Casino News Today

Casino operator Wynn Resorts has received approval for a one billion dollar share offering on the Hong Kong market of its Macau gambling business, a source familiar with the matter said Monday.The roadshow for the sale of a 20 percent stake in its Macau casino operations will start September 21 while the listing is planned for October 9, the source said.

US casino billionaire Steve Wynn has been looking for funds to expand his business in the Chinese gaming haven of Macau but was previously deterred by weak stock market conditions, reports have said.

A pick-up in investor confidence has revived appetite for initial public offerings in Hong Kong recently with the benchmark Hang Seng Index closing at its highest level in more than a year on Friday.

More than 10 IPOs are due by the end of October.

Wynn’s listing follows a share sale in July of rival firm Sociedade de Jogos de Macau Holdings (SJM), the casino firm of Macau tycoon Stanley Ho.

Since Ho’s monopoly on gaming in the former Portuguese colony was broken up in 2002, the city has seen a flood of investment from foreign operators, transforming it into the world’s largest casino market.

Record monthly takings at Macau’s casinos in August have prompted hopes of a recovery after a recent slowdown.

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Las Vegas Strip gambling revenue fell 11 percent in July, the 19th straight decline, and Atlantic City’s dropped 16 percent in August as the two biggest U.S. gambling centers grapple with the worst slump on record.In Las Vegas, casino proceeds on the Strip dropped to $461.3 million in July from a year earlier, Nevada’s Gaming Control Board said today on its Web site. Gambling proceeds in the New Jersey seaside city dropped to $391.7 million, the New Jersey Casino Control Commission said in its statement.

Strip gambling has fallen more than 10 percent in every month since September 2008, with the exception of May’s 6.4 percent drop. Las Vegas casinos have slashed room prices and increased special offers in response to company conference cancellations and betting declines of as much as 23 percent in February and 26 percent in October. Atlantic City is being hurt by competition from neighboring states.

This year through July, Strip revenue has tumbled 14 percent, compared with the record 11 percent drop for all of 2008. Airport passenger traffic in Las Vegas fell 12 percent in the first seven months of 2009, according to the Clark County Department of Aviation, as airlines including US Airways Group Inc. and UAL Corp.’s United cut capacity.

MGM Mirage Chief Executive Officer Jim Murren and Wynn Resorts Ltd. CEO Stephen Wynn said business in Las Vegas was stabilizing after releasing second-quarter results.

“Less worse is the new operative term,” in Las Vegas, Joel Simkins, an analyst at Macquarie Securities USA Inc., said in an interview last month. “We still remain very cautious with the expected onslaught of CityCenter this December and its predicted opening will cast a pall over Las Vegas Sands, Wynn Resorts, as well as other major operators on the Strip.”

CityCenter

MGM Mirage is the biggest casino owner on the 4.5 mile Strip, with nine operating resorts and CityCenter, Las Vegas’s biggest development, due to open in December. Wynn Resorts Ltd. owns the namesake Wynn casino and neighboring Encore.

MGM Mirage, whose largest shareholder is Kirk Kerkorian, rose $1.15, or 11.4 percent, to $11.24 today in New York Stock Exchange Composite trading. The shares have lost 18 percent this year. Sheldon Adelson’sLas Vegas Sands Corp., which has almost tripled this year, in Las Vegas, lost 60 cents to $16.24. Wynn, up 47 percent year to date, rose $1.06 to $62.15.

About 21.4 million people visited Las Vegas in the seven months through July, a 6 percent decline from a year earlier, according to Las Vegas Convention & Visitors Authority data released today. Convention attendance tumbled 26 percent.

Strip gambling revenue last increased in December 2007, when it rose less than 1 percent.

Atlantic City

Atlantic City revenue from tables at the 11 casinos declined 20 percent to $115.6 million. Slot machines fell 15 percent to $276.1 million. Gambling revenue declined at all 11 casino properties last month. This year through August, revenue has fallen 15 percent to $2.71 billion, after dropping 7.6 percent in 2008, the worst annual decline for the region. In May, Las Vegas Sands opened a casino in Bethlehem, Pennsylvania, diverting gamblers from Atlantic City.

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Indiana’s casinos are facing increasing competition from gambling ventures in Michigan and Ohio that could pose a threat to the $900 million in tax revenue the industry generates for the state.

Ohio plans to introduce 17,500 slot machines at the state’s seven horse racing tracks by the middle of next year — including tracks in nearby Toledo and Cincinnati. Michigan continues to add tribal casinos, with more than 20 now in operation, The Journal Gazette of Fort Wayne reported Sunday.

Revenues for the Blue Chip Casino in Michigan City, a town on Indiana’s lakeshore, dropped by 30 percent after the opening of a tribal casino in southern Michigan.

The competition from the two states spells a threat to the nearly $900 million a year in tax revenue Indiana receives from casino gambling.

“In some respects we are playing defense, much more than we ever have,” said Mike Smith, president of the Casino Association of Indiana. “The state could wake up one day and find out that $300 million of their revenue is gone.

“It’s time to take a look at how we built this industry and make sure the tools are there to allow us to compete.”

A recent report from the nonpartisan Legislative Services Agency said Indiana’s gambling revenue was up for the year, unlike elsewhere in the nation, largely because of casinos at racetracks near Indianapolis in Anderson and Shelbyville.

An analyst for the agency said the track casinos displaced about $110 million of revenue that otherwise would have been spent at the state’s riverboats. Riverboat gambling generated $766 million in taxes last fiscal year, while the track casinos brought in another $126.6 million.

There is also a resort casino in French Lick, about 100 miles south of Indianapolis.

“Most observers believe that at least in the state of Indiana, the market is saturated,” said Ernest Yelton, executive director of the Indiana Gaming Commission.

But that hasn’t stopped talk of expanding or moving one of the existing riverboat casinos to Fort Wayne, about 100 miles northeast of Indianapolis near the Ohio border. Bill Thompson, a professor of public administration of the University of Nevada Las Vegas who studies gambling, sees a casino in Fort Wayne as a defensive strategy.

“You have to be mindful that Ohio is ready to open casinos in Toledo, and the Battle Creek casino is reaching into Indiana,” Thompson said. “So Fort Wayne is a defensive move to keep the money from going to Michigan and Ohio, but not a growth area.”

Some people, however, say that could continue a trend away from out-of-state gamblers coming to Indiana to Hoosiers gambling their own money at home.

“We would end up with more Hoosiers gambling, and that’s an important consideration,” said Rep. Win Moses, D-Fort Wayne. “It is not going to be like Vegas where they fly in and leave their money.”

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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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