LEISURE LETTER (01/13/2015)



LVS Cheung Che Kin, a businessman from Hong Kong, has sued Marina Bay Sands (MBS), claiming that he suffered loss and damage when he was not allowed to take over a baccarat game from a combined pool of chips he shared with a friend at MBS.  MBS denies that Mr Cheung has suffered loss and damage and has filed a counter-claim for an outstanding credit amount of $1.96 million, plus 12 per cent interest, from Mr Cheung. No date has been set for the trial yet.

Article HERE

Takeaway:  More credit headaches to deal with for MBS


GTECH – Ontario State’s newly launched GTECH Interactive powered online gambling portal PlayOLG.ca has faced several issues since its launch on Friday 9 January, which has left many Ontario online gambling consumers frustrated. Ontario consumers took to social media channels to report website issues regarding game loading times, onsite glitches and flawed geolocation access services which would not allow some customers to register with gambling portal.

Article HERE


Amaya Gaming is evaluating non-binding proposals from certain persons for its B2B land-based gaming solutions business, Cadillac Jack Inc

Takeaway:  Amaya acquired Cadillac Jack in Oct 2012 and has been thinking of strategic alternatives for that business since Oct 2014. 


Chinese Strategic Holdings Limited – has been in negotiations with a Macau Nasdaq-listed company involving a proposed casino on Tinian Island in the Northern Marianas.  Steps include 1) assistance in the possible application for a gaming license of and for the new hotel complex; (2) facilitation of gaming license applications through its experience, professional knowledge, and understanding it gained through global licensing applications; (3) rendering of consultancy services relating to negotiations between the government and regulatory agencies in the CNMI; and (4) providing advice and enabling TRI to fulfill and satisfy compliance and/or regulatory duties and responsibilities and comply with licensing conditions and requirements imposed by the CNMI government.


The plan, according to Townland Consultants, includes two world-class golf courses, 20-30 6-star high-end villa s, mid/high-end 4-5 Star hotel with 300-400 rooms, a retail / dining village, an agricultural cultivation zone which will provide quality food for the hotels on the island, among other attractions.

Article HERE 


Junkets –  Recently, there has been more lower quality VIP players, meaning gamblers that bet less money and pay their debts much later – with some not paying at all. There is also data that seems to suggest that credit flow and junket revenues are diverging with the latter significantly underperforming the former.

Article HERE

Takeaway:  We dismiss any analysis trying to compare trends in country credit flow vs a specific segment of a localized gaming industry over a short period of time


Alan Ho arrested – Hotel Lisboa’s executive director Alan Ho (a longtime senior executive at SJM and the nephew of SJM founder and Macau gambling mogul Stanley Ho) was sent in handcuffs to the Public Prosecutions Office Monday morning along with five associate suspects, for running a multi-million-pataca prostitution ring that was based at the hotel.

Article HERE

Takeaway:  It seems nobody is off limits - not even a member of the Ho family.


China lotteries – country's main lottery, the Welfare Lottery, achieved officially confirmed sales of 205.96 billion yuan ($33.6 billion) in 2014, up 16.67% YoY 

Article HERE

Takeaway: Positive for SGMS


Singapore visitation – Nov 2014 visitation fell 3.6%, the 9th consecutive monthly decline.  Mainland China was the lone bright spot, rising 10% YoY in Nov - its 2nd consecutive monthly gain off of a very low comp.  Indonesia and Malaysia visitation remain weak, falling -8% and -19%, respectively in November.


Meanwhile, Singapore's Changi Airport Group reported passenger traffic declined 1% in November.


LEISURE LETTER (01/13/2015) - s1


LEISURE LETTER (01/13/2015) - 2


Takeaway:  Given the number of airline incidents and tighter regulations recently, it's no surprise that S'pore visitation has declined in 2014. This could affect mass revenues in Q4.


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. 

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