Vol. 7 • No. 20 • June 1, 2009

Vol. 7 • No. 20 • June 1, 2009

GGB NEWS June 1, 2009

COVER STORY:

Genting Shows Interest In MGM Grand Macau

In wake of a New Jersey report calling MGM Mirage partner Pansy Ho “unsuitable,” Malaysian-based Genting buys $100 million in MGM bonds and is showing interest in buying the MGM Grand Macau.

 

FEATURED STORIES:

WEEKLY FEATURE: Illinois: They’re Baaackkk!

Lawmakers in Illinois are looking at a plan to expand gambling in order to address a state budget shortfall, even though House Speaker Michael Madigan says it’s dead.

 

Congress Looks For Solution To Carcieri Decision

Tribes and members of Congress are getting together to see how legislation can solve some of the issues brought up by the recent Carcieri decision that would limit off-reservation casinos. A hearing of the Senate Indian Affairs Committee, chaired by Senator Byron Dorgon met last week.

 

Casinos Austria Sells Gold Reef Stake To Allan Gray

Gaming concern Casinos Austria is out to expand its field of operations this year, with moves into areas of gaming other than its traditional casino product and a renewed focus on businesses in which it holds a majority stake. This sale of a minority interest in an African company, whose flagship is Gold Reef City in Johannesburg, gives the operator extra cash and time to spend on its new goals.

 

Massachusetts Senate Vetoes Racetrack Slots

Current talks show the conversation has begun about one or more casinos; in New England, Massachusetts is the only gaming holdout. George Carney, who owns Raynham-Taunton Greyhound Park, is apparently out in the cold.

 

Ukraine Heading For A Fall

The temporary shutdown of all casinos and slot halls in Ukraine following a deadly fire in one business may prove to be somewhat more than a temporary situation.

 

ALSO:

Delaware Supreme Court OKs Sports Betting Plan

Harrah's To Launch Online Poker In Europe

Details Of Crown-Victoria Tax Deal Emerge

FANTINI'S FINANCE: Crossing Our Fingers

Schaeffer exits Fontainebleau Resorts

Genting Shows Interest In MGM Grand Macau

By Staff   Fri, May 29, 2009

Genting Shows Interest In MGM Grand Macau Pansy Ho will allow MGM to rebut DGE report


Resorts World Bhd, a subsidiary of Malaysian gaming giant Genting Bhd, last week purchased $100 million in MGM Mirage bonds in a flurry of activity suggesting the company is interested in buying MGM’s stake in the MGM Grand Macau.

The potential of a sale of the interest started two weeks ago when the New Jersey Division of Gaming Enforcement ruled that Pansy Ho was “unsuitable” as a partner to MGM Mirage in Macau. MGM Mirage received approval from four other states where the company is licensed—Nevada, Mississippi, Illinois and XXXX—but the New Jersey agency objected to Ho’s connections to her father, Stanley Ho, the longtime gambling boss of Macau.

While the DGE report is damning, the conclusions of the report can only be implemented by the state Casino Control Commission, which will hold a hearing on the report sometime in the near future, but no date has yet been announced.

In addition to the purchase of the $100 million in MGM debt, which was produced recently by the restructuring of MGM finances, the Lim family, which controls Genting, sold 9 percent of its shares in Genting's Singapore subsidiary, Genting Singapore. Resorts World Bhd is constructing a $3 billion integrated on the city-state’s Sentosa Island, due to open in 2010. The sale netted the family more than $400 million, which some analysts say could be used to buy the MGM interested in the Macau property.

Should the New Jersey commission uphold the DGE report, MGM would be required to either sell its interest in Macau or sell its interest in the Borgata in Atlantic City, which was developed jointly with Boyd Gaming, the casino’s operator, and relinquish its New Jersey casino license.

Because of its commitment to the Singapore development, the government may refuse to allow Genting to invest in Macau, which is considered the chief competitor to the two Singapore casinos (although the first Singaporean casino to open later this year, Sands Marina Bay, is owned by Las Vegas Sands, which owns two Macau casinos). The Lim family may be the MGM Grand Macau investor rather than either Genting or Resorts World.

Genting issued a comment to a Malaysian newspaper. “The notes represent a good opportunity for Genting to expand its investment portfolio and enhance returns on its existing cash balances With yield returns in excess of 10 percent, the investment generates an attractive return compared to what is currently attainable in the money markets or in other secured investments regionally especially within the Genting group's core leisure and hospitality industry.

"Further, the notes will be secured against high quality gaming and entertainment assets in Las Vegas, thereby giving downside risk protection to the investment," Genting said.

Meanwhile, Pansy Ho said it was MGM Mirage’s responsibility to respond to the DGE report. She said it was MGM’s licenses that are at stake so it’s up to the company to respond. But she said she reserves the right to take some legal action, following MGM’s response.

“For the time being, there's nothing I can do, because it is certainly not a procedure involving myself,” she said. “Only when MGM Mirage has made their decision, then will I know the implication on our project.”

MGM Mirage says it plans to answer the allegations in the report.

“While we disagree with the recommendation of the report, we look forward to presenting our position at the hearing," MGM spokesman Gordon Absher said.

Analysts were quick to point out that Genting’s MGM investment could be the precursor to other purchases.

“If complications in the MGM-Pansy Ho JV led to the departure of either party, Genting group’s subscription to the bonds would not hurt its chances of potentially filling the void. We continue to believe that an eventual presence in Asia’s gaming hub of Macau would strengthen the group’s position as a formidable regional gaming player,” said CIMB Investment Bank in a note to investors.

Kenanga Investment Bank suggested that MGM may be forced divest its stake in MGM Grand Macau under regulatory pressure. “Should MGM Grand Macau be up for sale as we postulated, it could offer Genting an excellent opportunity to immediately access the Macau gaming market without going through the lengthy asset building process,” the bank noted. “The acquisition of MGM Grand Macau, if it materializes, could be a huge re-rating catalyst for both Genting and Resorts.”

GOODS & SERVICES,

Konami Approved As First Kansas Supplier

Fri, May 29, 2009

Konami Gaming has become the first slot manufacturer approved to sell machines to the four new casinos in Kansas.

The Las Vegas-based subsidiary of Konami of Japan obtained a temporary certification from the Kansas Racing and Gaming Commission to sell slots to a casino under construction in Dodge City, and three other proposed facilities in Sumner and Wyandotte Counties, authorized under a 2007 state law. According to the commission, the company is the first slot-maker to receive the initial nod. (Permanent certification will be voted on by the commission.)

“We are pleased to receive the first of what we hope are many applications from slot machine manufacturers,” said Stephen Martino, executive director of the Kansas gaming commission.

Under the regulations set up under the 2007 law, gaming suppliers must submit to background investigations and meet a number of requirements, such as prior licensing or certification to sell slots in Illinois, Indiana, Iowa, Missouri and New Jersey. Only suppliers of slots, tables and money-counting machines must be certified vendors under the law.

GOODS & SERVICES,

Slot Sector Results Provide Bright Spot

Fri, May 29, 2009

While casino operators across most of the industry reported declining revenues last year, gaming equipment manufacturers provided one of the few bright spots in casino industry revenues.

According to the American Gaming Association’s “State of the States report, equipment manufacturers logged a 6.7 percent increase in sales for 2008, compared to the previous year, with overall revenues of $12.7 billion.

According to the report, new technology in the slot sector accounted for the rise in sales, as well as new casino venues in several parts of the country.

Analysts say server-based gaming, which will debut in force next year at CityCenter in Las Vegas, will spell more good news for slot manufacturers.

GOODS & SERVICES,

Suzo Happ Has New Portugal Partner

Fri, May 29, 2009

Parts supplier Suzo Happ and gaming machine distributor Trade Game have partnered to provide the Portuguese market with Suzo Happ products.

Suzo Happ, whose European headquarters is in the Netherlands, has grown to become the world’s largest supplier of spare parts for gaming-related devices.

Trade Game has developed into a key distributor of gaming machines and attendant devices to the Portuguese industry, representing major brands such as Bally, Novomatic, Unidesa and MEI.

Marcos Pinto, international operations manager at Trade Game, said, “It is our company strategy to expand the solutions we can offer to the gaming industry here in Portugal. Suzo Happ is a perfect fit for us with such a wide product portfolio. Furthermore, the dedication to providing new solutions such as the new topper range, along with a strong technical team, both corresponds to and stresses the similar value philosophies of our two companies.”

Joost van Egeraat, Suzo Happ’s regional casino sales manager, said of the new agreement, “We are very excited to have Trade Game on board. We understand the value of the relationships Trade Game has built up over decades in Portugal thanks to the dedicated support Trade Games provides. Thus, it is only natural for us to work side-by-side in Portugal with Trade Game. With such a strong product range and exciting new gaming solutions, we are sure that the market will greatly benefit from this business relationship.”

GOODS & SERVICES,

PureDepth Marketing MLD Displays

Fri, May 29, 2009

PureDepth, Inc., the display company that produced the “Multi-Layer Display,” or MLD, technology used by International Game Technology in a series of slots with 3D video displays, announced the creation of a Japan-based business unit that will expand the reach of the technology to new applications both inside and outside the gaming industry.

IGT used PureDepth’s MLD technology to create the “REELdepth” series of slot machines, which use the technology—it involves placing two LCD displays on top of each other to create a realistic 3D effect—to simulate spinning reels in multi-game units.

IGT’s new multi-game machines look like reel-spinners, but players can choose between three-reel, four-reel and five-reel games, and the games themselves feature animation on the reels and 3D second-screen bonus events.

PureDepth held a press conference in Tokyo to announce that the MLD technology will be used to create a variety of image displays that are not possible with existing LCD technology. The new Tokyo office will market a variety of displays under a license contract with Sanyo Electric Co. Ltd., and in a separate agreement with Abilit Corporation, which is using the panels for gaming machines in the Japanese pachislo market.

For the future, PureDepth officials say they will introduce the MLD technology into mobile gaming devices and smart phones. “We have already prototyped a smart phone equipped with the MLD,” said Yutaka Nagata, general manager of PureDepth Japan.

GOODS & SERVICES,

Octavian, Gextech Announce Alliance

Fri, May 29, 2009

Octavian Global Technologies announced it has signed a worldwide agreement with Gextech to roll out Gextech’s “Spot The Ball” virtual football game to operators of land-based fixed odds betting terminals in Great Britain and elsewhere.

Gextech’s latest development of its “Fantastic League” virtual football game will kick off on the Octavian Symphony platform available for downloadable gaming systems.

Spot The Ball is a multi-lingual football game that updates a standard betting format using the latest technologies to reproduce the complexity of team sports, and replicate betting opportunities readily available in real football games.

In Spot The Ball, realistic animated action sequences are played out on the playing terminal screen. The ball is passed from virtual player to player, as well as being deflected from its course by tackles and interceptions. The winning number is the square containing the ball when the action is randomly stopped. An on-screen betting panel allows customers to increase bets and select other betting options.

“We are delighted to have teamed up with Gextech and excited by the potential of Spot The Ball, “ said Harmen Brenninkmeijer, CEO of Octavian. “There are many sports-based betting games, but most are simple racing games which do not require complex probability analysis or detailed graphics. Spot The Ball uses the same core engine as Fantastic League. This populates a virtual stadium, adds fans and players and employs game rules that simulate realistic, second-by-second football match action.”

“We are excited to be working with Octavian as they have extensive experience of delivering game content on a broad range of playing terminals, and a wide range of land-based venues,“ added Peter Glancy, managing director of Gextech. “That knowledge, coupled with the scalability of Octavian’s Symphony platforms, will enable us to quickly roll out Spot The Ball to a worldwide audience.”