TICKERS: MPEL, GTECH, CCL
- Feb 2: Cod Manila Grand Opening
- Feb 3: GLPI 4Q CC
- Feb 3: WYNN 4Q CC
- ; pw: 57961245
- Feb 12: MPEL 4Q CC
- (1866) ; pw: MPEL
- Feb 17: MGM 4Q CC
- ; pw: 8870181
Macau – The minister for Social Affairs and Culture in Macau, Alexis Tam Chon Weng restated the government’s determination to ban smoking anywhere in casinos to protect the health of gaming employees and patrons. The Health Bureau (SSM) is aiming to introduce a full smoking ban in casinos. This would mean that that smoking would be prohibited not only on mass gaming floors, but also within VIP rooms. Current smoking lounges would also be forced to close if the bill is approved.
He added that SSM is hoping to finish revising the legislation and to submit it to the Legislative Assembly in the first half of 2015.
According to a govt survey, over 70% of Macau residents back a full smoking ban. The survey also indicates that about 80% of casino workers agree with a full smoking ban that includes VIP rooms; about 85% of surveyed tourists also said that they are not against a full smoking ban.
Mr. Tam revealed that the government met with the executives of casino operators to understand their views on the full smoking ban. Casino companies are hoping that the government will allow them to keep current smoking lounges, like those found in international airports which provide smokers with a separate smoking area. However, the Secretary stressed that the government stands firmly in its plan to implement a full smoking ban, meaning that smoking will be prohibited within the entire premises of casinos’ resorts, and that smoking lounges will therefore not be allowed.
Takeaway: We have warned for months of a possibility of a full-scale smoking ban. It looks like it will become a reality although implementation is not imminent.
MPEL - has announced that it will give all its employees, except managers, a bonus equivalent to one month’s pay. An internal notice also says the company will promote some 1,300 employees or transfer them to its new Studio City casino-resort. The notice says Studio City will employ 9,000 workers when it opens.
Takeaway: At least it's not a 14th month bonus. No doubt labor costs will be higher in 2015.
Donaco Int - Boutique casino operator Donaco International Ltd has agreed to acquire the Star Vegas Resort and Club casino property in Poipet, Cambodia, for a consideration of US$360 million. The deal would be closed by April. Donaco is currently a one-property operator, running the Aristo International casino hotel in Lao Cai, in northern Vietnam.
GTECH - signs $800M term loan; further reduces size of bridge loan for IGT acquisition. Bridge load size now at $4.9B from original $10.7B
CCL (Princess) - A limited-time payday deals offer covers discounts on four cruises popular with UK holidaymakers and has been made available to encourage consumers to book over the next few days after they get paid for the first time in 2015.
Macau – Statistics and Census Service (DSEC) indicated that visitors on package tours totaled 1,190,000 in December 2014, up 35.8% YoY. Package tour visitors from Mainland China surged by 51.5% YoY to 991,000, with 328,000 coming from Guangdong Province, up by 17.4%.
Takeaway: No slowdown in the low-end, family, non-gaming oriented tourists coming to Macau
Singapore fines - The Casino Regulatory Authority (CRA) has taken action against Marina Bay Sands and Resorts World Sentosa for admitting patrons who are not supposed to be in the casinos. MBS was fined a total of S$65,000 for six such instances between July 1 to Dec 1, 2013. The heavier fine of S$45,000 was imposed on MBS because it failed to keep out two persons under exclusion orders from its casino. The remaining S$20,000 penalty is for it allowing four patrons from overstaying their 24-hour entry levies.
Maryland - The Maryland Lottery and Gaming Control Commission unanimously voted Thursday to allow Casino Baltimore and Maryland Live! Casino at Arundel Mills Mall to each reduces their count of slot machines by 300, bringing the number of slots at the Baltimore facility down to 2,200, and the pool of machines at Maryland Live! to 3,922. The reductions will be completed by April 1.
Takeaway: Slot play per property may be topping out at Maryland due to a swarm of new competition lately.
Cuba - Cuba Cruise offers ways for US citizens to cruise to Cuba
Takeaway: Still many restrictions for US cruisers to travel to Cuba but at least cruise lines are thinking about it now.
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.