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Tickers: RCL, SNOW

EVENTS

  • Oct 15: LVS 3 earnings 4:30 pm , pw 12611335
  • Oct 16: Hedgeye cruise pricing survey (mid-October)

COMPANY NEWS

GENTING UK – Phil Ivey has lost his case against a British casino he accused of improperly withholding his winnings.  Britain’s High Court ruled that Genting Casinos UK does not have to pay him the 7.7 million pounds (USD12.4 million) he was seeking.  He claims he won the money during two days of playing baccarat at Crockfords, a Mayfair casino that is part of the Genting group, in August 2012.

RCL– is offering two new sales in one. Book any Royal Caribbean cruise (excluding Quantum of the Seas or Anthem of the Seas) before the end of October, and you can take advantage of these two offers: 1) Buy one guest, get one guest for 50% off; and 2) When booking air accommodations through ChoiceAir, get an additional 5% off the first and second guests. The new cruise deal is good for bookings made between October 2 - 31, 2014 on all ships excluding Quantum of the Seas, Anthem of the Seas and all China departures. 

SNOW – Steamboat Ski Resort is suing Utah tourism officials, claiming a $1.8 million campaign designed to lure tourists in the lucrative winter sports industry away from Colorado violates their Ski Town, U.S.A. trademark because Salt Lake City is marketing itself as Ski City US. 

Takeaway: The battle for skiers and marketing identity intensifies.

INDUSTRY NEWS

Japan's Gaming Enabling Legislation – (Reuters) Contrary to recent stories, Japan's pro-casino lawmakers are set to tweak a proposed bill on casino legalization to address concerns of a possible spike in gambling addiction, but have agreed to not propose banning Japanese nationals from casinos

Takeaway: We look forward to moving beyond the talk and posturing and finally having floor debate commence.

Macau Golden Week Jewelry Sales(Macau Business Daily) Chow Sang Sang Holdings International Ltd. saw sales in its five jewelery stores in Macau rise more than 10% during National Day Golden Week, with more than 90% of customers hailing from the mainland.  By comparison, Chow Sang Sang sales in Hong Kong being declined 6% to 8% during the period, negatively impacted by the Occupy Central movement.

Takeaway: A sales increase of up 10% seems disappointing given Mainland Chinese visitation increased 17% during Golden Week.

Indiana Gaming Law Changes Sought – Leaders from Indiana’s ailing gambling industry pleaded their case before lawmakers Wednesday, looking for ways to attract more customers and beat back competition from out of state that has sprung up in recent years. Three of their top requests are for lawmakers include: 1) to allow riverboat casinos to move ashore,  2) allow table games two racinos, and 3) eliminating the tax on free play. 

Takeaway: Regional gaming operators seeking relief from the cannibalization of new land based casinos in Ohio and well as video gaming in Illinois. 

Best Western Launches Brand Extensions – announced plans for two new brands: Vib, a lifestyle hotel concept targeting millennial travelers; and BW Premier Collection*, a soft brand.  The company’s global pipeline includes more than 400 properties, 35% of which are in North America. Half of the North American pipeline are new-build hotels and include 26 Best Western properties, 106 Best Western Plus hotels and 10 Best Western Premier properties.

Takeaway: Another hotelier attempts to court millennials.

Atla Remains a No Boarder Mountain – Earlier this year a group of snowboarders filed a discrimination lawsuit against Alta, claiming they were being turned away not because they present a risk to skiers with whom they share the terrain but because they are perceived as being rowdy and obnoxious. A federal judge dismissed the suit, basically saying that the right to snowboard is not guaranteed by the equal protection clause of the Constitution. The only other U.S. resorts that ban snowboarding are Deer Valley, also in Utah, and Mad River Glen in Vermont.

Takeaway: Ski purists rejoiced Alta with the ruling the mountain will remain free of Boarders.

El Niño – the Climate Prediction Center agency of the National Weather Service said on Thursday, the El Niño weather phenomenon is expected to occur in the next 1-2 months and last into next spring in the Northern Hemisphere, although the El Niño will likely be less strong than forecasted three months ago.

Takeaway: We've been talking about El Niño since May and we hope for a stronger pattern which would result in warmer weather, a positive for consumer spending.

MACRO

Hedgeye remains negative on consumer spending and believes in muted inflation, a Quad Four set-up.  Following a great call on rising housing prices, the Hedgeye Macro/Financials team is 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.