CASINO

Top 10 Casino Stories of 2012

TAGs: Atlantic City, Entertainment City Manila, eurovegas, hurricane sandy, Kazuo Okada, Macau Casinos, Melco Crown Entertainment, mobile gambling, sheldon andelson, Steve Wynn

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Casino markets all over the planet have seen a big year in 2012. Whether you’re in the USA, Asia or even Spain, then casinos will have been dominating the pages of your favorite gambling news source. There’s been scandal, brand spanking new venues and others that have simply been given land grants and to we’ve tried to sum it all up as concisely as possible in the following list of the top ten casino stories of 2012. So in no particular order, here goes…

1. Wynn v Okada.

Steve Wynn and Kazuo Okada

Steve Wynn vs Kazuo Okada

The biggest fight in a casino this year didn’t involve Manny Pacquiao or Floyd Mayweather. If there are movie directors looking at the casino industry for their next storyline the ongoing Steve Wynn vs Kazuo Okada debacle will have provided them with plenty of food for thought. The CalvinAyre.com column inches are clogged with stories about the fight between Wynn Resorts’ largest shareholder (Okada) and the company that is trying to oust him. The whole case started way back in early January when Okada accused Wynn Resorts of failing to allow him access to their books. He was looking for evidence of a $135million donation to the University of Macau and ever since that date things have got nasty.

Wynn Resorts first tried to have the case thrown out and went to the Nevada courts to get this done. Wynn called out the accusations made by Okada, describing them as “innuendo” and “hyperbole”. Taking it to Nevada wasn’t the greatest idea and it caused the Securities and Exchange Comission (SEC) to start looking at the University of Macau donation. It was after this the first real truth started to seep out as it emerged the argument had its roots in a disagreement over a development in the Philippines. From here on in the dispute got even dirtier with Wynn first forcibly buying out Okada and then accusing the Universal Entertainment Corp. owner of making improper payments to Filipino regulator Pagcor.

Pagcor and Okada stringently denied any wrongdoing and observers started to speculate that Wynn was effectively shitting on the doorstep of his own VIP rooms as junkets began to question their relationships with someone that so unfettering threw one of his own under the bus. The Philippines replied to the earlier accusation by banning him from opening any resorts in the country. Okada didn’t let the case halt his progress in getting ready for Pagcor City and both Wynn and Okada continued to fight through the courts for access to all manner of documents. Claim, after claim, after claim followed and Okada was even allowed to nominate new Wynn Resorts board members – something that he was obviously roundly criticized for by Wynn Resorts.

October came and Okada lost his voting rights with the main court fight now relating to the forcible redemption of Okada’s shares at a 30 percent discount. A court case has been set for April 2014. That basically translates to another year of squabbling ahead and the likelihood that Wynn v Okada will feature on this list next year.

2. EuroVegas

Sheldon Andelson and EuroVegas

Sheldon Andelson and EuroVegas in Madrid

While most of the casino world was focusing its eyes on the Asian market, Sheldon Adelson decided that heading to one of Europe’s more economically unstable nations was what he wanted to do. In Feb. 2011 he announced plans for “a mini-Las Vegas in Europe” in the home of Sangria, the Flamenco and British holidaymakers – Spain.

The two-horse race for EuroVegas involved the nation’s capital Madrid and Catalunya’s principal settlement of Barcelona in what is likely to cost Las Vegas Sands around €10-15billion to build. Madrid eventually got the nod after months of waiting and Sands apparently have around 30 to 40 banks on board to help finance the six casinos, 12 hotels, nine theatres and three golf courses that will make up the project. It will provide around 250k jobs. Once they made a final decision on Sept. 8 the development budget had already rocketed to €17bn.

Adelson will break ground on the project in 2013 and has already achieved a victory by getting the regional gaming tax slashed from 45 percent to 10 percent. Now he just needs to smoking ban repealed and he’ll be a very happy man. Makes the Mitt Romney loss easier to take if nothing else.

3. Russia casino zone breaks ground.

Russia isn’t a country that likes sitting back and doing nothing and such is its vast surface area it can be part of the Asian casino market whilst at the same time dabble in Europe – should they want to. They must be an intelligent bunch as they opted for the former and in November construction started on the first casino resort in the Primorye/Primorsky territory on the country’s Pacific coast. If there is enough interest it’s hoped that around 17 casinos will be built and that it can eventually rival other destinations in the region. The response from international firms has so far been tepid with Melco Crown Entertainment and Genting so far the only large firms rumored to be interested.

4. The saga surrounding Toronto’s casino

Toronto is regularly alluded to as Canada’s answer to New York and it seems they’ve even taken a page out of their US counterpart’s gambling book by opting for a casino in the city. The process in Canada’s largest urban area hasn’t been without its pitfalls and the squabbling began even before it had been agreed there would be a venue in and around the city.

The final decision on allowing a casino in the city was made in October after being postponed for five months to allow the city’s mayoral committee commission to look at its pros and cons. The thing doesn’t even have a location yet with various sites in and around the ‘tee-dot’ being discussed and there’s a widely held belief that the site chosen depends on the company building the resort. This will be one of the usual suspects with Wynn Resorts and MGM Resorts International already declaring their interest.

5. Constructions starts at Bagong Nayong Pilipino-Entertainment City Manila.

It’s official moniker already qualifies as one of the longest named casino complexes on the planet and when it starts to take in revenues the country’s gaming authority (Pagcor) expects the Philippines to surpass Las Vegas in five year’s time when revenues are predicted to hit $11billion. The project officially broke ground in late January with four companies – Bloomberry Investments, Travelers International Hotel Group (a JV between Genting and Alliance Global Group), Belle Corp. and Universal Entertainment Group – all participating in its construction. Bloomberry’s Solaire Manila and Belle Corp’s Belle Grand casino will open their doors in 2013 – March and Q4 respectively – and Universal’s venue will cut the tape in 2014 with Travelers International Hotel Group opening Resorts World Bayshore in 2016. Bell Corp later confirmed a deal with Melco Crown Entertainment and Universal chairman Kazuo Okada (yes, the same one!) obviously felt a little left out and decided it was time for a threesome as he teamed up with the Philippines third-richest man John Gokongwei Jr and Alliance Global Group as the project’s local partners. Their venue opens in Q4 2014.

6. Hurricane Sandy

Atlantic City is no stranger to doom and gloom with an unprecedented three straight years of dropping revenue arrested earlier this year…only to be followed by another decline. A hurricane, then, was about as welcome as a kick in the nuts and Hurricane Sandy proved to be just that for the coastal resort’s casinos. Governor Chris Christie advised the venues to close at 4 p.m. on the Sunday prior to the Hurricane striking and at the same time ordered a mandatory evacuation of the barrier islands. Closing at a weekend was damaging enough and the venues had hoped that all the warnings would be in vein. How wrong they were with some speculating that Sandy had “lost a bet” as infrastructure around the city’s casinos saw extensive damage.

The casinos themselves escaped the worst in terms of structural damage. The Revel, though, which was at one point supposed to save the entire region, was dealt a hammer blow by the storm and one that it may never recover from. That wasn’t the worst of it though as Sandy caused the East Coast gambling destination to post its largest decline in the 34 years it has existed. The four-day shutdown saw revenue drop by a huge 19.9 percent in October and the knock-on effect lasted into November when revenue was down 27.9 percent – another record for the largest ever drop. If you combine the two-week period to Nov. 9, which included the six days worth of closures, revenue was off 63 percent compared with 2011. Wow.

7. The year of the mass market in Macau

2012 will be remembered as a year when Macau proved the doubters wrong with one sector helping the market to maintain its luster – the new raft of mass-market visitors. Analysts have been falling over themselves at the success of the mass market with figures showing they’re actually four times more profitable than the VIP whales the enclave has relied on for so many years. Mass market visitors also mean that money is spent on other things apart from casino gambling and it marries together with Macau’s belief that it needs to diversify to stay successful. A reliance on mass-market visitors means less of a dependence being placed upon junkets, as the money flowing in and out of the market from VIPs is a lot lower. No junkets means no money having to be paid in “commission” and we can expect the mass market trend to continue into 2013.

The mass-market’s performance has also helped out Macau as a whole with the enclave posting a gross gaming revenue record when it saw MOP27.7billion pass through the tills in October. Next year could see the same record broken again and don’t be surprised if we start to see casino firms building everything else besides casinos in their resorts in future.

8. Mobile arrives in AC and Macau

As we edged towards the end of the year, two casino destinations at totally different ends of the spectrum decided to embrace mobile gambling for the first time. New Jersey has been looking at gambling bills for the entire year and one of those that saw little in terms of obstacles standing in its way was one allowing gamblers to use mobile devices. Much like when Nevada started out it’s limited to gamblers using devices within the city’s casino. This could be extended to the entire state eventually and will tie in well with any online sports betting regulation that may be passed.

Macau’s decision to allow mobile gambling came out of the blue when you put it up against AC. It’s very similar in that it allows mobile gambling by wireless networks “inside gambling areas especially authorized” by the enclave’s regulator. As yet there are little details available on Macau’s mobile gambling industry. Once it cranks up though you can be sure that it’ll be extremely lucrative for all those involved.

9. Singapore amends Casino Control Act.

Just as it looked as though another Asian destination was about to pummel Las Vegas into an embarrassing defeat in the worldwide casino market, the government in Singapore decided enough was enough. The proliferation of gambling had gone too far and the Singapore government wrote up a new Casino Control Act. It was first proposed back in July with a 109-page bill outlining a number of regulations with the two resort operators – Las Vegas Sands and Genting – liable for maximum fines of 10 percent of the previous year’s gross gaming revenue.

The new rules were eventually passed in November with the severe fines mentioned above relating to violations of “social safeguards”, which is supposed to minimize the amount locals can gamble at casinos. It also adds daily and annual entry levies, visitation limits, and restrictions on the amount of business that junkets can do. As you can expect the share prices of the respective casinos plummeted and Singapore’s loss could ultimately be the Philippines gain.

10. Expansion in the USA

While much of the US gambling industry has spent its time speculating over how online will roll out, the casino industry continued to proliferate across the country’s 50 states. A number of states across the length and breadth of the country decided to try and tap into the gambling habits of their citizens with each state showing varying levels of progress.

If we’re starting off big, which we are, then there’s nowhere quite like the 12-acre casino that was completed in Maryland back in June. Maryland Live! became the third largest venue in the whole country and saw the tills ringing after some 500,000 visitors breezed through its doors in the first month. Barely days after it opened companies were clamoring for a sixth casino licence in the state. That measure saw Penn National Gaming and MGM International breaks records for the most money spent on a political campaign ever. It eventually passed and means that a sixth casino will be built in the state – whether Penn National Gaming likes it or not.

Massaschusetts had already passed its casino bill by the time 2012 opened for business. There was plenty going on in the state over the 12 months though as the North Eastern territory stayed true to its word by delaying any licensing until at least 2014. Casino firms are likely to have to spend $4billion to secure their place as one of the three casino resorts

If you’re going for sheer volume of venues being opened then Ohio definitely takes the prize. People were questioning whether Ohio actually believes the Mayan prophecy of the world ending such was the speed with which they pushed ahead with construction in 2012. The state’s first ever casino, the Caesars-owned Horseshoe Casino Cleveland, opened its doors on May 14, and was swiftly followed by the Hollywood Casino Toledo on May 29. Then came the Hollywood Casino Columbus on Oct. 8 and the promise of one more in the near future. After that…plans for a fifth.

Illinois has seen gambling support split almost 50/50 in 2012 with it first looking as though new venues in the state were nailed on. The expansion would see five extra casinos across the state including “the jewel in the crown” that would be a casino in downtown Chicago. Support started to wane towards the end of the year and it’s another state that will look to press ahead in 2013 – if it can.

Florida trod a different path to their fellow US states by killing off their casino expansion bill back in February before deciding the best way to secure a future for the state’s gambling industry was to school themselves on it. It’s likely to be two years until this is done and patience is advised.

Pennsylvania reopened the bidding for Philadelphia’s second casino licence and is set to award it to one of six firms that are interested in building the venue. Mississippi is expected to open a new venue any day now with Oregon likely to renew plans for a casino in 2013 after a year that saw their plans fall by the wayside. Texas started to see a push towards casinos on Nov. 12 with a bill likely to be introduced that will allow casinos containing slot machine to open up in the state. Kentucky is another state that is set to renew efforts for a casino bill next year.

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