iGaming News all over the world 24.07.2010

24.07.2010, Investors bet on Hong Kong casino operators / Canadian Online Gambling Site Was Compromised / Poker rooms incomes increase in France

Investors bet on Hong Kong casino operators
Most Hong Kong casino shares shone even against Friday's bright market performance, and some remain upbeat on the sector despite a recent slowdown in Macau's gambling revenue.

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Gross gambling revenue in June in the former Portuguese colony on China's southern coast fell 20% from May's record high, likely because the World Cup distracted high-stakes gamblers. Still, revenue jumped 65% from a year earlier. Gross gambling revenue is the amount wagered minus the winnings returned to players, which measures what a gaming operation earns before taxes, salaries and other expenses are paid.

June revenue totaled us$ 1.2 billion, compared with the us$ 2 billion recorded in May, according to data released earlier this month by Macau's Gaming Inspection and Coordination Bureau. The development of Macau's Cotai Strip is still the biggest wild card in the long term, analysts say, which could be boom for not just the companies with a Cotai presence, but for the overall sector as well.

"In our view, all six operators will benefit if a critical mass is created at Cotai, attracting more tourists to visit Macau. If Cotai fails, not only Cotai casino operators will suffer, Peninsula players will also get hurt, as their growth opportunity also lies in Cotai," said Citigroup analyst Anil Daswani in a note to clients Friday.

Sands China and Galaxy Entertainment Group remain Citigroup's top picks, as they are the only operators with new casinos opening in Cotai in 2011, Daswani said. On Friday, shares of SCL and Galaxy were both up 1.5%, while Hong Kong's Hang Seng Index was up 1.4%. China's Shanghai Composite rose 0.5%. Tycoon Stanley Ho's SJM Holdings was up 1.8%. But Wynn Macau slumped 0.9%.

Wynn Macau's U.S. parent, casino operator Wynn Resorts, said that the preliminary second- quarter operating loss for Wynn Las Vegas widened to us$ 17.2 million from us$ 8.3 million a year earlier, even as its revenue increased 1.7% to us$ 318 million. In regional trading, Japanese Nikkei Stock Average rose 1.8%, and the broader Topix added 1.5%. Australia's S&P/ASX 200 climbed 1.8%, and South Korea's Kospi was 0.7% higher.

The Las Vegas Sands will release its second-quarter results next Wednesday. Citigroup's Daswani forecasts, its Macau subsidiary, to have grown net revenue by 37% from a year earlier to us$ 1.01 billion, thanks to Macau's strong second-quarter gross gaming revenue.

"We believe that Sands China's decision to shift its focus towards direct VIP business has led to junket VIP business migrating from SCL to Wynn Macau. Our channel checks seem to echo our view," Daswani said.

Tour operators' commissions on the organized junkets to Macau from mainland China can squeeze margins, even on high-end VIP junkets, so analysts say the direct VIP business can be significantly more lucrative for operators.

SCL currently has about a 19% market share, down 3 point from last month, Daswani said, but the loss "is not necessarily a bad thing" for SCL if it can offset this by increasing the volume at its direct VIP business.

According to Citigroup's channel checks, Macau's gross gambling revenue for the first 18 days of July reached 8.9 billion patacas, up 77% from a year earlier and up 2% from the previous month. Citigroup has a buy rating on SLC, but nonetheless there is a risk that investors will reduce their portfolio weightings in Macau in the months ahead, particularly if gaming revenue growth continues to slow.

Other Macau casino operators include Melco Crown Entertainment MGM Macau, a joint venture between Pansy Ho and MGM Resorts International (MGM).

Yogonet.com / Nasdaq

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Canadian Online Gambling Site Was Compromised
Gambling for fun and entertainment in British Columbia Canada got a little risky when personal information was compromised by the new recently launched government operated online gambling PlayNow website. The Liberal government in the province has admitted to the security breach and has been trying to downplay the incident as minor and without serious consequences. Speaking in the provincial capital of Victoria, President and CEO of the B.C. Lottery Corporation, Michael Graydon said, the accounts belonging to 134 users had been compromised. Graydon said that after the major re-launch of the website, a certain amount was wagered by accounts controlled by someone other than the owner and in 12 cases, someone other than the owner of the account was able to see personal information. Cases that revealed a portion of credit card numbers and bank information, "similar to what you would find on the bottom of a personal cheque," were few. The B.C. lottery corporation is admitting it kept tight lipped about the secure breach for a period of time after the event was discovered in order to be respectful of the customers rights to be informed of the problem before they read it in the newspaper. Graydon said, " Our first priority was really to our players and making sure we got to them first," "We wanted to make sure that they heard from BCLC and not read it in the newspaper." B.C. Lottery Corp. officials have been able survey the activity of each account and are balancing all accounts enabling all winnings to be honoured. Graydon said the data crossover issue occurred due to extremely high volumes of activity adding that tens of thousands of people logged on to the PlayNow site after the re- launch. "We had volume assumptions and we tested against those assumptions,” Graydon explained "Obviously our assumptions were incorrect." Information and Privacy Commissioner Elizabeth Denham said this about the BCLC, " I think they’ve been responsible,"

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Poker rooms incomes increase in France
Since online poker regulation came into force in France two weeks ago, the incomes of French poker rooms exceeded the numbers they collect in the French market in global venues, according to Martin Lerby, director of Ongame network.

Ongame network was the first that received authorization to operate in the French territory. Bwin room opened its doors last July 1st and during those first two weeks, winning expectations have increased, something not so difficult to achieve considering the high rake they are charging.

On top of Ongame, there are other networks and rooms that received the license required to operate in France. However, some of them are not surely so satisfied are Bwin. For example, PokerStars has assured that it is losing money in France and is receiving complaints by French players.

In spite of the complaints and discomfort, Gigi Levy, Director of 888, one of the latest networks that has been granted a license from ARJEL, assured that “the future of the online gaming industry is in the regulation and in legal and secure gaming environments. We have the necessary proposals to obtain a big share in the French market.”

Yogonet.com / Poker Red

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