ï»¿Melco Crown Calls Sheldon Adelson’s $10 Billion Bet on Japan, Hard Rock Scrambling for Partners
Melco Crown Entertainment won’t be intimidated by Las Vegas Sands billionaire Sheldon Adelson’s comments this week that he’s ready to spend up to $10 billion on building a casino in Japan.
Melco Crown CEO Lawrence Ho says there’s no cap on how much his company is willing to spend on an integrated casino resort in Japan.
Hong Kong businessman Lawrence Ho, the billionaire son of Stanley Ho who held a gambling monopoly in Macau for 40 years, told reporters soon after hearing of Adelson’s pledge that his company is prepared to invest even more. During the same investor conference in Tokyo, Ho explained, ‘We’ll absolutely spend whatever we need to win.’
Japan legalized commercial casinos last fall, but hasn’t determined the specific regulations for the newly liberalized industry. The country’s parliament is working to decide how many gambling licenses will be issued, but the general consensus is that just two properties will be authorized.
In a press release unveiling Melco Crown’s integrated resort concepts for Japan, Ho added, ‘There currently is no predetermined cap on our intended investment. I prefer not to constrain our dreams… with price tags, particularly at this early stage.’
Melco Crown Entertainment was founded in 2004 through a partnership between Melco International Development and James Packer’s Australian Crown Resorts.
Between Rock and Hard Place
With Adelson, a man worth over $30 billion and whose Las Vegas-based company generated over $15 billion in revenue last year alone, and the Hos targeting Japan, the remaining interested gambling companies vying for a Japanese resort license are seeing their odds diminish.
And there are other major players bidding including MGM Resorts, Wynn Resorts, and the Genting Group. All are more than capable of hitting that $10 billion investment figure should they feel the economic reward warrants the capital.
Hard Rock, however, is a private company owned by the Seminole Tribe of Florida, so it’s difficult to tell how fiscally capable they are of bidding on a gambling license. While its balance sheets are confidential, the group famed for its music-themed restaurants is making no secret about its wishes to invade Japan.
Hard Rock has 10 casinos in North America, and has Asian locations in Japan, Macau, Singapore, Malaysia, Indonesia, and India. According to Reuters, the company is looking to buy up to a 60 percent stake in a Japanese casino resort, and is currently negotiating with potential partners.
Marathon, Not Sprint
Over the next year, lawmakers in Japan will come to terms on the regulatory oversight of the casinos, as well as fixing tax rates for the properties. They will then begin fielding bids, and while that won’t formally take place for at least another year, the gambling companies are already deep into developing their proposals.
‘Melco Crown has always had a keen interest in Japan,’ Ho told investors. ‘Our commitment in Japan is for the long term.’
With only two licenses expected to be up for grabs, and a market forecasted to be capable of bringing up to $40 billion through the doors each year, the enthusiasm is certainly well justified.
Raiders Secure Financial Backing for Vegas Move Following Adelson Blow Out
The Oakland Raiders has secured financial backing to build a new home in Las Vegas, just three weeks after Sheldon Adelson pulled his $650 million commitment to the project and Goldman Sachs followed him out of the door.
An architect’s rendition of the proposed $1.9 billion stadium that may become the Raiders’ new home in Las Vegas. Ground will not be broken until the NFL gives its approval, a feat that will require a four-fifths majority vote from team owners. (Image: MANICA Architecture)
On Monday, Clark County Commission Chair Steve Sisolak confirmed rumors to FOX 5 that the Raiders had the backing of two unnamed banks, committed to filling that $650 million Adelson-shaped hole.
The Nevada legislature has approved an increase on Vegas hotel taxes in order to shoulder the $750 million it has pledged to help build the $1.9 billion stadium. The Raiders themselves have pledged $500 million towards the project.
Raiding Adelson’s Pockets
Adelson, who has been instrumental in luring the Raiders to Vegas, pulled out of the deal on the 31st of January, immediately after the team’s management took a proposed stadium lease agreement to the Las Vegas Stadium Authority without informing the Adelson family. The lease made no mention of the Adelsons as a partner, an affront that was too much to swallow for the LVS chairman and CEO.
His spokesman, Andy Abboud, told the Adelson-owned Las Vegas Review-Journal shortly after that the myfreepokies.com Raiders had been ‘trying to pick Adelson’s pocket’ on the deal, and accused them of offering ‘mixed signals’ on Vegas’ suitability as a franchise city, possibly, said Abboud, as a ‘manipulation technique.’
But Vegas’ suitability will ultimately be decided at the forthcoming NFL spring league meetings, where the proposal will need three-fourths of the vote to receive approval. That’s 24 of NFL’s 32 owners.
The NFL is anti-sports betting. It sees it as a threat to the integrity of the game, and Vegas’ status as the capital of US betting is a potential roadblock to the deal.
There is evidence, though, that this attitude is thawing, and there’s a realization within the NFL that technology means ‘the sports betting risks are no longer exclusive to Vegas,’ as Robert Kraft, owner of the New England Patriots, put it recently.
Vegas, meanwhile, is determined to keep bets on any possible future ‘Las Vegas Raiders’ games on the menu at its sports books, even if the NFL asks it not to. For Vegas, it’s a matter of pride in the integrity of its gaming industry and regulatory framework.
As Tony Alamo, Chairman of the Gaming Control Commission, said recently: ‘The integrity of gaming is so above reproach that it doesn’t matter if the team is 100 yards away or 400 miles away. What changed? Nothing.’
Finally, in another twist, the group devoted to ensuring that the Raiders stay in Oakland, fronted by NFL veteran Ronnie Lott, suffered a potential financing hiccup this week when its own financial backer, the Fortress Investment Group, was bought out by Japanese-based SoftBank for $3.3 billion, a deal that throws its funding into doubt.
Predicting March Madness an Insane Endeavour in 2017
March Madness is just two weeks away, and for those who are setting odds on the men’s basketball tournament, plenty of unknowns remain on which team is the best in the country.
Duke lost last night, but in the minds of oddsmakers, they’re still the team to beat in March Madness. (Image: John Angelillo/UPI)
Last night didn’t help. #10 Duke was one of the hottest programs, riding a seven-game winning streak that included road victories over #20 Notre Dame and #14 Virginia, as well as an at-home win over in-state rival #8 UNC.
During the run, sportsbooks shrunk the odds of the Blue Devils winning another national championship. Bovada’s most recent listing has Duke at +700, the best odds in the country, of going all the way. But last night, Duke was upended by an unranked Syracuse team on a last-second buzzer-beater.
The defending champion Villanova Wildcats, ranked #2 in the latest AP poll, also fell last night, though it was to a ranked team in #22 Butler.
The loss ended Nova’s own seven-game win streak, and puts the school at +1000 to repeat.
Betting on Gonzaga
The #1 Gonzaga Bulldogs are the only remaining undefeated team in Division I men’s basketball. But since they play in the West Coast Conference, the 28-0 group isn’t perhaps getting the respect in Vegas they might deserve.
Oddsmakers like teams that play in one of the so-called ‘major conferences.’ The power five consists of the ACC, Big 12, Big Ten, Pac-12, and SEC.
While Duke is playing teams like #8 UNC, #7 Louisville, and #18 Virginia, Gonzaga is taking on against schools like Pepperdine, BYU, and the University of San Francisco. That said, the Bulldogs are blowing games wide open and have three wins over ranked opponents, their best win coming against Arizona, now ranked #3 in the nation.
Their record is unblemished, but oddsmakers and sports bettors are struggling to get onboard. Books have Gonzaga at 17-2 to win the men’s tournament next month.
Duke Looses, Still Team to Beat
Despite the Blue Devils loss, their sixth of the year, the team is still the favorite in Las Vegas. Online sports betting sites including Bovada, 5Dimes, and SportBet also still believe in coach Mike Krzyzewski’s squad.
But before the March Madness tournament is set, bettors will get more proof on whether the continued enthusiasm is warranted.
Duke will host #19 Florida State on February 28th, and cap off the regular season by traveling to Chapel Hill to play UNC. The Tar Heels beat #7 Louisville last night, and should improve on their #8 ranking in the polls.
Duke will then play in the ACC tournament before beginning its quest to give Coach K his sixth NCAA Division I championship. For those who don’t think the Blue Devils have what it takes, there’s plenty of attractive betting opportunities.
Have a Lot of Faith
March Madness is an exciting time for sports bettors who took long odds on a Cinderella story. The unexpected is expected in college basketball, and books cater to the dreamers.
Teams likely to just barely sneak into the bracket have little to no real chance of winning it all, but that doesn’t stop bettors from taking seemingly absurd lines.
March Madness is expected to be truly mad this year, as there is no clear favorite to run away with the men’s NCAA basketball tournament next month.
Teams like Seton Hall, Texas A&M, Pittsburgh and Clemson all are at +50000 to win the title. Place just a $1 wager, and if any of those teams end up the last school standing, a $500 win is yours.
Crown Resorts VIP Business Nosedives After China Arrests
Crown Resort’s VIP revenue plummeted 45.3 percent in the first half of the year, according to the company’s first earnings call since 18 of its staff were arrested in China for alleged ‘gambling crimes.’
John Alexander, who will assume the role of Crown Resorts CEO, said that his company was in a ‘holding pattern’ over its operations in China but is seeing the situation as a ‘pause rather than a defeat.’ (Image: Post Online Media)
The drop in Chinese high-roller business drove down overall normalized profit by 9.1 percent on the corresponding year, the company said Thursday.
The staff members were detained in October 13 and 14 in at least four cities across the country, apparently for marketing Crown’s services in Macau to VIP’s on the mainland.
Despite a deadline for charges to be filed under Chinese law having long passed, they remain under arrest, without charges, at the Number One Detention Center in Shanghai.
Their fate remains unknown, but during the call Thursday, Crown was at the very least able to offer, for the first time, some clarity about the financial impact of the arrests.
Clarity on China
‘We’re in a different situation now … because of what happened in China and we’re waiting to see how that plays out before we resume traditional marketing in the region,’ said Executive Chairman John Alexander. ‘We’re in a holding pattern.’
‘Frankly, we look at that as a pause rather than a retreat,’ he added. ‘We are waiting for clarity on China and the details behind that, but no intention to retreat from where we stand in the market.’
But the arrests prompted the company to rein in its global expansion plans. Shortly afterwards it reduced its stake in Macau through the sale of $1.2 billion-worth of shares back to Melco Crown, the company through which it operates Macau casinos jointly with Lawrence Ho.
It also initiated a complete shake-up of the board, which had been criticized in the wake of the arrests, with James Packer returning.
On Thursday, it was announced Alexander, a Packer loyalist who was named chairman last month, will also take over the CEO role from Rowen Craigie next week, as the company refocuses on domestic operations.
Crown Resorts is also facing a class action lawsuit over the arrests, led, on behalf of shareholders, by law firm Maurice Blackburn. It’s their contention that the company knew its VIP strategy in China was risky and it should have communicated this to shareholders.
Shortly after the news of the detentions, Crown’s shares fell 14 percent in one day, wiping more than $1.3 billion off the company’s market value.
Stock rebounded by 8.9 percent on Thursday, to their highest level since the arrests, following the news that Crown would be paying shareholders a special dividend of 83 Australian cents per share.