SJM profit up 41%; SkyCity visa flap; gaming lobbyist for NSW Liberal president

TAGs: Australia, Macau, New South Wales, New Zealand, SJM Holdings, skycity

sjm-holdings-skycity-visa-flapMacau casino outfit SJM Holdings Ltd. boosted its net profit 41% to HK1.66b (US $214m) in the three months ending Sept. 30, buoyed by continued strength in the mass market segment. High rollers still accounted for the majority of SJM’s total gaming revenue, but their share fell 6.3% to HK12.5b, the third successive quarter that figure has dipped. There were slightly less VIP tables in operation (601 v. 613 a year ago) but VIP hold rose from 2.88% to 3.05%, so call it a wash. Meanwhile, there were just 1.1% more mass market tables this quarter (1,158) but mass market revenue rose 12.1% to HK6b. Slots revenue was up 4.5% to HK370m. Total gaming revenue was down 0.9% to HK18.9b while earnings rose 14.3% to HK1.89b.

SJM’s Casino Grand Lisboa had a stellar Q3, its gaming revenue up 25.5% to HK7.3b and earnings up 20% to HK1.15b. SJM’s share of the overall Macau casino market was 26.1% in Q3, down from 27.3% in Q2 and 28% in Q3 2011. SJM believes this downward trend will be corrected now that it finally got the nod to construct a casino on the Cotai Strip, where much of the enclave’s action has shifted in recent years. For the year to date, SJM’s gaming revenue is up 2.2% to HK57.9b, earnings are up 11% to HK5.7b and profit is up 32% to 5.07b.

All of Macau’s casino operators have had to deal with this year’s scarcity of Chinese gambling whales, although Melco Crown’s Lawrence Ho says they’ll return once the country’s Communist Party leadership transition is complete. In the meantime, casinos across the Asia-Pacific region are competing hard for the affections of this thinning VIP herd, and eliminating any and all impediments that might cause a whale to even think of swimming anywhere else. You want a special brand of cigar? Done. You want to smoke them in the elevators? Smoke ‘em if you got ‘em. You want to hunt our employees for sport? All we ask is you give them a five-minute head start.

So you could hardly blame Kiwi/Aussie casino firm SkyCity for helping the New Zealand government negotiate a deal to permit Chinese whales to fast-track their visa applications when they arrive in Auckland via China Southern Airlines. The gist of the deal SkyCity allegedly helped obtain is that the airline’s Gold and Silver card holders wouldn’t have to “answer questions relating to financial backing and employment history and to provide evidence of these.”

Winston Peters, leader of the opposition NZ First party, embarrassed Immigration Minister Nathan Guy by disclosing documents showing the department’s Intelligence, Risk & Integrity manager was “annoyed” at having been left out of the loop while the deal was being negotiated. Peters told the Herald it was “disgraceful” that the Minister was “prepared to weaken our border security to simply attract a few more tourists.” (Did we mention they’re really rich tourists?) Peters called the scheme “a recipe for illegal activity, including money laundering.” Guy claimed to be unmoved by Peters’ “stupid assertions.”

Peters also showed parliament the text of a year-old magazine interview in which SkyCity’s president of international business Ejaaz Dean claimed the casino was “in talks to make the visa process easier.” A SkyCity spokesperson said the exec had been misquoted and that the casino outfit had no role in negotiating the deal. SkyCity did strike a deal with the government to boost their roster of video poker (pokies) machines by a couple hundred in exchange for building a $350m convention center in Auckland, but the auditor-general has since decided to investigate whether SkyCity’s bid was really that much better than those of its rivals.

In Australia, a gambling lobbyist is the frontrunner to become the next president of the Liberal Party in New South Wales. Chris Downy was once NSW minister for sport and racing, but more recently he’s been CEO of the Australasian Casino Association (ACA). The current ACA president is Rowen Craigie, CEO of Crown Ltd., whose controversial ‘unsolicited proposal’ for a second Sydney casino license appears to have been fast-tracked by Liberal Premier Barry O’Farrell. The Sydney Morning Herald says Downy is expected to defeat his presidential rival John Ruddick when the vote is held next month. What chance is there Downy’s first congratulatory phone call is from James Packer?


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