TICKERS: SGMS, RCL
EVENTS
- Feb 10:
- IGT extraordinary shareholder meeting vote
- HOT 4Q CC 10:30am
- (1866) ; pw: 67514695
- Feb 12:
- MPEL 4Q CC 8:30am
- (1866) ; pw: MPEL
- PNK 4Q CC 10:00am
- ; pw: 68847867
- BYD 4Q CC 5:00pm
- ; pw: 5378350
- Feb 17: MGM 4Q CC 11:00am
- ; pw: 8870181
- Feb 18:
- HYATT 4Q CC 11:30am
- ; PW: 62845475
- MAR 4Q release 5pm
- Feb 19:
- HST 4Q CC 9:00am
- Feb 25: Prestige analyst day (9:00am-12pm)
HEADLINE STORY
China – Hua Jingfeng, a deputy bureau chief at the Ministry of Public Security, said illegal gambling remained a problem even though the government was "forcefully keeping it in check". "Some foreign countries see our nation as an enormous market, and we have investigated a series of cases," Hua told reporters.
"A fair number of neighboring countries have casinos, and they have set up offices in China to attract and drum up interest from Chinese citizens to go abroad and gamble. This will also be an area that we will crack down on."
Casinos are not allowed to legally advertise in mainland China, but operators have skirted around the issue by promoting the resorts where the casinos are located. Hua said the government was also seeking to crack down on a "small number" of police and government officials who are guilty of collusion in covering up gambling and providing an umbrella of protection for it.
Takeaway: Manila, South Korea, Cambodia, etc. might not get the big boost expected from incoming Chinese gamblers
COMPANY NEWS
Novomatic- The gaming equipment supplier says that according to preliminary data, revenue for 2014 generated by its three holding companies totaled EUR3.8 billion (US$4.4 billion), +8% YoY.
The firm said in a statement: “During the financial year 2014, the group‘s continued growth was based on the intensification of activities in the European core markets such as the U.K., Spain, Italy and also Holland, where through acquisitions the company has achieved a position as market leader.
SGMS - As part of its association with global gambling operator bwin.party, Scientific Games has initiated the distribution of a selected group of its online slots to the residents of New Jersey. From February 2015, the registered players of Borgata Casino and the New Jersey arm of PartyPoker will have access to SG video slots.
RCL - arranged financing for its fourth Oasis-class ship at STX France, which cut steel for the newbuild this week. The unsecured term loan is for an amount up to the US dollar equivalent of approximately €931m. The financing is fully guaranteed by France's export credit agency, Compagnie Française D’Assurance pour le Commerce Extérieur. The 12-year loan, to be assigned to Royal Caribbean once the ship is delivered in the second quarter of 2018, will amortize semi-annually. At the company's election, interest will accrue at a fixed rate of 3.72% or at a floating rate equal to LIBOR plus 1.1%.
INDUSTRY NEWs
Japan – Japan’s government has tapped Innovation Group to aid in the study as part of a team of industry advisors led by Deloitte Touche Tohmatsu.
The research will include advice for implementing gaming regulations, practices from similar jurisdictions, background on problem gaming programs, anti-money laundering approaches and the financial impacts from competing jurisdictions.
MACRO
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.
