Macau Casinos

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James Packer's new Studio City casino in Macau gets fewer tables than hoped for
DateOctober 21, 2015 - 8:16AM

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Perry Williams
Senior Reporter

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James Packer's latest Macau casino, Studio City, faces a tough entry to the market after receiving a smaller than expected number of gaming tables from regulators. Photo: FDC

The Macau casino operator part owned by James Packer's Crown Resorts will seek talks with lenders on the $US3.2 billion ($4.4 billion) Studio City casino after authorities approved just 250 gaming tables for the complex, dashing hopes it would meet a 400-table commitment.
Melco Crown Entertainment, 34 per cent owned by Crown, can place 200 tables and 1233 poker machines on its gaming floor for the opening of the casino on October 27 with a further 50 gaming tables approved from January 2016.
Melco's 250 table allotment is superior to rival Galaxy Entertainment Group's 150 allocation for its Galaxy Macau Phase 2 and Broadway Macau casinos which opened in May.

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James Packer (right) and his business partner Lawrence Ho (left). Photo: Graham Uden

But it falls short of a key part of the debt dealcovering Studio City with the $US1.4 billion loan including a covenant that states the casino needs a minimum of 400 tables.
"Following the table allocation confirmation, Studio City intends to proactively engage the lenders under its senior credit facilities to discuss proposed amendments to the terms of its loan documentation to reflect the number of tables allocated," Melco said in a statement on Wednesday.
Studio City International Holdings is 60 per cent owned by Melco, with the balance held by hedge funds Silver Point Capital and Oaktree Capital Management through a group called New Cotai.
If lenders baulk at Melco's proposed amendment to the covenant, one option could include a $US1 billion deal with the hedge funds that own 40 per cent of Studio City, in a bid to improve the economics of the resort.
Analysts point out that if Melco were to move tables from its other Macau casinos, City of Dreams or Altira to Studio City, it would reduce its share of the takings. However, if it owned Studio City outright, it would have more freedom to move tables between its properties.
While Melco missed its 400-table target, it credited Macau authorities for recognising the effort and investment it had placed into its vast entertainment offering at the complex.
It aims to attract a more family-friendly crowd with a mix of Warner Brothers-themed rides, a Batman flight simulator and Asia's highest ferris wheel set between two art deco hotel towers.
The Hollywood-themed attractions may help Macau mirror the reinvention of Las Vegas where only one-third of the city's revenues are now derived from casinos.
"We thank the Macau government for its consideration of our application and approval of gaming tables and machines for Studio City," said Melco's chief executive Lawrence Ho. "We are confident that Studio City's offering of cinematically-themed entertainment, retail, food and beverage and accommodation options will contribute meaningfully to the economic and employment diversification of Macau."
Casino veteran and billionaire Steve Wynn received a sharp rebuke from Macau gaming officials on Monday after he criticised the city state's annual cap on table allocations.
Mr Wynn, who plans to open a new Macau casino in March 2016, said it was "preposterous" Mr Packer and Melco Crown would only discover their table limit days before the casino opened.
Macau authorities called Wynn Resorts representatives to a meeting on Monday and reiterated they would "strictly follow" the principle of allowing a year-on-year average growth rate of no more than three percent in gaming tables before the year 2023.

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Macau: Tough times no bar to Lawrence Ho’s Studio City

• THE AUSTRALIAN
  
• OCTOBER 26, 2015 12:00AM
  

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Sarah-Jane Tasker
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Reporter
Sydney

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Lawrence Ho has great confidence in the new Studio City casino in Macau. Picture: <span class="creditattribution">Bloomberg</span> Source: Bloomberg
[b]The man leading James Packer’s Macau’s fortunes, Lawrence Ho, is no stranger to delivering a multi-billion-dollar casino project in tough times. And that gives him confidence in opening the $US3.3 billion ($4.5bn) Studio City in a slumping market.[/b]
Mr Ho, co-chairman and chief executive of Melco Crown Entertainment, in which Mr Packer’s Crown Resorts has a 34 per cent stake, told The Australian he had form in achieving success in less than ideal times.
He said that the company had opened City of Dreams in Macau six years ago during the “financial tsunami”.
He said that despite the timing of its launch, the resort casino had achieved great success for the company in helping to turn the city into a world-class entertainment hub. “Our successful experience with City of Dreams gives us added confidence that Studio City, with its high-end brands and unique ­attractions, will significantly strengthen that city’s appeal to local customers and international visitors seeking an exciting leisure and entertainment experience,” he said.
“The Macau government has been very supportive in encouraging the industry to diversify. Studio City with its wide range of spectacularly unique entertainment offerings inspired by Hollywood-style glamour is set to take entertainment to an unprecedented level of excitement in Asia and subsequently redefining Cotai and Macau while driving revenue growth.”
Macau, which overtook Las Vegas as the largest global gaming market in 2006, has for the past 18 months recorded a slump in gaming revenue.
Macquarie’s gaming analysts are negative about the region and believe it will suffer the highest total gross gaming revenue fall among Asian gaming countries.
But Mr Packer would be hoping his Macau fortunes turn around as he prepares to walk the red carpet tomorrow night for the gala opening of Studio City.
While the exodus of VIP clients from Macau, on the back of China’s crackdown on graft, is hitting gaming revenue, the Asian gaming hub has been transforming from a high roller-focused centre to a “mass-­focused” entertainment destination.
Mr Ho said Melco Crown had tailored its investments and market strategy to attracting a diverse clientele from both gaming and non-gaming sectors. “We are well prepared to bolster our presence in the mass market to grasp the growing opportunities in this segment, as demonstrated through substantial and innovative enhancements to our assets.
“Diversification and innovation are paramount in overcoming the challenges and ensuring sustainable success in the city.”
Mr Ho said he believed Studio City had the most diverse portfolio of non-gaming entertainment offerings ever seen in Macau, which were designed to cater to the increasingly important mass-market segment. It was geographically well-positioned to serve Asia’s increasingly important mass market segment, he said.
Mr Ho said the opening of Studio City would see the integrated resort operator double its hotel room inventory, which would let it cater to the multi-day-stay needs of more customers.

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Macau gaming revenue slumps 28pc in October

• THE AUSTRALIAN
  
• NOVEMBER 02, 2015 8:35AM
  

Sarah-Jane Tasker
[Image: sarah_jane_tasker.png]
Reporter
Sydney

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James Packer and Melco Crown CEO Lawrence Ho, left, speak before last week’s opening of Studio City.Source: AP
[b]Days after James Packer’s new $4 billion casino opened in Macau, the Chinese gambling region has recorded another revenue slump.[/b]
The city’s Gaming Inspection and Coordination Bureau has reported that gaming revenue in October fell 28.4 per cent year-on-year to $MOP20.1 billion.
Mr Packer’s Macau interest, Melco Crown Entertainment, opened its Studio City casino last Tuesday in a gala event attended by Hollywood’s A-list.
Mr Packer said at the opening that the continued revenue slump, which has lasted now for 17 months, had been “painful” but he was confident in the long term outlook.
He is banking on the rise of the Chinese middle class to be attracted to the family offering of the new casino as the focus shifts to the premium mass market over VIPs who have left the region on the back of China’s corruption crackdown.
The city’s casinos generated a total of $MOP196.1m for the 10 months ended October 31, down 35.5 per cent year-on-year.
The monthly 28.4 per cent drop met the expectations of analysts, who had forecast a fall of around 28 per cent for October.
Mr Packer’s Crown Resorts (CWN) holds a 34 per cent stake in Melco Crown.