THE M3: WYNN/SJM: VIEWS ON 2ND HALF; COTAI JOBS; BALLY ASIA SLOTS; SMOKING BAN ON GGR; MANILA IPO

The Macau Metro Monitor, June 10th, 2010


WYNN MACAU SAYS PACE OF H2 GAMBLING REVS TO SLOW Reuters

Wynn Macau COO Linda Chen said that she believes GGR will exceed the forecast of 30% growth but still sees a slowdown in the 2nd half of the year.  Chen said she expects the VIP market to grow at a faster rate than the mass market segment, contrary to comments from SJM (see note below).  She does not think the weak stock market and tight monetary policies could affect VIP gambling revenues in the second half.

Meanwhile, Steve Wynn said its mega resort on Cotai could break ground next year.  He added that the project could have 1,200 to 1,300 slot machines and be ready by 2014.  Wynn said he will be "splitting the headquarters" of Wynn Resorts between Las Vegas and Macau.

SJM SAYS VIP GAMBLING MARKET COULD EASE IN H2 Strait Times, Dow Jones

Frank McFadden, president of SJM's joint venture and business development division, said gaming revenue growth will slow in the 2nd half as wealthy Chinese take a hit from a weak stock market and tight monetary policies.  "We see a softening in the VIP market and continued growth in the mass market. The VIP gaming market has been driven by a rising asset base in China and a rising stock market in China."  McFadden believes if VIP slows down, even though mass continues to accelerate, overall gaming revenues in June will decline sequentially.  McFadden said the 2nd half could see 60% of SJM's revenues come from the VIP segment, down from 65% in the first quarter. 

SJM continues to take a 'wait-and-see' approach on Cotai.  McFadden expects SJM to have around HK15 billion in cash by the end of 2010.  He stressed that the strong cash position would help the company secure a prime location on Cotai if the government takes back some of that land.  "We're a bit cautious because the level of equity that you'll need to invest will be high in order to compete," he said.  If SJM does build a property on the Cotai Strip, it could predominantly be geared towards gaming.  McFadden said that "95% of spend here is gaming when the visitors come.  It would be arrogant to think that by building what they call an integrated resort, you can change the consumer behaviour of 1.4 billion people." He added that he wasn't aware of any talks between SJM and Sands or Studio City about a land deal.


COTAI TO GENERATE 15,000 MORE JOBS IN 18 MONTHS Macau Daily Times

The Cotai integrated resorts will create “15,000 to 17,000 job opportunities in the next 18 months,” said CoD president Greg Hawkins. Hawkins said that City of Dreams currently has around 8,000 employees, while The Venetian has more than 10,000.  The vacancies could be good news for the 9,600 residents unemployed in Macau.

Hawkins said the SAR Government “has always been very open” to the demand for non-resident workers. The key will be getting the balance right."

Meanwhile, Galaxy IR, Peter Caveny, is optimistic on the Guangzhou–Zhuhai Intercity Mass Rapid Transit (MRT).  He predicts the rail will bring 400,000 people a day to Macau when it opens this November.

BALLY HIGH ON MACAU macaubusiness.com

Bally Technologies is targeting to supply 20% of the total slot machines to Sands China’s parcels 5 and 6 and Galaxy Resort.  “If they open with 1,500, we would expect to get 20% of the order,” Cath Burns, vice president for Bally Technologies’ Asia-Pacific operations, told Reuters, referring to Sands China´s projects. “Same with Galaxy — that’s what we are targeting with both groups now.” 

SMOKING BAN TO HARM CASINO REVENUES Macau Daily Times

The ban on smoking inside casinos could lead to a 20% drop in gaming revenues, the president of American Gaming Association (AGA) Frank Fahrenkopf told reporters during G2E Asia.

Meanwhile, Taiwan will conclude legislation on gaming by 2012. However, lawyer Benjamin Li told Lusa, that just like Singapore, Taiwan should not issue more than two licenses.


WYNN SHAREHOLDER UNIVERSAL AIMS FOR CASINO UNIT IPO Bloomberg

Universal Entertainment Corp, a Japanese pachinko game maker and the biggest shareholder in Wynn Resorts, plans a HK IPO  within three years for a unit that is building a $2.7 billion, 99-acre Manila casino resort.  "Universal Entertainment aims to lure VIP players from China to the Manila resort," said Kazuo Okada, Universal Entertainment's Chairman.  The first phase of the resort will include a casino, a hotel and an aquarium. The completed project will include two casinos, two hotels and a residential building and may be finished within five years, he said.

Companies are attracted by the Philippines' lower tax rates.  “Our gaming tax is lower than Macau and slightly higher than Las Vegas,” said Rafael Francisco, President of Philippine Amusement and Gaming Corp. Licensed casinos pay 25% gaming taxes, along with a corporate income tax for entertainment and other non-gaming income, he said.