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Tickers: BYI, BYD, ISLE, PNK


  • July 25: PEB 2Q call 9am
  • July 29: 
    • WYNN 2Q 8:30am ; pw: 67663320
    • NCLH 2Q 11am ; pw: 63063248
    • IGT 2Q release
    • GLPI 2Q call 10am
  • July 30: 
    • MGAM 2Q earnings
    • MAR 2Q call 10 am : , pw: 59383825
  • July 31:
    • HST 2Q call 10 am:
    • BEL (OEH) 2Q call 10 am: , pw: 68627603
    • H 2Q call 11:30 am:  , pw: 21721745.
    • BYD 2Q call 5pm:  , Passcode: 2654057
  • Aug 1:
    • HLT 2Q 10 am: , pw: 67361605


BYD – announced it appointed Chris Gibase to the newly created position of Senior Vice President and Chief Marketing Officer.  Gibase will direct all of Boyd Gaming's marketing functions, including digital and print media, advertising, B Connected, E-Commerce and event marketing.  Boyd Gaming also announced that it has named two executives – Steve Schutte and Vince Schwartz – to the position of Senior Vice President, Operations. Schutte will have day-to-day oversight of four properties – Diamond Jo Casino, Diamond Jo Worth, Sam's Town Shreveport and Sam's Town Tunica. Schwartz will be responsible for the operations of three properties – the IP, Treasure Chest. Gibase, Bogich, Schwartz and Schutte will report directly to Paul Chakmak, Executive Vice President and Chief Operating Officer. and Amelia Belle

Takeaway: BYD senior management needs to cut SG&A, not increase overhead.

27:HK Galaxy – launched the "World Baccarat Master of Macau" baccarat tournament featuring a total prize pool of HKD41 million.  The eight month tournament offers monthly qualifying tournaments and will culminate with the Master Championship Tournament in April 2015 with a top prize of HKD 5million and a champion's diamond ring.  Galaxy also plans other "World Master" events including a World Slot Master of Macau tournament.

Takeaway: Galaxy providing strong marketing and promotions programming to help generate interest in Galaxy Macau and thus drive GGR growth.


GENK:MK – Genting Bhd is rumored to file a bid to operate a casino at Spain’s BCN World. Genting could be one of the bidders for one of the six casino licenses to be issued for the project.  Today was the deadline to present a bid.  Each casino licensee would have to invest a minimum of EUR300 million (US$403 million) in BCN World.

Takeaway: Building a global gaming empire one market at a time. Better hope the gaming tax rate is very low.


GTK:IM – GTech Canada, a unit of Italian GTech SpA, won a contract to provide its Intelligen VLT information system to Greek lottery operator OPAP SA.  GTech is expected to connect its system to OPAP and concessionaire VLTs beginning in late 2014, following system certification by the Hellenic Gaming Commission.  GTech said it was chosen from among four vendors in an open procurement process to provide the system “to monitor and control up to 35,000 VLTs in OPAP’s planned new network”.

GTECH has signed a seven-year contract with the Tennessee Lottery which it expects to yield $130 million in total revenue.  Under the deal, a unit of GTECH will provide new lottery systems and related services starting from April 2015. The contract could be renewed for another seven years after that.

 Takeaway: Two nice wins for GTECH

ISLE – Chief Legal Officer, Edmund Quantmann sold 5,870 shares of ISLE stock via a 10b5-1 sale on Tuesday, July 22nd at an average price of $8.22 and now owns 68,302 shares of stock.


BYI – announced a contract to provide systems, including its iVIEW DM picture-in-picture technology and business intelligence software, to connect the 3,100 slot machines at the Muckleshoot casino in Washington. 


PNK – Orange Capital again calls for PNK to split into an OpCo/PropCo REIT. Orange believes such a transaction would result in shareholder value of $35 to $42. Orange noted how the firm is "unsatisfied with the (PNK) company's response to date."

Takeaway: Given our work and analysis in the gaming REIT conversion area, we doubt the potential value creation as outlined by Orange. We further believe a tax-free spin-off is NOT an option available to PNK. 


IMF Speaks Out on Macau – The IMF executive board commended the Macau authorities’ focus on promoting non-gaming services, and encouraged them to explore more opportunities, including via broader integration with mainland China, further financial development and greater public investments in infrastructure and human capital. The IMF also encouraged the Macau officials to introduce more anti-money laundering measures to safeguard integrity in the gaming sector, in particular to “bolster customer due diligence requirements” in line with international standards and “to strengthen oversight of all market players, including junket promoters and their associates”.

Takeaway: Where was this advice five years ago?

Macau Airline Service – Macau International Airport Co Ltd is considering launching new routes to the northern cities of Xian (Shaanxi province) and Shijiazhuang (Hebei province) in the coming months and is in talks with airlines regarding the new service, including Air Macau. Also, later this year Xiamen Airlines will initiate new direct service linking Macau and Tianjin. 

Takeaway: Helping the gaming operators reach further into the outlying provinces for new gamblers.

UnionPay – UnionPay International announced that overseas consumption by Hong Kong and Macau UnionPay card-holders increased by 49% YoY in 1Q 2014.  A total of some 15 million UnionPay cards have been issued in the two Special Administrative Regions. The compound annual growth rate of UnionPay transactions rose by more than 64% and the local card issuing business jumped by almost 100%, doubling the number of cards issued to clients. UnionPay's business in Hong Kong and Macau has been developing as the fastest districts outside mainland China since the company launched its business in the two Special Administrative Regions in 2004. Finally, the number of the company’s cooperating merchants in the two regions has increased 7.6-fold over that of 10 years ago. 

Takeaway: Just when the UnionPay money laundering headlines were going away, the Company gives regulators more food for thought.

BCN World – The BCN World project threatens to follow in the footsteps of Sheldon Adelson failed EuroVegas. BCN World's main promoter, businessman Enrique Banuelos, requested an adjournment to purchase the land where the new complex will sit. According to local media reports, Veremonte, the investment vehicle of known Valencian businessman, signed a contract with La Caixa to secure a preemptive purchase of Lumine Mediterranean Beach & Golf Community, a subsidiary of the Barcelona bank which also owns the land adjacent to Port-Aventura.  However, that contract expires next Wednesday and Banuelos has no liquidity to pay 377 million euros to complete the acquisition. Thus, Banuelos asked the bank to modify the conditions of the agreement and delay closing until December 31.  La Caixa accept the postponement, but instead modify its acquisition conditions, as a price increase.

Takeaway: BCN World is not actually located in Barcelona but rather about 70 miles down southwest of Barcelona, between Salou and Tarragona Spain

SugarHouse Casino Expansion – SugarHouse casino, located near the Delaware River in Philadelphia, broke ground on a $164 million expansion. The expansion, which is expected to open next year, will more than double the size of SugarHouse, to 260,000 square feet from 108,000 square feet, not including a 600,000-square-foot, seven-story parking garage that will give poker players, in particular, quick access to the tables. A 30-table poker room is part of the expansion plan.

Takeaway: 700 new slots could be shipped in 4Q 2014


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.