
Macau casinos face an uncertain future as VIP revenue slumps and warnings persists over mass-market saturation.
Macau casinos could be in for a rough ride, with more new resorts set to open, say analysts from Morgan Stanley. In the firing line is the gaming mecca’s fragile mass market which could leave casinos scrabbling around for customers.
Junket operators are also in for a tough couple of years, analysts suggest, as VIP gambling in the region continues to drop.
Speaking to The Australian, Morgan Stanley’s Mark Goodridge said:
‘This [new casinos], combined with an increasing level of competition in attracting players, particularly in Cotai, suggests that without an acceleration in mass revenue growth, returns for the industry will decline.’
Macau has been undergoing a huge transformation in recent years. Hit on all sides by a weakened Chinese economy, smoking bans, and a push to stop money-laundering and corruption, resorts have seen gaming revenue slump month-on-month. VIP junkets, which ensure millions of dollars are pumped into the semi-autonomous region’s gaming firms, have been particularly targeted.
Mass Market Could Suffer
Macau’s casinos are now being encouraged to invest in more mass-market attractions like shows and entertainment. Last year, James Packer and Lawrence Ho’s Melco Crown opened Studio City in Macau. The multi-billion dollar resort features Asia’s largest ferris wheel and a strong Hollywood theme. It is hoped that new ‘entertainment’ complexes like this will placate a Chinese mainland government keen on diversity.
However, while the economy falters, casino developers have not held back. They have continued to build bigger and bigger integrated resorts in the hope that building their way out of the recession is the way forward. For Morgan Stanley, it’s a foolhardy approach.
With the addition of up to 750 new gaming tables in the city, mass market gambling could suffer. However, according to Morgan Stanley forecasts, mass-market ‘remains stable’.
Macau Casinos Hit By VIP Debt
The last thing Macau’s casino empires need is more bad news on their VIP sectors. But that’s just what they received last week as it emerged many chains face a huge volume of bad debt as whales retreat.
Junkets, VIP trips planned by middle men to bring in big gamblers from China and elsewhere, are being audited as part of a general crackdown on high rollers. Where credit risk wasn’t a big concern several years ago, it’s now a firm part of Macau’s overall business plan.
‘This increasing scrutiny and policy tightening, while positive for the segment’s long-term prospects, will likely be detrimental to the shorter-term prospect for the junket operators, VIP revenue, and their related activities,’ Daiwa Capital Markets’ Jamie Soo told the Las Vegas Review-Journal.
‘Junkets facing further operating pressures may result in further VIP room closures.’
Compared to Las Vegas, Macau still looks like a mammoth success story. However, despite being one of the world’s leading gaming regions, revenues have fallen dramatically. Monthly revenues are likely to fall this month to mark two years of consecutive monthly dips. Overall GGR (Gross Gaming Revenue) is also predicted to slump a few more percentage points.
While Macau gets its house in order over bad debts, mass-market saturation, and just what to do over getting more VIPs in, operators are expecting more bumpy rides in 2016.
Trump Taj Mahal Bankruptcy Proceedings Could Go Before Supreme Court If Atlantic City Union Prevails
UPDATE MAY 31, 2016: The Supreme Court has rejected the UNITE HERE appeal.
Attorneys from the Trump Taj Mahal in Atlantic City might be trekking south to Washington, DC, should the United States Supreme Court accept an appeals case brought against the casino resort by a local labor union.
The Trump Taj Mahal in Atlantic City, which still bears the GOP candidate’s name, is facing pushback after a local union petitioned the US Supreme Court to overturn a bankruptcy court’s verdict and restore employee benefits. (Image: jtf.org)
UNITE HERE Local 54, the largest casino workers union in Atlantic City, sued Trump Entertainment Resorts in October of 2014, after a bankruptcy court allowed the casino to terminate the union’s collective bargaining agreement (CBA) and cease paying existing health benefits and pensions.
In January, the US Court of Appeals for the Third Circuit in Philadelphia ruled with the bankruptcy court. ‘Under the policies of bankruptcy law, it is preferable to preserve jobs through a rejection of a CBA, as opposed to losing the positions permanently,’ Judge Jane Roth wrote.
UNITE HERE is now going after its last-chance attempt to overturn the verdict by appealing to the US Supreme Court. The high court is expected to rule on numerous appeals on Tuesday and announce which cases it will accept.
No Jobs with Benefits
Attorneys for the union say the Trump Taj Mahal bankruptcy proceedings allowed the company to swim out from underwater at the expense of the employees.
‘This is about how a bankruptcy was used to transfer value from working people to the super-rich,’ UNITE HERE general counsel Richard McCracken said, as reported by the Los Angeles Times.
Carl Icahn, longtime friend to Donald Trump, now the Republican nominee for the presidential election, acquired the property in February of 2016 after the CBA terms were annulled. Icahn agreed to assume over a quarter of a billion dollars in debt and plans to invest upwards of $100 million to renovate the facility.
During a GOP debate in August, Trump said of his Taj Mahal’s bankruptcy: ‘These lenders aren’t babies, these are total killers. These are not the sweet little people you think.’
But faulting on monies owed to lenders allowed Trump’s corporation to effectively end its CBA with UNITE HERE.
Chances Slim for UNITE
Should the Supreme Court decide to take on the UNITE HERE v. Trump Entertainment Resorts lawsuit, the case would certainly add yet more hurdles to Trump’s summer and fall campaign for the White House.
With Hillary Clinton the presumed opponent, Trump will face attacks from his Democratic foe and an ongoing legal case against the casino business he founded won’t do him any favors. Trump’s campaign is heavily based on his business record, so having former employees speak out against him, the same people he touts as proof he’s ready to lead the country to more prosperous times, could conceivably slow his momentum heading into November.
The odds, however, are in Trump’s corner.
According to the Administrative Office of the US Courts, the Supreme Court accepts just 100-150 of the more than 7,000 cases it is asked to review annually. For the high court to welcome an appeal, four of the justices must vote to take the case.
With just two percent of petitions granted, UNITE HERE is betting on odds worse than the tie bet at baccarat.
It’s quite unlikely that the Supreme Court will hear UNITE v. Trump, but then again, it once seemed unfathomable that the Donald would secure the Republican Party nomination.
NBA Finals Odds: Repeat Showdown Between Golden State Warriors and Cleveland Cavaliers
Steph Curry and the Golden State Warriors will defend their title against LeBron James and the Cleveland Cavaliers, the same team they met in last year’s NBA Finals. (Image: Ezra Shaw/Getty Images)
It’s déjà vu for the NBA Finals. The defending champion Golden State Warriors will face off against the Cleveland Cavaliers with the title on the line for the second straight year, and if the sportsbooks in Las Vegas are correct, the team from out west will once again be victorious.
Led by reigning two-time MVP Steph Curry, the Warriors avoided a tragic end to their historic 73-win season on May 30 by capping off three straight wins against the Oklahoma City Thunder to overcome a 3-1 series deficit.
LeBron James’ Cavs defeated the Toronto Raptors 4-2 after sweeping their first two opponents in the playoffs.
It’s the matchup everyone wanted to see: a Cavs versus Warriors rematch.
‘You appreciate how tough it is to get back here,’ Curry said following the Thunder knockout. ‘That’s the one thing I’ve learned. You can’t take anything for granted because it’s such a grind.’
Warriors Favored
Oddsmakers in Nevada have plenty to go on in determining the lines for the 2016 NBA Finals. Just 12 months ago, the Cavs and Warriors squared off with Golden State winning the series 4-2, their first title in 40 years.
Following a 73-9 regular season in which they topped Michael Jordan and the Chicago Bulls’ seemingly unreachable feat, the champs enter the Finals as the heavy favorite.
The Westgate SuperBook has the Warriors at -210 to win the NBA title and the Cavs at +180. That means a Golden State fan will need to wager $210 to win $100, while a $100 wager on the Cavs that comes to fruition will net the bettor $180.
Bookmakers feel rather confident that the Warriors can once again handle the Cavs. The decision for bettors is to try and determine if LeBron James is being underestimated.
Last year, the Cavs played the entire series without power forward Kevin Love, and lost point guard Kyrie Irving after game one. A fully healthy Cavs should present more offensive opposition to the Warriors, but enough to overcome a team that has won 85 times (73 regular season, 12 playoffs) since they last met in the Finals?
That’s for the bettors to decide.
‘I wouldn’t want it no other way,’ Cavs shooting guard JR Smith told reporters. ‘We get another chance at it for one and to beat the team that beat you.’
Warming to Gambling
While the NFL continues to oppose sports betting as the Oakland Raiders mull a move to Las Vegas, NBA Commissioner Adam Silver told ESPN recently that he’s ready for his league to embrace gambling.
‘We do a lot of business internationally where sports gambling is legal. As I began to study the issue I realized that there’s this enormous . . . underground betting market in the United States,’ Silver stated.
‘Ultimately my job as commissioner is to protect the integrity of the game. When there’s an enormous amount of betting all underground, there’s no transparency. I think it should be legal, I think it should be regulated,’ Silver revealed.
But for now, only those within Nevada borders will be able to wager on the Cavs-Warriors. Game one of the NBA Finals tips off on June 2 at 9 pm ET.
2016 World Series Of Poker Begins In Las Vegas
The 2016 World Series of Poker (WSOP) kicked off in Las Vegas today. Although public events won’t begin until June 2, the first of thousands of the world’s best poker players have begun their descent into Sin City from all around the globe.
Joe McKeehen, who took down over $7.6 million for winning the WSOP Main Event in 2015, will be returning with a heftier bankroll to this year’s events.(Image: Reuters/Las Vegas Sun/Steve Marcus )
The WSOP runs at the Rio All-Suite Hotel & Casino from May 31 until July 18, with 69 bracelet events up for grabs.
As in previous years, the showpiece $10,000 No Limit Hold’em tournament pauses once nine players have been reached. The ‘November Nine’ (which this year will start end of October to avoid conflict with the no-doubt-high-TV-ratings US presidential elections) will then reconvene to fight it out for the first prize and a place in history.
The Main Event, which runs from July 9 to 18, will now feature starting stacks of 50,000 chips, which also applies to all championship bracelet events.
Satellites Kick Off 2016 World Series
The WSOP is kicking off with live qualifiers in sections of the tournament arena, with players able to satellite their way into larger buy-in tournaments for cheap. ‘Daily Deepstacks’ are also to be held most days, with $135, $185, and $235 freezeouts available for all players.
Following the customary Casino Employees Hold’em event (which carries a bracelet and is open to casino employees from around the world), the Series starts in earnest with the Colossus II on June 2.
In 2015, the inaugural Colossus introduced a $565-buyin tournament, which allowed players a re-entry across its six Day One flights. This year, a $7 million guarantee is attached to the tournament, and organizers will be hoping to best 2015’s turnout of over 22,000.