Tickers: BYD, IGT, GLPI, PENN, WYNN, HLT, MHGC
- Sept 24: 9 a.m. Revel Auction
- Sept 24: MTN 11:30 am FYE 2014 Earnings Call
- Sept 24: Hedgeye Snakeye in Las Vegas
- Sept 29 - Oct 2: G2E Las Vegas
IGT, GTK AMEND MERGER
The amount of stock and cash to be paid to IGT shareholders is unchanged. However, the amendment eliminates the option for shareholders to elect an all-stock, all-cash consideration. All IGT shareholders will receive a combination of $13.69 in cash plus a number of shares in the new GTK, which will be equal to $4.56, divided by the dollar value of GTK shares prior to the deal closing.
Takeaway: This reduces the regulatory and disclosure requirements needed to complete the merger.
BYD – launched a new sports wagering application for mobile devices, allowing customers in Nevada to bet on college and professional games and events.
Takeaway: Boyd taking the next step in on-line gaming, but not likely to impact earnings.
IGT – Maryland has added a new game to its casinos, the "MegaHits" multi-state, progressive jackpot. Maryland is the fifth state approved by the Multi-State Lottery Association to participate, joining Delaware, Ohio, Rhode Island and West Virginia. The game will be available at Maryland Live! in Hanover, the Casino at Ocean Downs in Berlin and Hollywood Casino in Perryville. Megahits is a slot machine game played at selected casinos in the five states. Jackpots range from $100,000 to seven figures, with bets available in penny and dollar denominations.
Takeaway: The multi-state MegaJackpot link should help IGT
WYNN – Mixed messages regarding the investigation into the Wynn Cotai land transaction. GGRAsia is resporting “The relevant investigation is still underway,” the city’s Commission Against Corruption told GGRAsia on Wednesday. However, On Tuesday, Steve Wynn said the investigative team was satisfied with the information the company had provided on the deal and he further said he believed the investigation had been concluded.
Takeaway: In Macau, nothing is ever approved or closed until the governing agency or bureau says so.
HLT – announced Hilton HHonors, the loyalty programme for Hilton Worldwide’s 11 distinct hotel brands, a new partnership with AirAsia BIG. The partnership allows members of both AirAsia BIG and Hilton HHonors to earn BIG points and HHonors points when they stay at any of the more than 4,200 hotels and timeshare properties within the Hilton worldwide portfolio around the globe, said the companies in a joint statement.
Takeaway: Hilton building out its cross marketing relationships in an effort to promote guest visits to its growing platform of Asian hotels.
MHGC – Activist investor Ron Burkle announced his intention to nominate a board member following the resignation of Derex Walker.
Takeaway: Burkle keeping the heat on MHGC.
Cotai Construction Worker Transportation – (Macau Business) The Transport Bureau and three unidentified gaming companies are discussing the use of shuttle buses to take construction workers that live in the mainland from the Border Gate to their workplaces in Macau, according to the director of the bureau, Wong Wan.
Takeaway: The gaming operators attempting to make good with the Chief Executive as well as workers.
Macau Smoking Ban Investigation – (Macau Daily Times) Lawmaker Lei Cheng I and her colleagues from the Macau Federation of Trade Unions (FAOM) met with department heads from the Health Bureau (SSM) and the Gaming Inspection and Coordination Bureau (DICJ) yesterday to discuss the control of smoking inside casinos. The lawmaker requested government official to personally inspect the casinos and determine if the casino operators are trying to exploit a legal loophole, enlarging their smoking areas by partially converting their mass areas into VIP areas.
Takeaway: More pressure on the Health and Gaming Inspection and Coordination Bureaus to address the smoking ban concerns and safeguard the health of the gaming floor workers.
Hong Kong National Day Tourism – (SCMP) Hong Kong Inbound Tour Operators Association chairman Ricky Tse Kam-ting said the number of bookings so far was only half of last year's total, and assuming some last-minute bookings, he expected the total to be down 30%. The Chairman noted "There are a lot of good hotel deals in Malaysia [after two tragedies involving Malaysia Airlines planes]. The same goes for Thailand, which is rolling out bargains after political turmoil."
Takeaway: Mainland Chinese tourists pulling back on Hong Kong and shopping trips.
Chinese Tourism for Golden Week – (SCMP) The China Tourism Academy predicted that 480 million people would be holidaying during the period, an increase of 13% year-on-year
Takeaway: A positive trend, but Macau needs to capture some of this increase in tourism.
Cyprus Casino Draft Legislation – The Cypriot Government published the a draft of the law for a proposed integrated resort which include:
- The law provides for a casino of international standard, and a hotel or hotels of international standards exceeding the requirements for a five-star establishment under existing laws with at least 500 luxury rooms, at least 100 gaming tables and at least 1,000 gaming machines.
- Under the provisions, the operator can create four other premises ‘off-site’ with a maximum of 50 gaming machines per premises but no casino games. These premises must be located outside the district where the resort is based but cannot be sold, rented, transferred or assigned to anyone other than the resort operator. The integrated resort can stay open 24 hours a day, seven days a week and smoking will be allowed on the gaming floor.
- The initial fee for the casino resort will be determined as part of the initial offer for the 30-year license with 15 years of exclusivity for the operator. The annual fee to the state each year for the first four years will be €2.5 million, rising to €5 million for years four to eight, after which it may be reviewed upwards by the Cyprus Gaming and Casino Supervision Authority (CGC).
- On top of that, the government hopes to pick up 15%, a casino tax, from gross gaming revenues per month.
- The supply of gaming services – to be defined by inland revenue – will be VAT-free but the rest of the resort’s facilities will not be exempt.
Takeaway: Looks like a decent opportunity for suppliers but may be scaled down.
Singapore Punter Exclusion Broadens – (GGRAsia) Twenty-three non-casino gambling operators on Tuesday joined Singapore’s centralized self-exclusion scheme, which now covers social clubs with jackpot machines and sports betting clubs. Twenty-three of the city's seventy-three non-casino gambling operators on Tuesday joined Singapore’s centralized self-exclusion scheme, which now covers social clubs with jackpot machines and sports betting clubs. As of August 31, there were over 500 active non-casino self-exclusions, as compared to the 165,000 active self-exclusion applications covering casinos.
Takeaway: Singapore taking a stance on problematic gambling beyond the two integrated resorts.
Singapore Consumer Confidence Slightly Higher – In the latest ANZ-Roy Morgan Singapore Consumer Confidence Index survey, 27% of respondents said their family are better off financially now than a year ago, higher than the 20% in the previous survey, 33% expect their family to be better off financially in a year's time, up from 28% previously; however, 12% of respondents think they are now worse off financially than a year ago, also rising from the 8% in the previous survey.
Takeaway: While confidence is higher, it may not translate into a higher gaming budget, with so many restrictions surrounding the IRs.
Mixed fortunes for Genoa (Seatrade Insider)
After a record 1,050,085 passengers in 2013, Genoa’s Stazioni Marittime is expecting just over 800,000 passengers on around 200 calls this year.
Takeaway: European port gives a conservative outlook for 2015.
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.