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This week's gamble: Donald Trump leaves for net neutrality return
Our gambling news this week focuses on the return of the net neutrality rule, which means the exit of FCC Chairman Ajit Pai. The return of net neutrality will ensure better internet for online casinos, poker, and sports betting. Also, as we prepare to launch sports betting in other states, we see how big the industry can grow in the coming years.
Now, with President Donald Trump's term in office coming to an end, there are expectations that Net Neutrality will return with the appointment of a new chairman of the FCC. The current chairman, Ajit Pai (Trump appointee), has announced that he will resign by Jan. 20, leaving a legacy of higher internet prices. Pai helped destroy Net Neutrality. While performance was stagnant, ISP costs for users have risen since then.
Net neutrality is the principle that all traffic on the Internet should be treated equally. It requires Internet service providers to prohibit slowing or blocking access to websites, and prohibits companies that control Internet access from favoring their services and content over competitors' content or services. It also prohibits broadband companies from providing "fast lanes." The FCC's new chairman is expected to restore network neutrality protection. 실시간 바카라사이트
MGM Resorts International
The Bellagio operator placed 596th on the rankings, ahead of venerable firms from other industries such as Colgate-Palmolive, Blackstone — the owner of Bellagio’s real estate — and Southwest Airlines, among others. MGM surged 147 spots on a year-over-year basis, placing nearly 700 spots ahead of rival Las Vegas Sands (NYSE: LVS).
The Global 2000 ranks the largest companies in the world using four metrics: sales, profits, assets and market value,” according to Forbes. “There are 58 countries represented by the publicly traded companies on the list. The U.S. leads the way with 611 companies on the ranking, and China comes in second with 346 Global 2000 companies.”
MGM ranked fifth in the hotel, restaurant and leisure category while Sands placed 17th. Based solely on market capitalization, Sands is more than double the size of the Cosmopolitan operator.
MGM Redemption Story
Like other casino operators, MGM was punished in the immediate aftermath of the coronavirus pandemic as it was by lengthy closures of its gaming venues on three months: Las Vegas, Macau and throughout its regional portfolio.
Through a series of capital-generating transactions and under the stewardship of CEO Bill Hornbuckle and CFO Jonathan Halkyard, MGM has emerged with a cleaner, leaner investment thesis and one of the industry’s strongest balance sheets.
“While MGM has some capital outlays over the medium to longer term related to its development pipeline (NY / Japan), the current construct of the cash flows and the balance sheet allow for continued capital returns to shareholders via buybacks,” wrote Deutsche Bank analyst Carlo Santarelli in a note to clients today.
He added that current pricing on MGM stock is attractive enough for the operator to continue its aggressive share repurchase program. The analyst rates the shares “buy” with a $58 price target, implying 40% upside from the June 8 close.
Not Many Gaming Companies on Forbes 2000 List
The concentration of gaming companies on the Forbes 2000 rankings is small. After MGM, the next highest-ranked firm with exposure to the industry is VICI Properties (NYSE: VICI) in the 758th spot. That’s MGM’s primary landlord and the largest owner of gaming real estate in the U.S. 파워볼실시간
Among Macau concessionaires, Galaxy Entertainment joins MGM and Sands on the list, but Melco Resorts & Entertainment, SJM Holdings and Wynn Resorts (NASDAQ: WYNN) didn’t make the cut. The only other domestic casino operator to appear on the rankings was Caesars Entertainment (NASDAQ: CZR) in the 1,280 spot.
Other gaming entities on the overall rankings included FanDuel parent Flutter Entertainment, which surged 239 spots to 1,077. Slot machine giant Aristocrat Leisure gained 33 places from the 2022 rankings, ascending to the 1,611 slot.
The top five spots were commanded by JPMorgan Chase, Saudi Aramco and three Chinese state-controlled banks.
Macau tourist prices fall for the first time in 12 years
The Macau Tourism Price Index, which reflects changes in prices of goods and services purchased by visitors, fell 2.7% year-on-year to 131.5 points in the third quarter of 2015, according to data from the Macau Bureau of Statistics.
"This is due to lower hotel rates and lower clothing prices," the Office for National Statistics said Wednesday
This marks the first year-over-year drop in tourist prices in more than 12 years. Official data showed the index fell 0.55% in the second quarter of 2003 compared with a year earlier.
Data on Wednesday showed tourist prices fell 2.3% quarter-on-quarter in the third quarter as lower hotel room rates pushed the accommodation price index lower. In the first nine months of 2015, the tourist price index fell 0.10% year-on-year.
The lodging industry index accounted for about 23.1% of the total tourist price index in the third quarter, followed by restaurant services with a share of 17.5%. The accommodation index fell 10.9% year-on-year in the three months to Sept. 30.
According to data from the Macau Hotel Association, the average cost of a Macau hotel room was $1,512 ($189) in the eight months to August. This is a 5.4% decrease from the previous year. 온라인카지노
In the first eight months of 2015, Macau's cumulative average hotel occupancy rate was 79.5%, down 7.0 percentage points year-on-year, according to separate data from the City Bureau of Statistics. During the period, a total of 6.75 million visitors visited hotels and guest houses in Macau, down 6.4 percent from a year earlier.
Hotel prices and occupancy rates are falling as the number of visitors to Macau continues to decline. Visitor arrivals in the eight months to Aug. 31 were 20.44 million, down 3.2% from a year earlier.
Hotel accommodation is one of the main non-game revenue sources for Macau casino operators. The easing of room rates coincided with the downturn in the gaming industry. Macau Casino's Total Game Revenue Declines For 16 Consecutive Months YoY.
Casino operator Melco Crown Entertainment Ltd will soon open a $3.2 billion studio city from a five-star hotel to a four-star hotel. The company said the four-star type is best suited to Macau's "diversification policy for accommodation and tourism products."
Macau junket theft reports hurt Wynn Resorts’ shares
Shares of Nasdaq-listed game operator Win Resorts fell 4.6% on Thursday on reports that a Macau-based junket operator lost HK$2 billion US$258 million over theft charges, analysts said.
Wynn Resorts Inc. Wynn Macau Ltd., which operates a casino in Macau. Wynn Resorts has confirmed that affected junket operator Dore Entertainment is operating VIPs at the Wynn Macau Casino Hotel.
"The current concerns reported in connection with Dore, one of Wyn Macau's junket operators, have no direct financial impact on Wyn Macau," Wynn Resorts.
The company added, "Door owes nothing to the company and continues to operate in Win Macau."
U.S.-based Stern Age CRT analyst David Bain attributed price volatility to Wynn Resorts shares on Thursday "a report citing theft/funding omissions inside the Junket Group of up to HK$2 billion."
He added: "The Junket Group operates in Win Macau, but it is a separate organization, and any funds lost in connection with the case will be limited to the Junket Group."
Mr. Bain did not provide the source of the report or provide details of the incident. But a note from UBS Securities Asia Ltd analysts Anthony Wong and Angus Chan, citing "local industries and news sources," states, "I suspect they went into hiding with investor capital from one of the largest junk groups in Macau, the Dore Group."
However, the memo from Mr Wong and Mr Chan stated that the amount involved in the case could be less than HK$2 billion mentioned in the initial report.
"We note that such initial figures may be inflated, as was the case with sulfuric acid (HK$8 billion to HK$10 billion) in April 2014," they said. The reference to "Hwangsan" was about a Macau school principal who reportedly disappeared with a large amount of cash last year.
The UBS memo states that the Dore Group "probably achieved monthly sales of between HK$9 billion and HK$13 billion, accounting for approximately 4-5% of the industry's total junket sales. The group's main VIP rooms are in Win Macau (two rooms with at least 25 tables), and the connected employees operate at the Lan Kwai Fong Hotel, a third-party casino in SJM [Holdings Ltd."
UBS estimated that the combined two dorre rooms could account for up to 25% of Win Macau's annual junket volume. "This incident is likely to have a negative impact on the rolling volume immediately, at least in the short term," it added.
Mr Wong and Mr Chan said while it is unlikely that Dore will officially operate in other Macau properties, some investors in the company are also likely to be investors in other junk rooms in Macau. "For the wider industry, the incident could further weaken confidence within Junket operators, leading to a more challenging liquidity environment," UBS analysts noted.
Sun City Impact
"On-site confirmation shows amounts ranging from HK$200 million to HK$2 billion are involved in the case," Daiwa Securities Group analysts said in a note. "Even on the lower end [it] is important and quite important," wrote Jamie Soo, Adrian Chan and Jennifer Wu analysts.
Daiwa's team also pointed out that the news could have a negative impact on Sun City Group, Macau's largest operator. Daiwa said, "It's hard to determine the exact relationship between Door and Suncity, but there's an observable connection between the two… We expect the potential negative contagion impact from Dore to have an adverse impact on Sun City's business."
Investment analysts at Credit Suisse AG in Hong Kong had a different view on the case’s impact on Suncity.
“Dore is currently operating a VIP room in partnership with Suncity. Although they operate under one brand, they maintain separate cage functions and will each bring their own players to the VIP rooms,” analysts Kenneth Fong and Isis Wong said.
They added: “There is no credit extension involved between the two. A junket agent with the deposit slip issued by Dore cannot get their cash at the Suncity cage. And we have confirmed such an agreement with Suncity. As such, the loss of money in the cage of Dore should not impact Suncity at all.”
The Credit Suisse team added it believed investors had “likely exaggerated” the extent of the Dore case. Its overall impact in the sector “is likely to be small if any”, Mr Fong and Ms Wong suggested.
They added: “The boss of Dore who reportedly owns a Macau casino and several pieces of land has agreed to honour the debt and the deposit put in by the junkets and the agents. From our checks, we didn’t see this event triggering capital flight at other small junkets last night. We believe that this will limit the impact to the system.”
VIP under pressure
Macau’s VIP segment has been the most hurt by the current slump in the city’s casino industry. Data from the Macau government for the second quarter of 2015 showed VIP baccarat GGR – the game of choice for Chinese high rollers – fell 42.2 percent year-on-year. Industry observers have linked the decline to the ongoing anti-corruption campaign by Chinese authorities, the slowing Chinese economy and also changes to visa policies to Macau, among other factors.
Junket operators play an important role in Macau’s VIP gaming segment. They recruit the high roller players in mainland China and beyond, and crucially make it their business to know how much the players are worth and what they have in assets. They extend credit to those players – in order to circumvent the strict currency flow restrictions between Macau and mainland China –, collect on losses and provide accommodation and other entertainment for the gamblers when in Macau.
The challenging VIP environment in Macau has already led many junket operators to downsize the scale of their operations in the city. Deutsche Bank AG said in a note on September 1 that “at least eight” Macau VIP gambling junket rooms had closed in August, but didn’t mention them by name.
According to several analysts, there also has been a significant increase in the repayment periods incurred by VIP players regarding credit extended by junket operators in Macau. Bad debt incurred by junket operators and their agents is also reportedly on the rise.
Rob Goldstein, president and chief operating officer of Las Vegas Sands Corp, parent of Macau casino operator Sands China Ltd, said on Wednesday that the gambling junket business model as applied to Macau is broken “for now”.
Brokerage Wells Fargo Securities LLC last week stated that, after meetings in Las Vegas with senior executives from casino firms with Macau operations, it had found uncertainty about the VIP segment persists. “A few operators even suggested that VIP play in Macau may never fully come back, citing a junket liquidity crunch and tighter policy toward Macau from the mainland China government,” senior analyst Cameron McKnight wrote. 실시간 바카라사이트
Macau June GGR lowest monthly tally since 2010
Macau's casino gross gaming revenue (GGR) fell 8.5% year-on-year in June, marking the 25th consecutive month of decline, official data showed.
In June, the GGR was about 15.88 billion MOP ($1.99 billion). Macao Casino GGR's monthly tally is the lowest since September 2010 MOP of $15.3 billion.
The results mean casino GGR in the first half of 2016 was down 11.4% year-over-year to $107.79 billion in MOPs.
Figures on the market revenue split between VIP and mass market gambling will be released on a different day from the second quarter to June 30.
On a monthly basis, casino GGR fell 13.6% in June. 파워볼게임
The figures were released on Friday by the city's casino regulator, the Game Inspection and Coordination Bureau.
Moody's said in a report this week that it expects Macau's economy to contract 6.0 percent year-on-year in 2016 amid falling gaming revenue.
