LEISURE LETTER (04/22/2015)



Bwin - The Board of bwin.party announced that the New Jersey Division of Gaming Enforcement ('DGE') has awarded each of the Group's wholly-owned subsidiaries, bwin.party entertainment (NJ) LLC and bwin.party (USA) Inc., a Casino Service Industry Enterprise Licence under section 92(a) of the New Jersey Control Act.  


Norbert Teufelberger, CEO of bwin.party commented "Receipt of our full licence in New Jersey marks an important milestone for our US business. We believe that the path to regulation across the United States is inevitable and expect that other states will soon follow."


Genting Singapore - has rewarded president and chief operating officer Tan Hee Teck (photo) with performance shares worth an eye-popping $29 million at current prices to keep him from being poached. The vesting of these shares is subject to pre-agreed service and performance conditions. Not all the shares may be awarded if targets are not met.



RCL - Royal Caribbean brand president Michael Bayley intimated the policy of 'no last-minute discounting' was likely to be introduced in the UK. “I’m unable to make any forward statements, I can only talk about what we have done…but it’s in the US at the moment, and we’re committed to it” he said.


Meanwhile, Bayley hinted the UK could play host to another Quantum-class ship - even if only for its naming. “I could see a Quantum-class ship being based in the UK - not in the near future I don’t think, as we’ll have Anthem in the US and Quantum and Ovation in China, but we may build more Quantum ships,” he admitted.


“We’re still discussing plans for Ovation of the Seas. We haven’t decided what the itinerary will be from the yard to China, and where we’ll name it - we could do it in the UK, or maybe China,” he said.


Takeaway: We're skeptical RCL will be able to completely eliminate last minute discounting and sail with more empty cabins, which will adversely impact onboard spend.





Graft - The Macau Commission Against Corruption is investigating two staff members from the city’s Civil Engineering Laboratory for allegedly accepting bribes regarding a road next to a casino project.


A statement from the commission didn’t specify the road, or which casino property was adjacent to it. The inquiry is also said to be investigating the role of two people connected to an engineering firm.  There was no indication in the graft buster’s statement of any wrongdoing by the nearby casino.



Gaming tables - DICJ revised Q1 2015 table count to 5,704 from 5,630 previously due to an error. Table count in Q4 2014 was 5,711.


China lottery March results

LEISURE LETTER (04/22/2015) - F

Takeaway: Scratch continuing to decline in China this year




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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