muskat, executive vice president for Sales, PR & Guest Services at the European line's U.S. division, the redeployment of MSC Divina to Europe in 2015 was a function of significant weakness in pricing for summer cruises in the Caribbean that is affecting the entire industry.

"The summer continues to be a bloodbath for everybody" in the Caribbean.  We had planned for the ship being (in Miami) year-round. We had planned for it being in the Caribbean next summer, but given (the weakness in Caribbean pricing) one thing we strongly had to consider was do we want to stay in the Caribbean in the summer and be a (discount) price leader,"  Muskat commented.

Takeaway:  Telling of the severity of Caribbean discounting if MSC can't stay in the Caribbean market as a discount price leader.

INdUSTRY NEWS

NJ - According to a survey by CAMS, only 42-46% of credit cards used by players in the US accept online gaming accounts.  The low acceptance of credit cards is the single biggest holdback growth in New Jersey, said CAMS CEO Matt Katz said.

Takeaway:  Payment issues continue to plague the on line ramp in New Jersey but there are solutions.  


Internet Gaming - there is an increasing clamor regarding Native American tribes creating an interstate alliance to pursue internet gaming.  Outside California, many of the 255 tribes in the lower 48 states believe interstate alliances are crucial to efforts to leverage entry into online gambling and create viable gaming for rural America while also increasing competition for the 425 Indian casinos in 28 states.  California is seeking legislation to legalize intrastate internet poker for its 38+ million residents. 

Takeaway:  A push by Native American tribes to enter online gaming, might just be the event to cause the US Congress to revisit online gaming.


Hotel M&A - Apollo European Principal Finance Fund II bought 18 European hotels from Ivanhoe Cambridge.  Term were not disclosed.  The hotels include 11 in Germany, two in Spain, two in the Netherlands and one each in Austria, Belgium and France.  They operate under the Crowne Plaza banners, Holiday Inn and Holiday Inn Express IHG.

Takeaway:  Now if only HOT could get its act together.

El Niño -  the National Oceanic and Atmospheric Administration reports an increased likelihood of an El Niño during the fall and winter of 2014/2015.  NOAA's specific comment "ENSO-neutral is favored for the Northern Hemisphere spring 2014, with chances of El Niño increasing during the rest of the year, exceeding 50% by summer."

Takeaway: with a >60% probability for El Nino during fall/winter 2014/2015, we could see much easier "weather comp" during Q4 2014 and Q1 2015 - especially for the regional gaming stocks.

MACRO

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 US.