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Genting Singapore Plans $1.14 Billion Rights Issue

Posted by admin in Casino News

SINGAPORE — Genting Singapore PLC said it will raise up to 1.63 billion Singapore dollars (US$1.14 billion) in a rights issue to boost its capital position and further expand its businesses.

“The rights issue will strengthen the company’s financials and put us in a strong position to tap strategic opportunities,” Managing Director Justin Tan said.

Genting Singapore said about 60% of net proceeds will be used for “future strategic opportunities,” while the remainder will be for working capital purposes.

The casino operator is offering up to 2.04 billion shares at 80 Singapore cents each.

Genting Singapore shares, which are in a trading halt, last changed hands Tuesday at S$1.19 each. The stock will resume trading Thursday.

The shares have more than doubled in price since the start of the year as the operator’s S$6.59 billion resort-casino project on Sentosa island comes closer to a soft launch in early 2010. The project includes a casino, four hotels and a Universal Studios theme park.

Genting Singapore said the project is on track, both in terms of costs and timing.

“The Singapore casino is well funded, so it seems Genting is only taking opportunity of the strong run-up of its shares recently. It’s a good assurance to have some money in the bank,” OCBC analyst Carey Wong said.

Mr. Wong said although Genting Singapore’s focus won’t likely be on acquisitions, the operator could be looking at investments in casinos in Macau, which have been hit by the global economic slowdown, but still hold huge potential.

The company is offering one rights share for every five existing ones and closes Oct. 12.

Genting Singapore, which owns 45 casinos in the U.K., is 54.3% owned by Malaysia’s Genting Bhd.

Genting Bhd. will subscribe to all shares it has the rights to under the offer. It also agreed to sub-underwrite the deal with underwriters DBS Bank and CIMB-GK.

Other underwriters are J.P. Morgan, ABN AMRO Bank, CLSA Singapore Pte., Deutsche Bank AG, HSBC and UBS AG.

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Analyst downgrades 2 casino operators

Posted by admin in Casino News

NEW YORK — Ameristar Casinos Inc. and Penn National Gaming Inc.’s shares are unlikely to rise significantly in the near future, an analyst said Tuesday, and downgraded the stocks.

Shares of the two casino operators have surged from their 52-week lows - with Ameristar’s stock having advanced more than threefold, and Penn National’s more than doubling - Goldman Sachs analyst Betsy Gordon wrote in a note Tuesday

“Earnings upside is limited as regional revenue trends could remain mixed in (the) third quarter and companies have captured most available cost saves,” Gordon wrote.

She cut ratings on the stocks to “Neutral” from “Buy” and lowered her price target on Ameristar to $17 from $22 and Penn National to $29 from $37.

Ameristar Casinos  shares lost 72 cents, or 4.2 percent, $16.11 in morning trading. The stock has traded between $4.64 and $23 during the past year. 

Shares of Penn National fell $1, or 3.5 percent, to $27.27. The stock has traded between $11.82 and $35.18 over the past year.

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Revel Casino bets economy ripe for financing

Posted by admin in Casino News

ATLANTIC CITY - To the casual observer, work undertaken on the $2.5 billion Revel Casino rising next to Showboat might seem incremental.The 53-story concrete structure was topped off just two weeks ago, though ground was broken in November 2007. About 78 feet of structural steel will be positioned in the next couple months.

But by October, said Kevin DeSanctis, president and chief executive officer of Revel Entertainment Group L.L.C. - the company behind the megacasino - he will seek the remaining $1 billion in loans he needs to complete the project.

“We will go back into the lending markets in the fourth quarter,” DeSanctis said in an interview last week. “We plan to make a push October to December to get that last piece of financing.”

For DeSanctis, it will represent a giant leap of faith that the credit markets have rebounded enough that a billion dollars in financing will no longer be considered untenable, if not impossible to get.

“They’ve improved a lot. Whenever you deal with something not in your control, it’s hard to be confident. But we continue to see improvement, and more and more deals are getting done,” he said. “I am more optimistic today than I was six months ago.”

In late January, DeSanctis announced that all interior work on the casino’s restaurants, retail shops, nightclubs, and a luxury spa - the things that were supposed to help Atlantic City’s transition from day-trip customers to an overnight clientele - would come to a halt. Credit had dried up. About 400 construction workers were laid off.

Fast-forward seven months. As DeSanctis gears up his team to start the mountain of paperwork required to get the remaining financing, he said his time frame hasn’t changed: Revel Casino will open 16 months from the point when crews begin work on the interiors.

“If we start in January 2010, we can open in May 2011,” DeSanctis said. “Everything is relative to financing.”

This has been a summer of discontent for the nation’s second largest casino mecca. Gambling revenue decreased by double digits in June and July compared to a year ago. August revenue figures come out Thursday, and many are expecting more of the same as the recession and Pennsylvania slots houses continue to batter the resort.

“I don’t think the numbers hold a tremendous number of surprises,” DeSanctis said. “I tend to look closer to the Borgata, Harrah’s Resort, and the Taj. Those are the operations that have spent capital and are closer in nature with what we’re opening.”

They also have among the lowest year-to-date revenue declines: 5.2 percent at the Borgata; 12.4 percent at Harrah’s Resort; 2.5 percent at the Taj.

Much is riding on Revel’s completion, both psychologically and financially, gaming analysts and casino operators say. Three other super-casinos planned here were put on indefinite hold last year because of the credit crisis.

“After three years of mostly negative stories about the Atlantic City casino industry, the completion of Revel could give the city a sorely needed positive vibe,” said Joe Weinert of Spectrum Gaming Group L.L.C. in Linwood, N.J. “Revel’s opening could change that perception of Atlantic City in a hurry.”

Mark Juliano, CEO of Trump Entertainment Resorts Inc., which owns the three Trump casinos (including the Taj Mahal, which sits near Revel), said just obtaining the financing needed to complete Revel would be “an enormous boost of confidence for Atlantic City.”

“Obviously, a big project like that right next door to us will have a short-term negative impact,” Juliano said, “but in the long term, it will really help grow the city and help bring in a higher-end customer to the Taj.

“Right now, it’s not doing anybody any good.”

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$73.7M wagered in week at casino

Posted by admin in Casino News

Pennsylvania - Police reports from the first week of Rivers Casino operations show incidents of counterfeiting, theft and drunkenness that could occur in any enterprise where large quantities of cash and alcohol flow.

State police stationed inside the casino issued trespassing citations to someone trying to enter who was under age 21 and another person who had placed himself on the state’s compulsive gambler self-exclusion list.

Meanwhile, the casino’s first eight days of operations produced one big haul, generating $6.5 million in gross terminal revenue on $73.7 million in wagering.

Of the $6.5 million, 55 percent, or $3.6 million, went to the state in taxes. About $2.2 million of that will go for property tax relief. The casino kept $2.9 million.

Just how the Rivers stacked up against opening weeks for other Pennsylvania stand alone casinos and racetrack casinos is difficult to say. For the week of Aug. 10-16, Rivers Casino churned out $5.3 million in gross terminal revenue on $59.7 million in wagers.

That would put the North Shore venue behind The Meadows Racetrack and Casino in Washington County, Sands Bethlehem, and Harrah’s Chester Downs for first-week revenues.

However, the total excluded Sunday’s opening day when the Rivers produced nearly $1.3 million in gross terminal revenue on $14 million in wagers.

“We’re satisfied with how we fared this first week, particularly in light of the fact that we haven’t run any player promotions,” Rivers President Ed Fasulo said. “Overall, we’re very pleased with our performance.”

Of the casino’s first eight days, its worst, interestingly enough, was Thursday, the day of the Steelers preseason opener at nearby Heinz Field. The casino generated $477,767 in gross terminal revenue on $5.9 million in wagers that day, its lowest amount to date.

Mr. Fasulo said media hype over potential traffic snarls “probably encouraged people to stay away” that day.

As for the crime reports, a few incidents involved cash vouchers, machine credits or money itself that was stolen from distracted or careless patrons. (When you put a bill such as $20 in a slot machine, the device shows it as credits, and when you stop playing, any winnings are returned as a paper voucher.)

But casino veterans Jesse and Marcia Westehoff of Leet felt victimized in a way they’d never encountered at gambling halls in Las Vegas, Atlantic City, West Virginia, Washington County or elsewhere.

Mr. Westehoff, 70 and limited in sight by legal blindness, sought to redeem a $59.60 voucher at a cash-dispensing machine after an afternoon of slots play with his wife and daughter. It returned to him another voucher, which he assumed meant the machine was malfunctioning.

He walked away, not realizing an unfamiliar aspect of the Rivers Casino cash dispensers. Some of the North Side facility’s dispensers pay out bills but deliver no coins. They merely return new vouchers for the small change, which then must be taken to a cashier or placed in a different dispenser (colored yellow instead of blue) giving coins.

In Mr. Westehoff’s case, according to a police report, surveillance cameras showed that he left behind $59 in the cash dispenser’s tray. His new voucher was for just 60 cents. An unidentified person behind him took the $59 and was never found.

Mr. Westehoff feels wronged, but not just by the thief he never saw.

“All the other casinos give you cash and change at the same time, and everything’s in front of you,” he said. “I see this slip come out and I thought the machine was just returning my voucher. Here, it was giving me a slip for 60 cents, and I didn’t see the money coming out.”

Another police report showed a second victim, unidentified, losing $33 Saturday when he inserted a voucher for $33.50, received a paper slip for 50 cents, failed to notice the $33 dispensed, and left to seek assistance. Someone came afterward and took the $33.

People identified taking the money in such circumstances can be prosecuted, or at least advised to return the money to its rightful owner to avoid charges, said state police Cpr. James DePaolo.

“There are certain casinos around the county that have a finders-keepers rule, but that’s not the case in Pennsylvania,” he said.

Mrs. Westehoff sees the casino at fault, however, with its no-coin dispensers. She said she called the casino about it yesterday, without getting an explanation. She herself is still holding a voucher she never redeemed because it was too much effort for the value.

“I had to come home with a voucher for 6 cents, because I wasn’t going to go to a cashier for 6 cents,” the registered nurse said. “The casino can make big money, though, if everyone with a voucher for under a dollar says, ‘I’m not going to bother with that.’ “

George Matta, the casino’s director of community relations, said in an interview yesterday that he’d heard no complaints previously about the non-coin dispensers. He said they represent a new generation of machine, also installed recently in Las Vegas, and that they are marked as cash-only machines, with touch-screen messages that walk a patron through the transaction.

The benefit of the machines, Mr. Matta said, is that they can accept multiple vouchers in a single transaction, adding up a total amount owed the player instead of giving back lots of dollars and coins separately. Without coins, they run more efficiently and don’t have to be re-serviced as frequently, he said.

Mr. Matta said those new, blue machines are typically right next to the yellow ones that return coins, which patrons can use as an alternative to seeing a cashier.

As to the more than two dozen incidents in which state police filed reports in the casino’s first week — with the facility itself the victim in seven suspected cases of counterfeit $10 or $20 bills — Mr. Matta said: “We had over 20,000 visitors in the first week. It was an extremely small number of incidents reported.”

Read more: http://www.post-gazette.com/pg/09230/991551-53.stm#ixzz0OYTafgX5

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