Macau’s Studio City Will Default on Debt, Warns Analyst

Macau’s<span id="more-11859"></span> Studio City Will Default on Debt, Warns Analyst

Studio City Macau: Despite its numerous non-gaming attractions it’s failing woefully to attract the mass market crowds.

Studio City Macau, Lawrence Ho and James Packer’s $4.5 billion integrated casino resort on the Cotai Strip is in trouble and might default on the $1.41 billion loan used to complete the construction associated with hotel.

That’s the word from score agency Standard and Poor’s Financial Services, which this week issued a negative outlook for the resort’s bonds, off the back of a 42.5 percent slide in their value.

Macau’s first ever TV and movie-themed resort opened in October 2015, with Packer’s girlfriend Mariah Carey headlining the night that is opening since the likes of Robert De Nero and Leonardo DiCaprio mingled among the list of crowd. It even had its opening evening movie, The Audition, a short movie directed by Martin Scorsese and starring De Nero, DiCaprio and Brad Pitt.

Packer called it the ‘coolest 15 minutes ever made,’ but, with an $80 million cost, it could equally be described as the most advertisement that is expensive made.

Brand New Concept Doesn’t Drive Crowds

But for the glitz, Studio City was conceived in a markedly different climate that is economic before Chinese President Xi Jinping’s anti-corruption drive halted the area’s success story and delivered profits tumbling for 26 straight months.

Studio City went big on non-gaming amenities, positioning itself as a non-VIP gaming destination to be able to woo China’s burgeoning class that is middle.

This has everything from television and movie production facilities to a Batman themed 4-D flight-simulator roller coaster ride and a figure-eight Ferris wheel, but because of a slowing Chinese economy, visitor numbers to Macau are falling and the hordes of middle classes have failed to materialize.

Melco Distances Itself

Melco Crown owns a 60 per cent stake in the property, while US hedge funds Silver Point Capital and Oaktree Capital own a 40 percent stake. Bloomberg reported this that Melco Crown has sought to distance itself from any kind of rescue package for the casino week.

‘Studio City Casino Macau is a credit that is entirely separate and its particular debt is non-recourse to Melco Crown Entertainment Limited. […] Investors should not assume that Melco Crown Entertainment Limited will provide any financial support to Studio City Casino Macau or it would step in for Studio City Casino Macau,’ said a Melco Representative.

There is speculation that that Melco is trying to put the find yourself the hedge funds because it wants to buy them out for the good price, and that the negative rating from Standard and Poor’s will strengthen its position.

Duterte Takes Shock U-turn on Online Gambling

‘Gamble until you die. I do not really care,’ said Philippine President Duterte Wednesday, clearly in an even more mood that is forgiving. (Image: rapeller.com)

Philippine President Rodrigo Duterte’s hardline crackdown on online gambling took a twist that is unexpected this week.

On Tuesday the federal government’s gambling operator-regulator, PAGCOR, announced it was in the entire process of ‘readying applications. that it had been ready to license online gambling firms that targeted ‘non-locals’ and’

‘We don’t know yet how saleable it is; there might be no takers,’ PAGCOR Andrea that is chief Domingo to Reuters.’Or there could possibly be numerous applicants,’ she added brightly.

PAGCOR hopes that the brand new licenses might offset a number of the income lost by Duterte’s systematic dismantling for the country’s online gambling giant, Philweb. Until recently, Philweb operated 299 online gambling boutique cafés through the Philippines, which offered online video poker and slots via approximately 8,000 terminals.

Final the company’s operations contributed around $12.2 million in taxes to the government year.

Zero-tolerance

Duterte swept to power in June on an insurance policy that promised to get rid of criminal activity and drugs. Literally. The president has leant his support to vigilante death squads that carry out the extra-judicial killings of criminals and habitual medication users with impunity.

When sworn in, he immediately set his sights on the Philippine online gambling industry, plus in particular Philweb and its chairman, the billionaire Robert Ongpin.

Ongpin ended up being agent of the ‘oligarchs,’ which he believed were ’embedded in government’ and practiced ‘influence peddling.’ Meanwhile, said Duterte, online gambling ‘had to stop’ because too many Filipinos were deciding to gamble rather of working for a living. It appeared that PAGCOR was taken completely by surprise by the announcement.

Restoration

the month Philweb was forced to announce it would wind its operations down, because of the non-renewal of its license by PAGCOR. Ongpin stepped straight down as president associated with business and, as a last-ditch bid for approval, wanted to transfer nearly all of his majority stake within the company to PAGCOR, in an attempt to truly save the company and its particular 6,000 workers. PAGCOR ended up being pelican pete slot machine big win forced to refuse.

But on Wednesday, Duterte was clearly in an even more mood that is tolerant.

‘Pay the correct taxes… Gamble unless you die. I don’t really care,’ he announced magnanimously.

Duterte is currently willing to restore online gambling provided ‘taxes are correctly collected and so they [online gambling cafes] are situated or placed in districts where gambling is allowed, which means to say, not within the church distance or schools.’

‘ I was angry because perhaps the youth are gambling and there clearly was no way of collecting the taxes that are proper’ he admitted.

Whether this implies he could be ready to permit Philweb to continue its operations as before is currently unclear.

Indiana Casino Union Does What Trump Taj Mahal Workers Couldn’t: Hits New Contract with Majestic Celebrity Riverboats

Indiana Governor Mike Pence, the current GOP contender that is vice-presidential has put his state on the map for financial gains and development during his management. Now a casino that is new contract in the Hoosier State is additionally showing up its cousin chapter in Atlantic City, having successfully negotiated for benefits, where its brethren failed.

The Indiana Unite Here casino union has effectively bargained for a contract that is new the 2 Majestic Star riverboats in Gary, a stark comparison through the union’s efforts in Atlantic City, which failed. (Image: Unite Here/youtube.com)

Indiana’s Unite Here casino union, representing chefs, wait staff, and housekeepers during the two Majestic Star riverboats in Gary, has now reached a brand new agreement with the gambling operator. On August 19, the two edges officially finalized off for a contract that increases wages over the next couple of years, while keeping the current wellness insurance programs being afforded to union members.

The deal operates through 2018.

Unite Here Local 1 spokesperson Noah Carson-Nelson told the Chicago Tribune, ‘Our people are happy. The individuals were excited that it includes raises and the same health insurance. it was settled fairly quickly and’

The Majestic Star casinos sit next to at least one another in Lake Michigan, about 30 kilometers southeast of downtown Chicago.

Neighborhood 1’s parent union, Unite Here, is the organization that is same unsuccessfully proceeded attack at the Trump Taj Mahal in Atlantic City early in the day in the summer. As a result, billionaire owner Carl Icahn announced that the casino is permanently closing on October 10.

The Trump Factor

Formerly known as the Trump Casino, Majestic Star II ended up being renamed after Trump Entertainment Resorts sold the property to Majestic in 2005 for $253 million.

The sale was section of Trump Hotels & Casino Resorts (THCR) filing for Chapter 11 bankruptcy protection in 2004. The company emerged from liquidation under the brand new Trump Entertainment Resorts name in 2005.

Trump’s record in Atlantic City is certainly questionable. But in Indiana, Trump’s riverboat was decidedly lucrative. Within the 11 years since Majestic acquired the casino that is floating it’s never won as much cash because it did when Trump was the financial admiral regarding the ship.

In 2004, total victories eclipsed $140 million. In 2015, the Majestic Star II taken in just half of that figure.

The stars that are majestic two of 10 riverboat casinos in Indiana. The Hoosier State normally home to your French Lick Resort Casino, the only land-based gambling location there, plus two racinos that offer slots and electronic table gaming.

Marked Market Differences Between Two States

Back east in Atlantic City, Unite Here Local 54 ended up being additionally fighting for higher wages and health insurance at the Trump Taj Mahal. But the bankruptcy procedure already underway whenever Carl Icahn purchased the casino allowed the billionaire to temporarily suspend pension and healthcare benefits as he worked to upright the casino’s dire financial situation.

But Icahn, who had been reportedly losing $100 million regarding the venture, stated he needed more time before restoring benefits. Workers stepped off the task in disgust, and Icahn called their bluff in a move that ultimately caused both sides to lose.

The market is quite different in northwest Indiana than in Atlantic City. When the Taj Mahal closes its doorways in October, it will become the fifth casino to shutter down since 2014 in nj-new jersey.

The Blue Chip Casino and Hotel in Michigan City, Indiana also recently negotiated effectively with Unite Here Local 1. Ameristar Casino Hotel did as well, albeit after having a lengthy and tedious process.

‘We’re happy to proceed, and happy that people did it in a equitable manner,’ Majestic Star General Manager Barry Cregan stated of the new contract.

So why would small Indiana gaming union find more success using its manager compared to the much bigger Atlantic City market? Each month, and the union’s demands would only drive those losses further into the muck because the Taj was already losing millions. In Indiana, while not thriving like they could have been over a ten years ago, casinos are apparently still making enough of a revenue in order to make union benefits a worthwhile investment.

Paddy Power Betfair Reports £47.5 Million Loss Because Of Costs of Merger

Breon Corcoran, Paddy Power Betfair CEO, said that the company would not further rule out consolidation if the right opportunity arose. (Image: Sunday Business Post)

Paddy Power Betfair has reported operating losings of £47.5 million ($62.6 million) for the first half of 2016 when comparing to profits of £106.5 million ($140.5) for the corresponding period of 2015.

CEO Breon Corcoran this week attributed the losses to one-off costs related to your merger between the two wagering powerhouses, amounting to £195 million ($257 million) in total. Paddy Power and Betfair agreed terms of their £5 billion ($6.5 billion) merger in September year that is last the offer was only finalized on February 2, 2016.

Thus, short-term losses incurred during through integration, which included some £29 million ($38.2) in advisory fees alone, are expected to be handsomely offset by cost saving synergies associated with newly combined company further later on.

In fact, Paddy energy Betfair has upped its estimate of future price saving from £50 million ($65 million) per year by 2018 to £65 million ($85.7 million) per from next year year.

A lot of those savings have come from job losings, with 650 of the combined organization’s 7,200-strong workforce having found themselves surplus to needs after the merger.

Revenue Up 18 Per Cent

‘People have actually been really diligent, there’s been a lot that is awful of work done, and promptly,’ said Corcoran regarding the integration work. ‘Paddy Power Betfair has suffered momentum that is good an amount of considerable modification.’

Corcoran additionally pointed to an 18 % rise in revenue for the period, to £759 million ($1 billion), as well as double-digit growth across all four of its core divisions. Discounting merger expenses, would have reported underlying earnings of £181 million ($238 million), Corcoran said.

On the web revenue was up 20 percent at £440 million ($580 million), while Paddy Power’s land-based bookmaking stores recorded a 12 percent increase in revenues to £147 million ($193 million). The company’s US and operations that are australian reported development.

More Consolidation Possible

‘The restructuring has become mostly complete and also the merger synergies are being delivered in front of routine,’ said Corcoran. ‘we have been producing a globe class operation by exploiting the assets that are unique capabilities of each legacy business, particularly in the key functions of technology, advertising and trading.

‘While our industry continues to be highly competitive and is exposed to the prevailing economic and regulatory environments, our strong market positions, increased scale and enhanced capabilities position us well for sustainable, profitable growth.’

Corcoran additionally refused to rule out of the possibility of more consolidation. If the right asset came up at the right price his company will be well placed to acquire it, he said, however the moment he had been focusing regarding the integration process.

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