Macau’s Studio City Will Default on Debt, Warns Analyst
Studio City Macau: Despite its many non-gaming attractions it’s failing to attract the mass market crowds.
Studio City Macau, Lawrence Ho and James Packer’s $4.5 billion casino that is integrated on the Cotai Strip is in trouble and could default on the $1.41 billion loan utilized to complete the construction of this hotel.
That’s the word from rating agency Standard and Poor’s Financial Services, which pelican pete slots this week issued a negative perspective for the resort’s bonds, off the back of a 42.5 percent slide in their value.
Macau’s first ever TV and movie-themed resort opened in October 2015, with Packer’s girlfriend Mariah Carey headlining the opening night, since the likes of Robert De Nero and Leonardo DiCaprio mingled among the crowd. It even had its own night that is opening, The Audition, a short film directed by Martin Scorsese and starring De Nero, DiCaprio and Brad Pitt.
Packer called it the ‘coolest 15 minutes ever made,’ but, with an $80 million cost, it may equally be called the absolute most advertisement that is expensive made.
New Concept Doesn’t Drive Crowds
But for all the glitz, Studio City was conceived in a markedly different climate that is economic before Chinese President Xi Jinping’s anti-corruption drive halted the location’s success tale and delivered profits tumbling for 26 straight months.
Studio City went big on non-gaming amenities, positioning itself as a non-VIP gaming destination to be able to woo China’s burgeoning class that is middle.
It has anything from television and film production facilities to a Batman themed flight-simulator that is 4-D coaster ride and a figure-eight Ferris wheel, but because of a slowing Chinese economy, visitor numbers to Macau are falling and the hordes of middle classes have actually failed to materialize.
Melco Distances Itself
Melco Crown owns a 60 percent stake in the property, while US hedge funds Silver Point Capital and Oaktree Capital own a 40 percent stake. Bloomberg reported this that Melco Crown has sought to distance itself from any kind of rescue package for the casino week.
‘Studio City Casino Macau is within a credit that is entirely separate and its particular debt is non-recourse to Melco Crown Entertainment Limited. […] Investors should not assume that Melco Crown Entertainment Limited will provide any economic support to Studio City Casino Macau or that it would step in for Studio City Casino Macau,’ said a Melco Representative.
There is speculation that that Melco is seeking to put the end up the hedge funds because it really wants to buy them out for the good cost, and that the negative rating from Standard and Poor’s will strengthen its position.
Duterte Takes Shock U-turn on Online Gambling
‘Gamble until you die. I do not care,’ said Philippine President Duterte Wednesday, clearly in an even more forgiving mood. (Image: rapeller.com)
Philippine President Rodrigo Duterte’s hardline crackdown on online gambling took a twist that is unexpected this week.
On Tuesday the us government’s gambling operator-regulator, PAGCOR, announced it was in the entire process of ‘readying application forms. so it had been ready to license online gambling firms that targeted ‘non-locals’ and’
‘We don’t know yet how saleable it is; there might be no takers,’ PAGCOR chief Andrea Domingo admitted to Reuters.’Or there could be many applicants,’ she added brightly.
PAGCOR hopes that the licenses that are new offset a few of the revenue lost by Duterte’s systematic dismantling of the nation’s online gambling giant, Philweb. Until recently, Philweb operated 299 online gambling boutique cafés through the entire Philippines, which offered online video poker and slots via approximately 8,000 terminals.
Last the company’s operations contributed around $12.2 million in taxes to the government year.
Duterte swept to power in June on an insurance policy that promised to eliminate crime and drugs. Literally. The president has leant their help to vigilante death squads that carry out the extra-judicial killings of criminals and habitual drug users with impunity.
Once sworn in, he instantly set his sights on the Philippine online gambling industry, plus in particular Philweb and its chairman, the billionaire Robert Ongpin.
Ongpin was agent of the ‘oligarchs,’ which he believed were ’embedded in federal government’ and practiced ‘influence peddling.’ Meanwhile, said Duterte, online gambling ‘had to stop’ because too many Filipinos were deciding to gamble alternatively of working for a living. It appeared that PAGCOR was taken completely by surprise by the announcement.
the month Philweb was forced to announce it would wind its operations down, as a result of the non-renewal of its license by PAGCOR. Ongpin stepped down as president of this company and, as a bid that is last-ditch approval, wanted to transfer nearly all of his majority stake into the company to PAGCOR, in an effort to truly save the company as well as its 6,000 workers. PAGCOR had been forced to refuse.
But on Wednesday, Duterte was clearly in a more mood that is tolerant.
‘Pay the correct taxes… Gamble until you die. I don’t really care,’ he announced magnanimously.
Duterte is currently ready to restore gambling that is online ‘taxes are correctly collected and so they [online gambling cafes] are situated or placed in districts where gambling is allowed, which means to say, not within the church distance or schools.’
‘ I became angry because even the youth are gambling and there is no way of collecting the taxes that are proper’ he admitted.
Whether this means he could be prepared to allow Philweb to continue its operations as before is currently unclear.
Indiana Casino Union Does What Trump Taj Mahal Workers Couldn’t: Reaches New Contract with Majestic Star Riverboats
Indiana Governor Mike Pence, the current GOP vice-presidential contender, has put their state on the map for monetary gains and development during their administration. Now a casino that is new contract in the Hoosier State is also showing up its sis chapter in Atlantic City, having effectively negotiated for benefits, where its brethren failed.
The Indiana Unite Here casino union has successfully bargained for a contract that is new the 2 Majestic Star riverboats in Gary, a stark contrast from the union’s efforts in Atlantic City, which failed. (Image: Unite Here/youtube.com)
Indiana’s Unite Here casino union, representing cooks, wait staff, and housekeepers during the two Majestic Star riverboats in Gary, has reached an agreement that is new the gambling operator. On August 19, the 2 sides officially finalized down for a agreement that increases wages over the next 2 yrs, while keeping the health that is current programs being afforded to union members.
The deal operates through 2018.
Unite Here Local 1 spokesperson Noah Carson-Nelson told the Chicago Tribune, ‘Our members are content. The individuals were excited that it includes raises and the same medical insurance. that it was settled fairly quickly and’
The Majestic Star casinos sit next to at least one another in Lake Michigan, about 30 miles southeast of downtown Chicago.
Regional 1’s parent union, Unite Here, is the organization that is same unsuccessfully proceeded hit at the Trump Taj Mahal in Atlantic City early in the day in the summer time. As a result, billionaire owner Carl Icahn announced that the casino is going to be forever shutting on 10 october.
The Trump Element
Formerly referred to as Trump Casino, Majestic Star II had been renamed after Trump Entertainment Resorts sold the property to Majestic in 2005 for $253 million.
The purchase was element of Trump Hotels & Casino Resorts (THCR) filing for Chapter 11 bankruptcy security in 2004. The company emerged from liquidation under the Trump that is new Entertainment name in 2005.
Trump’s record in Atlantic City is obviously questionable. But in Indiana, Trump’s riverboat was decidedly profitable. Throughout the 11 years since Majestic acquired the casino that is floating it’s never won as much cash since it did when Trump was the financial admiral associated with ship.
In 2004, total wins eclipsed $140 million. In 2015, the Majestic Star II taken in simply half of that figure.
The stars that are majestic two of 10 riverboat gambling enterprises in Indiana. The Hoosier State is also home to your French Lick Resort Casino, the actual only real land-based gambling place there, plus two racinos that offer slots and electronic table gaming.
Marked Market Variations Between Two States
Back east in Atlantic City, Unite Here Local 54 was additionally fighting for higher wages and health insurance coverage at the Trump Taj Mahal. But the bankruptcy procedure already underway whenever Carl Icahn purchased the casino allowed the billionaire to temporarily suspend pension and healthcare benefits as he worked to upright the casino’s dire situation that is financial.
But Icahn, who was reportedly losing $100 million regarding the venture, said he needed more time before restoring benefits. Employees moved off the working work in disgust, and Icahn called their bluff in a move that ultimately caused both edges to lose.
The marketplace is quite different in northwest Indiana than in Atlantic City. Whenever the Taj Mahal closes its doors in October, it will end up the fifth casino to shutter straight down since 2014 in nj.
The Blue Chip Casino and Hotel in Michigan City, Indiana also recently negotiated successfully with Unite Here Local 1. Ameristar Casino resort did as well, albeit after a lengthy and process that is tedious.
‘we are pleased to move on, and happy in an equitable manner,’ Majestic Star General Manager Barry Cregan said of the new contract that we did it.
So why would the smaller Indiana video gaming union find more success having its company compared to the much larger Atlantic City market? Because the Taj had been losing millions every month, therefore the union’s demands would only drive those losses further into the muck. In Indiana, while maybe not thriving like they could have been over a decade ago, casinos are apparently still making an adequate amount of a revenue to help make union benefits a worthwhile investment.
Paddy Power Betfair Reports £47.5 Million Loss Considering Costs of Merger
Breon Corcoran, Paddy Power Betfair CEO, said that the company would not further rule out consolidation if the right opportunity arose. (Image: Sunday Business Post)
Paddy Power Betfair has reported running losings of £47.5 million ($62.6 million) for the very first half of 2016 in comparison to profits of £106.5 million ($140.5) for the corresponding period of 2015.
CEO Breon Corcoran this week attributed the losses to one-off costs related to your merger between the two wagering powerhouses, amounting to £195 million ($257 million) in total. Paddy energy and Betfair agreed terms of their £5 billion ($6.5 billion) merger in September this past year but the deal was only finalized on February 2, 2016.
Thus, short-term losings incurred during through integration, including some £29 million ($38.2) in advisory fees alone, are anticipated to be handsomely offset by cost saving synergies of the newly combined company further down the line.
In reality, Paddy Power Betfair has upped its estimate of future expense saving from £50 million ($65 million) per year by 2018 to £65 million ($85.7 million) per from next year year.
A lot of those savings have actually come from job losings, with 650 of the combined company’s 7,200-strong workforce having found themselves surplus to demands after the merger.
Revenue Up 18 %
‘People have actually been really diligent, there is been a lot that is awful of work done, and promptly,’ said Corcoran associated with integration work. ‘Paddy Power Betfair has sustained momentum that is good an amount of considerable change.’
Corcoran additionally pointed to an 18 % rise in revenue for the time scale, to £759 million ($1 billion), along with double-digit growth across all four of its core divisions. Discounting merger expenses, would have reported underlying earnings of £181 million ($238 million), Corcoran said.
Online revenue was up 20 percent at £440 million ($580 million), while Paddy Power’s land-based bookmaking stores recorded a 12 % increase in revenues to £147 million ($193 million). The organization’s US and Australian operations also reported development.
More Consolidation Viable
‘The restructuring is now mostly complete plus the merger synergies are being delivered ahead of routine,’ said Corcoran. ‘We are creating a world class procedure by exploiting the unique assets and capabilities of each legacy business, particularly in the key functions of technology, marketing and trading.
‘While our industry remains highly competitive and it is exposed to the prevailing economic and regulatory environments, our strong market roles, increased scale and enhanced capabilities position us well for sustainable, lucrative growth.’
Corcoran also refused to rule the possibility out of more consolidation. If the right asset came up during the right price his company could be well placed to obtain it, he said, nevertheless the moment he was focusing on the integration process.