Inside Asian Gaming

INSIDE ASIAN GAMING | October 2009 44 Briefs Regional Briefs Cotai deal with Japanese investors shelved? A possible deal to sell apartment units in Las Vegas Sands Corp’s Four Seasons complex to a Japanese investor is back on the back burner. We understand the parties couldn’t quite agree terms on the deal. Japan remains, though, a potential hunting ground for LVS in monetising some of its Cotai residential real estate. An industry insider tells us: “If you’re going to market real estate effectively to the Japanese, you need one of the really big brands. And Four Seasons is a great brand for selling into the Japanese market.” The received wisdom in the regional gaming industry seems to be that the victory of the Democratic Party of Japan over the country’s traditional post-war ruling group, the Liberal Democratic Party, in the August general election is likely to set back the cause of casino legalisation within Japan itself by at least five years. Nonetheless, with Japan’s ageing and falling population and its disinclination to allow mass immigration to fill the gap, the country’s tax base is shrinking. Given the huge amount of revenue generated in Japan by pachinko, the pinball-style game using steel balls, it would be a brave politician who forever set his or her face against a juicy tax-raising industry such as casino gaming. Under those circumstances, Japanese VIPs won’t necessarily be a target demographic for Macau operators indefinitely. Anything such as the sale of holiday apartments that ties them into the Macau gaming market now can only be a good thing. Star performance for Galaxy Galaxy Entertainment Group recorded a net profit of HK$1.06 billion (US$140 million) for the first half of 2009, compared to a loss for the six months ended 30th June 2008. The company said group EBITDA increased 91% to HK$507 million for the half year, which also represented three consecutive quarters of group EBITDA growth. EBITDA at Galaxy’s flagship StarWorld Hotel & Casino increased 45% to HK$419 million for the half year, which also represented the fourth consecutive quarter of EBITDA growth said Galaxy. The company said its cost reduction programme remains on track to deliver HK$200 million in annual savings. It added that measures to strengthen its balance sheet included the reduction of debt by 30% from HK$6.51 billion (US$840 million) to HD$4.57 billion (US$590 million). Cash held by Galaxy stood at HK$5.4 billion, as of June 30 and total cash exceeded total debt said the company. It was also announced recently that Galaxy has formally accepted the terms and conditions for its Cotai Land Grant deal and has paid an initial instalment of HK$1.1 billion toward that land cost. “After entering the Macau gaming market five years ago, Galaxy Entertainment Group has successfully transformed into a leading gaming operator in Macau, the largest and fastest growing gaming market in the world, said the group’s chairman Dr Che-woo Lui in a prepared statement. No smoke, no joke Macau’s days as a smokers’ paradise could be about to come to an end. There’s a lame joke doing the rounds that the only place in Macau where you can’t smoke is a cigarette warehouse. Even fireworks wholesalers seem to have a relatively relaxed approach to customers’ love of the evil weed. All that could change soon, however. Beijing is going to draft laws to ban smoking areas in all public places, the Beijing Evening News reported. Andwhere Beijing leads today, the rest of the country often follows. China’s leaders may not be fully signed up tree huggers just yet, but environmental issues on both the micro level of personal health and the macro level of reducing carbon emissions certainly seem to be firmly on the national political agenda. SomeMacaucasinoshavealready introducedmodest nosmoking zones. HongKong, however, recentlybanned thedistributionand sale of so-called‘smokeless smokes’—an electronic gadget that looks like a cigarette and gives the user a nicotine hit, without the nasty side effects of tar on the lungs and smoke in the next person’s face. Cynics say that was because the Hong Kong government is worried about losing valuable tax revenue from normal cigarettes. The product also had the potential to cause near-terminal confusion in the minds of the city’s anti-smoking inspectors, who now roam the streets and trawl the bars, handing out on-the-spot fines to offenders. The English-language newspaper China Daily said Cui Xiaobo, a professor from the Capital Medical University who participated in the drafting of the new Beijing law, stated it will force all public places to be 100% smoking-free. Even smoking rooms and areas will be completely removed from public places. It may just be a matter of time before even Macau’s baccarat tables become smoke free zones. Of MICE and min The number of MICE (meetings, incentives, conventions & exhibitions) events held in Macau totalled 347, down by 9% from the first quarter of 2009 according to DSEC, the city’s Statistics and Census Service. StarWorld Hotel & Casino