Wednesday, February 24, 2010

Harrah's CEO: Las Vegas still weak - 22nd February 2010

Harrah's Entertainment Inc sees few signs that Las Vegas is recovering from the slump that began with the financial crash of 2008, the company's chief executive said on Monday at the Reuters Travel and Leisure Summit in New York.

Citywide gambling revenue in Las Vegas has begun to stabilize, but room rates are still heavily discounted as casino operators compete to attract visitors.

"We are the cheapest date in the world ... That generates lots and lots of visitors," said Gary Loveman, CEO of Harrah's, the world's largest gambling company. "Las Vegas remains weak and will remain weak for the foreseeable future."

He also said Las Vegas group business bookings for 2011 are "encouraging," but 2010 remains soft.

Loveman attributed the prolonged downturn to customers' lack of cash amid the economic downturn and increased competition from new Las Vegas Strip resorts like MGM Mirage's $8.5 billion 6,000-room CityCenter.

Harrah's last week acquired the Strip's troubled Planet Hollywood resort by spending about $70 million to buy its discounted debt and agreeing to take over a $554 million mortgage.

"We got a building for a fraction of replacement cost," Loveman said.

Planet Hollywood gives the company seven contiguous resorts on the east side of the Las Vegas Strip -- it also owns Caesars Palace on the west side of the Strip.


Harrah's, which was acquired by private equity firms Apollo Management APOLO.UL and TPG Capital TPG.UL in 2008, relies on Las Vegas and Atlantic City, New Jersey, for about 40 percent of its earnings.

The company, which has more than 50 casinos in six countries, also operates in regional U.S. gambling markets like Tunica, Mississippi, New Orleans and southern Indiana.

Loveman said Harrah's remains interested in a presence in China's Macau -- the world's largest gambling center -- but is not actively discussing such a deal.

"We do have an interest in Macau. We think Caesars is the best brand for that market," Loveman said.

The Chinese government has issued six gambling licenses in Macau, and U.S. companies MGM, Las Vegas Sands Corp and Wynn Resorts Ltd have casinos there.

The Harrah's CEO declined to comment on whether the company would consider a deal involving Australia's Crown Ltd, which owns a stake in Macau operator Melco Crown Entertainment.

During the recession, Harrah's has managed to avoid defaulting on its debt by renegotiating with its banks and buying bonds back at discounted prices.

The company, which now has a total debt load of about $19 billion, faces no major maturities before 2013, when nearly $6 billion comes due.

"It is possible that may be extended," Loveman said.

Meanwhile, Harrah's will focus on its massive customer database to continue driving business at its casinos.

Loveman said the company is in the process of rolling out the next iteration of its loyalty program -- called Total Rewards -- to include much more individualized, real-time targeting of customers.

"We think it enhances margins ... but mainly it makes for a much more satisfied customer," he said.

The CEO expects the new system to be up and running in about a year in Las Vegas, pending regulatory approvals.

Loveman said it will allow Harrah's to offer frequent gamblers things like a free hotel night if occupancy is low or a special cocktail before they even think of it.

It's like "Medicare comes to casino beverages," he said.

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Friday, February 19, 2010

PartyGaming rise, broker ups to "buy" - 18th February 2010

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Shares in online gambling group PartyGaming add 2.1 percent after Oriel Securities raises its recommendation on the firm to "buy" from "hold", saying it looks undervalued, citing its growth potential.

The broker says based on its forecasts of $158 million of EBITDA in 2010, the shares are trading on an adjusted price earnings ratio of 13.2 times and 8.7 times EBITDA.

"This is an undemanding rating for a growth stock which is active in entering new regions," it says.

"The group is also well positioned to participate in the consolidation of the online gaming sector with clearance from the U.S. Department of Justice and around $120 million of cash resources to pursue M&A opportunities."



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Monday, February 15, 2010

James Packer gets his polo complex - 11th February 2010

James Packer has been granted planning permission to build a sprawling new British polo complex reported to be costing about $36 million.

The private facility, on 132.5 hectare Manor Farm, near the tiny West Sussex village of Selham, is not far from Great House Farm, the 38 hectare polo complex at Stedham, owned by his father Kerry during the 1980s.

Polo pitches on the nearby Cowdray Estate were once frequented by polo-loving Prince Charles and Princess Diana and are still a favourite haunt of royals, celebrities and the very wealthy.

Pop star Robbie Williams and billionaire Roman Abramovich both recently owned sprawling estates in the area.

Planning documents outline Mr Packer's intention to make Manor Farm the UK base of his Ellerston polo club.

There had been some local opposition to the plan, partly over increased road and helicopter traffic.

But Chichester District councillors gave the go-ahead during a planning meeting at 11am local time on Wednesday (10pm AEDT).

Ten out of 12 councillors voted in favour of the plan.

It caps a good start to 2010 for Mr Packer.

His wife Erica gave birth to their first son, Jackson, heir to the family's fortune, in early February.

And profits at Mr Packer's troubled Macau casino ventures were reported to be up in January.

His new polo complex will create four full-time jobs and four seasonal posts, the Chichester District Council told AAP.

Three related planning applications, submitted by Conpress (Hong Kong), were also considered by the council.

They outlined Mr Packer's plans to take a lease on Manor Farm, a dairy pasture, and convert it into a polo playing area with associated exercise tracks, stables and yards.

Existing agricultural barns will be converted to stables and seasonal accommodation for grooms.

Locals questioned whether the area was big enough to sustain such a complex.

Others outlined their support for the plan, saying it would bring much-needed investment to the area.

"The proposed new tenant at Manor Farm has a proven track record of making significant improvements at the private facility his family previously established at Stedham," one resident wrote.

Roger Comber, son of the retiring farmer that currently leases Manor Farm, said Mr Packer has proven popular with locals.

"The applicant has proved to be a popular figure and has a proven track record of operation," he wrote.

Kerry Packer faced opposition from local residents, mainly over noise and disruption, when his complex was built in the 1980s.

Selham has a population of just a few hundred, a handful of shops and a single pub - the Three Moles Inn.

Sunday, February 14, 2010

Alan Jones rescues cash-strapped Thorpe - 13th February 2010

Olympic swimming legend Ian Thorpe has vowed to bounce back after his personal finances took a hit in the global financial crisis.

He reluctantly confirmed he recently suffered serious cashflow problems after shedding lucrative sponsorship deals to focus on his university studies, News Ltd newspapers say.

When broadcaster Alan Jones became aware of his friend's situation, he rang Westpac boss Gail Kelly to seek her help to restructure Thorpe's financial affairs, News Ltd says.

Thorpe has now streamlined his interests, declaring he wants to lead "a happy and simple life".

"Like my sporting career, one of my strengths is my resilience to bounce back from any setback," he said.

"It was pretty obvious that he wasn't all that well sorted," Jones said this week. "There were a lot of loose ends and he didn't know where all his money and investments were.

"Ian's had no training in this area because he's spent so much of his life in a swimming pool. So I rang Gail Kelly for him. Simple as that.

"Gail got someone from her personal banking unit - who coincidentally lived just two streets away from Ian - and they set up an appointment. He's now got all his finances sorted out in the one area."

Thorpe, 27, recently completed his first year of a double degree in linguistics and psychology, which he found "enjoyable but very challenging".

Friday, February 12, 2010

Luxury revamp at casino - The Age - 12th February 2010

It is Australia's most expensive hotel at more than $27,500-a-night. Now Melbourne's Crown Towers Presidential Villas is to be overhauled and its private gaming salons expanded.

A spokesman said the refurbishment of Crown Towers is focused on the invitation-only sanctum between levels 29 and 36 that is frequented by the world's wealthiest gamblers. It is where golfer Tiger Woods stayed during the Australian Masters.

Spokesman Gary O'Neill would not confirm whether the renovation would add more extreme-stake tables in its VIP salons.

But industry sources said several of the hotel's penthouse villas were being removed to make room for a larger ''super high-roller'' gaming area. (Credit: The Age)

*Read the full article here

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