Category Archives: Macau

Macau Continues Expansion With Opening Of Parisian Resort Casino

Parisian CasinoOne would never surmise that Macau is stuck in a multi-year gambling revenue decline based upon the latest offering by Las Vegas Sands Corp. Last reported on this website in July, 2016, the Parisian was scheduled for a Sept. 13 grand opening, and they have accomplished just that, opening today, Sept. 13, 2016. The new casino and resort is visually stunning, both inside and out. With a price tag of $2.9 billion, Sheldon Adelson, Sands chairman and CEO, must know something about the world’s economy that the rest of us don’t. Justifying such a lavish expenditure in a down economy is either gutsy or foolhardy. But regardless of that, the resort will attract a crowd and it will make money. For how long is anyone’s guess.

Less than a mile away, the new Wynn Palace resort and casino just opened on August 22. With a $4.2 billion price tag, it’s just as lavish as the Parisian, if not more so. How can competition like that be good for the Parisian, not to mention the existing Macau casinos? There’s only so many gambling dollars available in one location. Granted, Macau is a worldwide gambling hub that is also trying to become a worldwide tourist destination as well. Macau will need every dollar it can get to support those two resorts.

The Parisian had expected to open with 410 table games and 1600 slot machines, but Macau’s economy and finance secretary, Lionel Leong, announced just last week that they would receive the same table game allocation as was granted to Wynn Palace — 100 tables on opening day, an additional 25 at the beginning of 2017 and a final 25 at the beginning of 2018. Rather than targeting the high-end rollers that were chased away by China’s gambling corruption crackdown, the majority of the Parisian’s table games will feature the game of choice in Asia, baccarat, with betting limits that will be adjusted lower to appeal to China’s middle-class tourists.

The Parisian expects to cater not just to casino players but also to families for an affordable luxury experience. With a 1200 seat theater, 170 retail outlets, and an outdoor pool deck with an Aqua World water park, there’s plenty to keep people entertained. Business conferences can be accommodated with 56,000 square feet of meeting space. Much like the Bellagio and its fountains in Las Vegas, the Parisian will be recognizable by its iconic centerpiece, a 525-foot tall, free standing half-scale replica of Paris’ Eiffel Tower, which is now the tallest structure on the Cotai Strip.         

Please follow and like us:

The Parisian Is Sands New Casino Resort In Macau

Parisian resort and gambling casinoDespite the fact that Macau is experiencing a multi-year decline in gambling revenue as a whole, Las Vegas Sands Corp’s new casino and resort, The Parisian, is on target for a September 13, 2016 grand opening. Visually stunning both inside and out, the new resort casino features a half-scale replication of the Eiffel Tower at its entrance. Sheldon Adelson, Sands chairman and CEO, recently revealed new details about the $2.9 billion, 3000 room resort on Macau’s Cotai Strip. During the same conference call, Adelson also revealed to investors the not-so-rosy second quarter earnings results. No doubt, those figures will strengthen Adelson’s resolve to continue his crusade against online gambling.

The earnings report shows yet another decline in Sands’ performance. Earnings were at $394.4 million or 41 cents per share, for a drop of 32.2 percent compared to 2015 second quarter results of $581.5 million or 59 cents per share. Revenue was down 9.3 percent to $2.65 billion compared to second quarter 2015 of $2.92 billion. Sands attributed the majority of the decline to its Macau businesses, which provide more than half of Sands’ cash flow. Despite the negative trend in revenue and earnings, a small ray of sunshine could be seen as June represented the first monthly year-over-year performance increase since September 2014. At least shareholders saw it that way as the share price in after-hours trading was up 4 percent.

Las Vegas Sands has quite an investment in Macau. Along with The Parisian, Sands will have four interconnected resorts with 13,000 rooms, four performance centers, an arena and two million square feet of convention space. Adelson said, “It is one of the most beautifully decorated public spaces for any hotel in the world. It is really, really magnificent and is going to be a high-demand hotel.”

Not to take away from The Parisian’s grand opening, another major casino resort grand opening will precede it by three weeks. Steve Wynn’s Wynn Palace will open on August 22, 2016. To put a happy face on that bit of news, Adelson said he thinks the opening of Wynn Palace will be beneficial to both properties.

To finish up with his conference call, Adelson highlighted a bit more company news:

— Sands will continue its dividend policy, 10.8 percent higher than a year ago, currently returning $2.88 a share per year with a quarterly 78-cents-a-share dividend payable Sept. 30.

— Plans are moving ahead for Sands’ 17,500-seat, 400,000-square-foot Las Vegas concert hall. Sands is collaborating with The Madison Square Garden Co., Azoff MSG Entertainment, Live Nation Entertainment Inc. and Oak View Group to build it. Construction is expected to commence at Sands Avenue between Koval Lane and Manhattan Street in early 2017. Grand opening is planned for late 2018 or early 2019.

— Sands’ Las Vegas properties, The Venetian and Palazzo, had a 95 percent occupancy rate for the quarter and the average daily room rate was up 3.9 percent to $240.

— Net revenue climbed 3 percent for the company’s Las Vegas properties to $356.5 million for the quarter.

Please follow and like us:

Casino Gambling Revenue in Macau Continues to Drop

Macau casino gambling revenueDown by a disappointing 9.8 percent in May, Macau’s casino gambling revenue confounded analysts who had estimated a drop of 8 percent. The figures released by the Gaming Inspection and Coordination Bureau of Macau indicated a total take for the month of May at $2.3 billion, and show that casino gambling revenue has now declined for a continuous 24 months. This is a reflection, not so much on an ailing world-wide economy, but rather more on the anti-corruption crackdown by the Chinese government. This is an indication that the high-stakes gamblers who are now staying away from Macau’s casinos, had quite a bit to do with the stratospheric numbers of previous years at the world’s largest gambling hub. An early May ban imposed on phone betting, which is popular with high-roller gamblers from China, also contributed to the lower revenue figures.

Along with the release of the dismal figures, Macau gaming stocks dropped an average of 2.4 percent. Losers were led by Sands China with a loss of 3.3 percent and Galaxy down 2.5 percent.

In an effort to stem the falling tide of casino gambling revenue, casino operators are looking outside of Macau for new areas of potential growth. Areas that won’t be impacted by China’s new stricter gambling policies. As a result, Sands China and Wynn Macau Ltd. have already started focusing on recreational gamblers and tourists as a more reliable source of revenue. Plans are already in the works for Macau to rebrand itself as a tourist destination that is world-class and not solely a casino gambling hub. Their intent is to be able to compete with popular tourist destinations such as London, Singapore, Hong Kong and Paris as a way to diversify its economy.

Moody’s Investor Service, a world renowned credit and debt watcher, issues sovereign credit ratings which serve as a barometer for the government’s ability to repay debt. These ratings are used by investors to judge the stability and strength of local economies. Moody’s has recently downgraded Macau’s long-term sovereign debt rating as well as their long-term foreign currency bond ceiling and warned that plans for economic growth based on the tourism market would be “volatile and susceptible to shifts in external demand.” Moody’s further pointed out that “the government has expressed plans to diversify the economic base. But these are at an early stage of development, centering primarily around the execution of existing infrastructure efforts and on vertical diversification within the tourism sector itself. Lacking a track record of implementing such reform, there is a risk that these measures will not stem the deceleration in growth in the near-term nor diversify the economy over the medium-term.”

Following the announcement from the city’s casino regulators, Macau gaming stocks extended its losses, dropping 2.4 percent at the midday break trading on Wednesday. The losers were led by Sands China, which fell 3.3 percent while Galaxy also found itself in the red at 2.5 percent.

Please follow and like us: