Adelson sets the pace; Philippine gaming scandal grows legs

As March gets off to a week start in Macao, operators who don’t yet have a presence on the giant landfill known as Cotai — namely Wynn Resorts, MGM Resorts International and Sands-Cotai-CentralSociedade de Jogos de Macauare being encouraged to increase their mass-market orientation. “As business migrates to Cotai with new properties continuing to open, casino operators with peninsula-concentrated product portfolios … may continue to lose market share over the medium and long-term,” wrote Sanford C. Bernstein analysts Vitaly Umansky and Simon Zhang. In the meantime, Sheldon Adelson is cleaning up. “The lion’s share of Sands China’s profit comes from its mass-market casino tables and non-gaming businesses, and the mix continues to shift more in this direction,” wrote Bloomberg Intelligence senior analyst Tim Craighead.

Noting that mass-market gamblers generated 75% of the gambling profit at the tables last quarter, Craighead added, “These segments generated about 80 percent of last year’s [Sands] operating profit. In contrast, the low-margin VIP business accounted for a relatively miniscule 10 percent, even though it typically garners news headlines.” Adding its voice to the chorus, Morgan Stanley Asia opined that mass-market players were a much better return-on-investment proposition. They were also a fecund source of revenue for shopping malls, a historic strong point for Sands: It also has bigger retail business, which is less staff intensive and carries higher margin.” Once again, the casino industry finds itself following Adelson’s lead.

* Penn National Gaming‘s Plainridge Park racino in Massachusetts surpassed Deutsche Bank analyst Carlo Santarelli‘s estimates, up 1% from last month. Penn averaged $350 slot/win/day on 4% higher coin-in. Plainridge grossed $13 million for the month.

* Philippine Amusement & Gaming Corp. CEO Cristino Naguiat has got some ‘splainin’ to do to the Philippines Senate. He’s been called to testify as to how $81 million stolen from the government of Bangladesh found its way into Philippine casinos. Pagcor, Solaireafter all, was one of the parties which successfully lobbied to have casinos — which it both owns and regulates — excluded from 2001 anti-money-laundering legislation. Also being called on the carpet were Solaire Resort CEO Thomas Arasi, Midas Hotel & Casino CEO Reynaldo Bantung and City of Dreams Manila President Clarence Chung. Additional revelations on the money-laundering scandal were promised to the Wall Street Journal by Anti-Money Laundering Council Chairman Amando Tetangco. “There is a clear violation of our anti-money-laundering law,” he told the paper. A Pagcor official leaked to the Philippine Daily Inquirer the contention that only $46 million was laundered, mostly at Solaire. Midas and City of Dreams were held to be in the clear. As Filipino officials attempt to get to the bottom of this murk, the picture only gets cloudier.

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