11/17/14

Problems for James Packer in Japan?

Australian billionaire James Packer has ambitious plans for his casino empire. Japan is at the center of his plans, with the businessman hoping that they will go ahead with casino legalization plans in the next few months.

James PackerUnfortunately for Packer and his company, these legalization plans have hit quite a few road bumps in recent weeks. There is even talk of the Japanese prime minister losing motivation to push through legalization. This would be a major blow for Packer’s plans in Japan.

It was initially thought that these were merely delaying tactics from Japanese opposition members. However, there is a real worry now that the legislation may be scrapped altogether. There is expected to be a few sessions this month in the parliament, but if no conclusion is reached before holiday, James Packer will be worried.

Delays -

There is now a good chance that the legalization vote will not take place in 2014. James Packer and other casino moguls will have to wait until 2015 before they sink their teeth into Japan. However, a complete abandonment of this issue seems very unlikely.

Despite a few missteps in recent months, the Japanese prime minister is still very popular among his people. In a recent visit to Singapore, the prime minister spoke about his complete support for the legislation to legalize gambling in Japan.

The main reason why there has been a delay is that Japan’s parliament is busy with other issues. They have faced many crises on the domestic and international scene in recent months. This has caused the gambling issue to become less important, and the prime minister does not want to appear to have the wrong priorities by pushing too hard.

After a few compromises with the opposition, expect the legislation to go through before the summer of 2015.

10/14/14

Wynn Resort is Getting Higher Gains than Estimated

The founder and CEO of the Wynn Resort is one happy man. The reason is the better than expected Q3 results posted by the company.

 The Vegas gains

Wynn_ResortsThe Q3 profits are higher for the company Wynn Resorts Ltd as the Vegas revenues for the company surged. The rise, which is estimated at 9 percent at their two casinos in Las Vegas, helped the company even when the company profits saw a drop in their Macau profits. Interestingly, it is the Macau casino that accounts for the majority of the casino business from the company. The Macau casinos for Wynn have been registering losses since last few months and this has affected the Q3 earnings for the company if overall performance is taken into account. Nevertheless, the Las Vegas casinos of the company have come to the rescue this time around and helped Wynn with more than expected Q3 performance.

The reasons for loss

The lucrative Macau casino business has suffered due to the Chinese government taking strict measures against corrupt practices. This has affected the casino business even though Macau is the only place in China where gambling business is legal. To make matters worse for the casino business, a new ban on smoking that is recently put into place could further affect the business in Macau. The high-rollers are not very enthusiastic with these new developments in China ad are leaving to play in casinos where there are no restrictions or problems.

However, with everything happening in China, the company is still going ahead with its new resort in Macau that is being constructed and the plans are to open its gate in 2016. This has been not put under hold as the company management believes that the current situation in China that is affecting the casino business is temporary and is bound to improve in the coming months. With the Wynn Palace in business, which is the name of the new upcoming resort and its ongoing Macau and Las Vegas business, the Wynn Resort management is confident of registering better profits in the coming months and years.

10/9/14

Private Jets and Golf to Attract Chinese High Rollers

The habit of high roller gamblers from China to take risks and emerge victorious or lose millions in one trip has earned the awe of casino operators across the world. This phenomenon is most obvious in Australia’s single profitable casino Echo Entertainment which depends on its Asian players for providing one third of its overall sales and treats them like celebrities.

These elite gamblers were responsible for enhancing earnings of Macau’s casinos by nearly four times, forcing large casino operators like Crown Resorts to develop an effective marketing strategy to bring them into Australia. This junket operation of sponsoring gamblers from Macau to Sydney interested in taking high risks has helped the casino increase its profits by nearly 25 percent.

Elite gamblers

Pampering high rollers with VIP treatment

 The casinos of Australia promise and offer these high stake players VIP’s Rich Lifestyle and gambling thrill in an exclusive setting within VIP lounges. This has made it attractive for players from China who have helped the revenue of Echo Entertainment grow by three times to AUD 397 million within few months. In Sydney the earnings of Echo owned Star casino itself was at AUD 389 million from VIP customers signifying a growth of 30 percent in gross revenue. Crown Casino also reported a 53 percent increase in revenue from its elite gamblers representing the highest rate of growth within a year.

To pamper its VIP customers, Crown Resorts and Casino got Bombardier Jets to transfer them from Macau to Australia and back instead of its usual Gulfstream jets which led to expenditure of nearly AUD 100 million.

Exclusive casinos for high rollers

Crown Resorts is also building a casino close to the Echo Entertainment casino to attract customers from Macau and Singapore. These famous and rich players find Australia an attractive option as they already have family and business connections in the country and this is like a free trip for them with family where they can relax in the glamour of famous and rich celebrities. Australia has a large Chinese immigrant population which settled down several years ago and own large tracts of real estate property.

Echo is working with Hong Kong based firm Chow Tai Fook Enterprises to build a new casino resort in Sydney, which will be uniquely designed on the beach side. To increase the attraction quotient of the casino resort Echo is planning to buy a golf course in the region.