Inside Asian Gaming

INSIDE ASIAN GAMING | November 2009 48 Briefs Regional Briefs Legend in a fall Some investors in Macau Legend, the holding company of Macau businessman David Chow, want to take control of its Babylon casino, reports the South China Morning Post . The motivation is to mitigate losses arising from the underperformance of Mr Chow’s other Macau investments—in particular, Fisherman’sWharf. Mr Chow has a half share in Fisherman’s Wharf, where the Babylon casino is located. Getting control of the Babylon will not, however, be straightforward. SJM Holdings, Dr Ho’s casino operating company, which is still majority-owned by the family, manages the Babylon and provides the gaming licence. Dr Ho also owns the other half of Fisherman’s Wharf. The problems reportedly arise from Merrill Lynch’s sale of a US$400 million stake in Macau Legend in 2006. The investors were a score of high net worth individuals and a group of hedge funds, according to the SCMP . So far they haven’t seen any money back, according to the newspaper, and some of them are getting more than a little itchy for some liquidity from the deal. Some investors are even willing to accept control of Fisherman’s Wharf’s real estate in mitigation of their losses. That looks like the triumph of hope over experience, when it comes to that particular white elephant. Not left to chance The Chinese may believe in good fortune, but it seems a number of enterprising business people in the Mainland city of Guangzhou are not prepared to allow the serious business of gambling be left entirely to Lady Luck. According to an investigation by the South China Morning Post , a whole street of traders is selling paraphernalia aimed at skewing the odds firmly in favour of the house. Before litigation lawyers from Macau’s concessionaires start text messaging their clients via BlackBerry, however, it’s worth pointing out the cheating kits are being sold to people running illegal casinos. From past media reports, those illegal casinos tend to operate in hotel rooms in Guangdong province (China’s richest by GDP), or occasionally in Macau hotels unconnected with the legal gaming industry. Unsurprisingly, in the parallel world of illegal casinos, the ‘operators’need to keep on the move and don’t like to tie themselves down with permanent premises. Dodgy casino equipment reportedly on offer in Guangzhou includes marked cards, closed-circuit television and computers to control what cards are dealt by otherwise random card shufflers. The card picking gear costs RMB20,000 (US$2,900)—a small fortune even by the standards of relatively wealthy Guangdong province. But then the potential rewards for the cheats are likely to be very large. Oh, and the SCMP reports the shops are only yards from a police station that doubles as a district headquarters for plain-clothes detectives. Ouch. Something Old, Something New It may be a sign that the financial world is still some way off‘business as usual’ that a two year old news story briefly shaved up to eight percent off the share prices of Macau’s Hong Kong-listed gaming operators last month. Part of the offending narrative was the suggestion from Francis Tam, Macau’s Finance Secretary, that the Macau government planned to raise the minimum age for casino players and dealers from 18 to 21 and planned to locate slot halls away from residential areas. It wasn’t clear from reports whether that meant relocating existing slot venues or just ensuring that new ones weren’t put in suburban districts. What really put the regulatory cat among the investor pigeons, however, was when Mr Tam went on to say the government is considering a cap on the number of gaming tables and slots in the market and a moratorium on new projects not yet announced or in Babylon casino Fisherman’s Wharf Fernando Chui Sai On