Tickers: PENN, CZR, GENTING, GTECH, CCL, NCLH, RCL
- Dec 20: Trump Taj Mahal Closing
Today's Headline Story
Regulators meeting bankers in January – According to the SCMP, the note sent out by the Monetary Authority on December 16 tells Macau banks that the January meeting will explain the "live monitoring system" that will allow the Ministry of Public Security to to view transfers using the China UnionPay card, and that the note also asks the banks for a list of information on "high-risk businesses" using the China UnionPay system, such as stores selling jewelry and wine.
A senior gaming insider tells the SCMP that the crackdown appears to be the real deal, and "it's not just the VIP junket operators who bring in the high-rollers who are nervous."
Takeaway: China government may be supportive of Macau but GGR growth is clearly not a concern.
PENN/CZR/GENTING – The Gaming Facility Location Board chose sites in Sullivan, Schenectady and Seneca counties and decided not to recommend a fourth license amid an increasingly saturated gambling market where consumers have more options closer to home. The NY winners:
- Montreign Resort Casino will be built in the Catskills town of Thompson. The $630 million project will include 2,150 slots, 61 table games, a 391-room hotel, indoor waterpark, golf course and entertainment village including restaurants and retail shops.
- Its developer, Empire Resorts, operates through a subsidiary, the nearby Monticello Casino & Raceway. Montreign The Rivers Casino & Resort at Mohawk Harbor in the city of Schenectady will be part of a larger redevelopment effort at a formerly blighted riverfront site. The $300 million project will include a hotel, a high-end steakhouse, 66 gambling tables and more than 1,100 slot machines.
- Lago Resort & Casino, a $425 million project in the Finger Lakes town of Tyre in Seneca County, will include 2,000 slot machines. It was the largest contender in the Finger Lakes-Southern Tier region.
Takeaway: This was a major disappointment for the big operators, particularly Genting who was a front runner. Selecting 3 casino sites instead of 4 is the right move given the saturated gaming environment.
GENS – Genting Singapore today repurchased 12.2 million shares (38% of today's trading volume) for S$13 million. Cumulative shares repurchased year-to-date = 143,561,000 or 1.2% of the outstanding shares. Following today's share repurchase, the total shares outstanding = 12,104,575,298.
PENN– Hollywood Casino Toledo has won approval for an outdoor smoking deck with 34 slot machines. Similar areas have been approved in Horseshoe Cincinnati and Hollywood Columbus.
GTECH – offers to buyback its €750M of Subordinated Interest-Deferrable Capital Securities. GTECH also declared a €0.75 interim dividend payable January 2015.
CCL – announced the new President of its Carnival Cruise Lines brand will be CLIA’s current CEO, Christine Duffy. Duffy’s appointment takes effect Feb. 1. She succeeds Gerry Cahill, who retired in November.
NCLH – Norwegian Escape, due to cruise the Caribbean year-round from Miami in November 2015, will feature two Planks, that let guests walk eight feet out over the edge of the ship. The expanded sports complex will have five zipline-style Sky Rails, including one that will loop out over the side of the 4,200-passenger ship. In addition to a full-sized basketball court, Escape will have a bocce ball court, a mini-golf course themed to the Teenage Mutant Ninja Turtle characters, an expanded Aqua Park and a new tandem slide in the Aqua Park called Aqua Racer. In addition, Norwegian is also adding the line’s first dedicated nursery for children ages 2 and under. In expanding its “Guppies” program to children ages 6 months to three years, Norwegian will offer an active area for play time and age-appropriate activities and a separate space for napping.
LV visitation record– According to LVCVA, Las Vegas visitation has passed 40 million for the first time. And, with two weeks left in the year, visitation could reach 41 million. The previous record was 39.727 million visitors in 2012. More air service from Canada and Mexico was credited with part of the growth. Also, the National Finals Rodeo broke attendance records at 177,656 over its 10 days.
Takeaway: Visitation has grown in every month this year. Meanwhile, gaming revenues, YTD, have been flat.
2015 Notable LV openings – See details in the link below.
2015 Mainland holidays– The central government has announced that next year’s Lunar New Year holidays in the mainland will be from February 18 to 24.
Mainlanders will also be given four periods of three days off in a row, beginning respectively on January 1, April 5, May 1 and June 20. The seven days of National Day holidays will begin on October 1.
Custom border – new custom clearance policy between Macau and the city of Zhuhai come into effect today. The opening time for Macau customs and Gongbei will be extended an extra two hours each, people with effective identifications will be able to enter and leave from 6am to 1am in the next day.
Macau's Lotus border and Zhuhai's Hengqin border will open 24 hours for clearance of visitors as well as passenger cars. The Chief Executive of Macau Chui Sai On visited Wednesday the borders before the new measures were put in force.
Takeaway: As expected. A slight positive.
Golden Nugget Lake Charles Staking Its Claim – Golden Nugget Lake Charles is the manifestation of owner Tilman Fertitta's risky maneuver to obtain Louisiana's last casino license. Fertitta refers to his new location as one of the nation's most appealing markets, but he's next door to an established, successful competitor with identical amenity offerings.
Cuba – The White House's move toward normalizing relations with Cuba has fueled interest among American cruise passengers hoping to visit, although the agreement doesn't allow U.S.-based cruise ships to call. Lifting the ban on mass tourism would require congressional approval.
Takeaway: No doubt Cuba would benefit the cruise lines but that would take some time.
Hedgeye Macro Team remains negative Europe, their bottom-up, qualitative analysis (Growth/Inflation/Policy framework) indicates that the Eurozone is setting up to enter the ugly Quad4 in Q4 (equating to growth decelerates and inflation decelerates) = Europe Slowing.
Takeaway: European pricing has been a tailwind for CCL and RCL but a negative pivot here looks increasingly likely in 2015.