Inside Asian Gaming

inside asian gaming JUly 2015 42 Will Melco Crown Buy Out Studio City? According to an article last month from Barron’s Asia , Macau casino operator Melco Crown Entertainment just finished a $1.75 billion refinancing deal, sparking speculation that it may buy out its minority partner in the soon-to-open Studio City resort on Cotai. Melco Crown may want to have 100% ownership in Studio City because allocations of new gambling tables are tight. In May, competitor Galaxy Entertainment opened its Phase 2 new wing and received only 150 tables, even though the operator had applied for 400 tables. It is likely that Melco Crown will get a similar allocation, according to Bernstein Research‘s Vitaly Umansky. Currently, Melco Crown may be reluctant to reallocate under- utilized tables from its City of Dreams and Altira to the new Studio City, scheduled to open towards the end of this year. But Melco Crown wouldn’t hesitate to move tables if it was the sole owner of Studio City, argues Mr Umansky. Melco Crown’s new financing deal gives the company a new $1 billion revolver. The company has another $1.75 billion cash on hand. Bernstein estimates that the 40% interest in Studio City held by New Cotai can be acquired by Melco Crown at a price tag of $1 billion. “Should the acquisition be completed, it would remove a key risk overhang for the stock.” Meanwhile, Melco Crown also delisted from the Hong Kong Stock Exchange as of 3rd July. Its existing investors were given the option of transferring their stock onto its primary listing on the US Nasdaq exchange. In January, Melco Crown governance had submitted the application to voluntarily delist from the Hong Kong Exchange, citing reasons of cost and utility and stating that the company had found a lack “appropriate opportunities to raise additional equity in Hong Kong” and the “very limited” volume of trading in its shares on the exchange. Enrique Razon Eyes Investment in Manila International Airport Filipino ports tycoon Enrique Razon Jr. said he might invest in a new international airport or existing air terminal operations in Manila as this would benefit Philippine tourism as well as his casino business through Solaire Resort & Casino in Entertainment City. Mr Razon, who has so far shied away from participating in the Aquino administration’s public-private partnership program, said the government must first define plans for a new air gateway in the capital district. “It really depends on what they are bidding out,” Mr Razon told reporters at the sidelines of the annual general meeting of Bloomberry Resorts Corp., which operates Solaire. “We will definitely participate,” added Mr Razon, without specifying which vehicle he would use to pursue such an investment. He said a new terminal was more attractive but an existing terminal in Manila that would be privatized was also an option. The transportation department has identified Sangley Point, Cavite as the likely site for a new international gateway that would eventually replace the congested Ninoy Aquino International Airport. However, Transportation secretary Joseph Abaya admitted recently that it was unlikely to auction off the airport during the term of President Aquino, leaving this task to the future administration. The call for new and expanded transportation infrastructure was echoed in Bloomberry’s annual report statement. Mr Razon said better access would bolster the master-planned Entertainment City resort district at Manila Bay, which serves as ground zero for the country’s effort to compete with regional gaming giants like Macau and Singapore. Thai Finance Minister Backs Casinos in Entertainment Complexes According to the Bangkok Post , Thai Finance Minister Sommai Phasee has thrown his support behind casinos in entertainment complexes, as long as they are strictly regulated. During a radio interview last month, Mr Sommai pointed out that many Thai people go overseas to gamble, adding measures could be implemented to prevent low-income Thai citizens from entering casinos in the country. “We lose more than we gain by letting people spend their money somewhere else. Other countries have taken our people’s money,” the finance minister said. Mr Sommai added the government must clarify what shape it wants casinos in the country to take before the issue is put to a referendum. His opinion mirrors that of national police chief Somyot Pumpunmuang, who has come under fire for saying he backs legalizing casinos “one million percent.” Making casinos legal was first proposed by a group of 12 members of the National Reform Council (NRC) party, led by Maj Anan Watcharothai. The NRC members proposed Thailand follow the lead of its neighbors and open a casino in Pattaya. They argued a casino would draw tourists, create jobs and generate revenue for the government. It would also divert business away from illegal gambling den owners, they said. Resorts World Manila to More Than Double Hotel Capacity The owner and operator of Resorts World Manila is expanding the property’s hotel capacity over the next four years to accommodate an expected rise in tourist arrivals. Travellers International Hotel Group Inc. plans to more than double its hotel capacity from 1,226 rooms to 4,200 by building new hotels and extending the Marriott and Maxims Hotels. REGIONAL BRIEFS Studio City Macau