Inside Asian Gaming

May 2012 | INSIDE ASIAN GAMING 101 Briefs gaming market’s next phase of growth. The newly approved junket promoters, who were endorsed by Genting Singapore, are permitted to bring high-spending overseas gamblers to Resorts World Sentosa in exchange for commission. Contrary to Mr Adelson’s comments, Singapore regulators have said that these promoters are allowed to issue credit to their clients. LVS executives have previously said that their Marina Bay Sands casino resort—one of the two casinos licensed to operate in Singapore—has yet to sponsor any junket-license applications. “We already have over a hundred of the equivalent of the function of those two international marketing agents,” Mr Adelson said. “So we don’t see that (Resorts World Sentosa) has any advantage over us,” he added. While junkets—a linchpin in Macau’s gaming industry—do cut into casinos’ margins, they can help drive business volumes, as well as reduce credit risk and chances of bad debt, because they could be more familiar with their clients’ financial standings. Singapore regulators said they are currently reviewing additional junket-license applications but didn’t specify if Marina Bay Sands has endorsed any of them. Melco Crown Entertainment’s Q1 profit soars Melco Crown Entertainment Ltd, the Macau casino venture owned by Stanley Ho’s son Lawrence and Australian billionaire James Packer, saw its Q1 2012 profit post a 17-fold increase over the year-ago quarter. Melco Crown’s Macau portfolio includes the City of Dreams integrated resort on Cotai, the high-end casino hotel Altira on Taipa, as well as a string of slot venues under its Mocha Clubs brand. The company reported adjusted EBITDA of US$242.5 million in the first quarter, though it pointed out this was boosted by higher than expected hold, with management noting that assuming VIP hold was at the mid-point (2.85%) of the expected range, EBITDA would have been roughly $210 million. Melco Crown saw a 27% year-on-year jump in Q1 2012 net revenue to US$1,026.9mm. The bulk of that came from City of Dreams, where net revenues were up 43% year-on-year to $717 million. EBITDA at City of Dreams surged 130% in the quarter to $198 million. Net revenue at Altira was down 2% in the first quarter to $261 million, while EBITDA increased 34% to $55 million. Mocha Clubs slot revenues grew 10% to $37.3 million, while EBITDA fell 15% to $9.6 million. Melco Crown Entertainment is currently awaiting government approval to include gaming at the Studio City site on Cotai. In June last year, the company acquired a controlling stake in Studio City following a protracted disagreement between the project’s original partners that had delayed its development for years. Lawrence Ho said he was optimistic the government would soon grant permission to include a casino at Studio City, clearing the way for the company to commence construction and expand its presence on Cotai. LVS names Andrew MacDonald SVP and Chief Casino Officer LasVegasSandsCorp(LVS)announced the promotion of Andrew MacDonald from executive vice president of casino at Marina Bay Sands to senior vice president and chief casino officer of LVS. In his new role, Mr MacDonald, who reports to Global Gaming President Rob Goldstein, will be involved in all facets of casino operations across all properties. Among other responsibilities, he will evaluate the casino performance of each property and work with segment leaders and the global gaming operations team to analyze financial results and statistical data. He will also provide strategic recommendations to executive management. Prior to joining Marina Bay Sands, Mr MacDonald was managing director and co-global head of Macquarie Capital, Australia’s leading investment bank. He has held senior and management executive positions in leading gaming companies including Genting Berhad, PBL Gaming Operations, Crown Casino and Conrad Jupiters Casino. Mr MacDonald has progressed through almost every facet of the gaming industry. He started his career in 1978 as a dealer at Wrest Point Casino in Hobart—Australia’s first casino. He swiftly rose through the ranks, and by 1985 had held positions as a dealer, inspector, trainer and pit boss. Mr MacDonald will continue to be based in Singapore. Macquarie analysts suggest Macau’s 2012 growth could miss expectations Macau’s VIP gaming revenue growth continued to decelerate in April, in spite of the opening of Sands Cotai Central, prompting Macquarie analysts Gary Pinge and Elaine Lai to recommend investors pay close attention to the May results in order to evaluate the market’s direction. Macau gaming revenue increased 22% year-on-year to US$3.1 billion in April, while revenue over the first four months of the year was up just under 26%. Whereas analysts covering Macau gaming stocks are largely expecting gross revenue to increase between 20% and 25% in 2012, the Macquarie analysts are sticking to their lower estimate of 15%. Two junkets have been licensed to operate at ResortsWorld Sentosa,pictured here Shining contribution—City of Dreams Andrew MacDonald