The Las Vegas Sands Casino hit pay dirt in the fourth quarter of 2017, watching its net revenue grow 11.7% to reach $3.4 billion, compared to $3.08 billion for the same period a year earlier. Due to soaring revenues, the casino was able to report income of $2.81 billion for the year, up from $1.67 billion in 2016, an astonishing 68% increase.
As with many other major casino conglomerates, the Sands bottom line was helped greatly by its investments in Macau, where the company saw a 94% Q4 hotel occupancy rate, despite having added an additional 3,000 rooms last year. This led the Sands to declare a record one million occupier nights for the quarter. At the same time, the Venetian Macau remained one of the most visited casinos in the world, having attracted an incredible 290 million guests since its opening back in 2007.
Sheldon Adelson, the Sands CEO, plans to keep pushing the booming Macau market, expected to be worth $52 billion by 2022. The rebranded Londoner (presently the Sands Cotai Central), once reconstruction is complete, will offer more rooms than the Venetian and the Parisian combined. The Sands is investing around $1.1 billion in the project, which is expected to be completed in 2020.
“The structural advantages that enabled us to drive mass non-gaming growth were fully evident during the quarter. The scale and range of our hotel suite inventory, the diversity of our non-gaming offering, especially in retail and entertainment and the unique benefit of inter-connectivity between our Cotai properties. These advantages allow us to attract more overnight visitors than any other operator, as well as increase their length of stay,” said Adelson on the company’s Q4 performance.
New York Online Gambling Bill Advances
The New York Senate has advanced a bill in support of regulating online gaming in the Empire State. The Racing, Gaming and Wagering Committee, in an attempt to regulate real money online card games for the third time in three years, voted almost unanimously to pass the draft legislation on to the Senate Finance Committee.
The bills main proponent, Republican State Senator John Bonacic, is optimistic the bill will clear the Senate this year.
“There are many media reports that the [commercial] casinos aren’t meeting their revenue expectations,” Bonacic said at a meeting last Tuesday. “This would be another tool in their toolbox to enhance revenues, if we allowed them to do it. This will be the third time that the Senate has passed this bill, and I know Assemblyman [Gary] Pretlow, who chairs the Racing and Wagering [Committee] in the Assembly, is supportive of the bill. I know he will continue to use his best efforts to move it in the Assembly.”
With New York in the final stages of building out its brick and mortar casino industry and the $1.2 billion Resorts World Catskills set to open for business next month, the online card playing legislation may well receive an unexpected boost. Word on the street and around the capitol is that there is not likely to be any movement on regulating online card playing until all four of the states massive casino venues are open to the public.
As New York residents spend around $1 billion a year gambling in neighboring states, Pennsylvania’s move to legalize online gambling last year could prove a further impetus to state legislators hoping to cash in on online gambling tax revenues and keep the much-needed cash at home in the state’s coffers.
China continues illegal gambling crackdown
China is set to continue its crusade against illegal gambling in the Year of the Dog, according to statements made by the Ministry of Public Security deputy minister Huang Ming as reported by the official state media service Xinhua.
Minister Ming is reported to have told attendees at a national video conference that illegal gambling was a social harm that posed a threat to national security and that new fronts were opening in the country’s war against illegal gambling, particularly unauthorized online gambling sites. Huang is reported to have ordered police to crack down on the “umbrella” infrastructure that supports such activities in rural communities, such as the networks of underground banks that aid Chinese gamblers and allow them to play. He further added that individuals found to be aiding and abetting illegal gambling activity, if found out, could expect to be “harshly punished”.
Since beginning its crackdown in 2012, Chinese authorities have stepped in to confront 1.7 million cases of illegal gambling activity involving 5.9 million suspects. The Supreme People’s Protectorate reported last year that a total of 710 individuals had been charged with online crimes in the first months of 2017, including illegal gambling, a number up 80.7% over the previous year.
With the exception of state run welfare and sports lotteries, all forms of gambling are illegal in mainland China. Special administrative regions such as Macau and Hong Kong remain the exception.
Hung steps out of The 13 luxury hotel and casino project
The ostentatious Hong Kong property developer and former co-head of investment banking for Merrill Lynch Asia, Stephen Hung, has officially stepped out of his over the top Macau luxury hotel project The 13.
Initially planned to tap into the sea of Chinese whales headed to Macau, The 13 was conceived of as an uber luxury hotel and casino project focused exclusively on Asia’s top 1%. The original name of the project, Louis XIII tells much of the tale, as soaring costs and out right decadence, combined with a dramatic drop in the number of Chinese VIPs heading to Macau after the mainland government began its crackdown on gambling in 2012, forced delay after delay.
The 13 informed the Hong Kong exchange last week that Hung would be stepping down from his positions as the firm’s executive director and joint chairman. At the same time, The 13 announced that some 82.5 million shares in The 13 Holdings, approximately 9% of the issued capital, would be transferred from the Pride Wisdom Group, a company jointly owned by Hung, to a company owned by current The 13 deputy chairman Tom Lau Ko Yuen. This, a day after The 13 announced that its planned March opening would be delayed once again.
The ill-fated property was originally slated to open back in 2016, but sinking VIP markets and a liquidity crisis that saw The 13 Holdings share value fall by half, forced innumerable delays. The company has since cautioned that “further funding is required for completion” if The 13’s dreams of a decadent gambling utopia are ever to see the light of day.