News INTERNATIONAL UPDATE Sands ponder Bethlehem sale
THE 700 EMPLOYEES OF THE CASINO Queen have taken over the running and ownership of the casino, buying it for US$170m with the employees taken on the casino’s $31m debt as part of the deal. Located in East St. Louis, Illinois, Casino Queen Hotel and Casino is now operating as an Employee Stock Ownership Plan following approval from the Illinois Gaming Board. The US$170m acquisition creates a trust for the participating employees, who are eligible for dividends. Casino President Jeff Watson says he hadn’t heard of another casino in the nation operating as an ESOP. “To my knowledge, it’s the first ESOP casino in the country,” Mr. Watson said. “It allows employees to become beneficial owners in the company. The more successful the company is, the more value employees have individually in their retirement accounts. We stick to our core business plan, giving people the best gambling in town, giving people quality food at affordable prices and the best customer service. That philosophy has led to a loyal customer base that allows us to be competitive in the market.”
BMM INTERNATIONAL’S OFFICE IN PERU are celebrating five years of operations this month, providing jobs to the local market and helping several regional manufacturers expand their markets internationally, including the US. Drew Pawlak, SVP Business Development for the Americas, said: “BMM made the decision to open in Peru as it was one of the only formally regulated markets in all of South America. Over the last few years we have seen so many changes in the region. In particular we are very pleased to have supported this process of change for MINCETUR and Peruvian stakeholders.”
“Since we opened in 2007, MINCETUR has brought all locations under the licensing program and they have rolled out SUCTR standards and the vast majority of locations are now connected to their Data Center,” said Mr. Pawlak. “Furthermore, they are now in the process of promulgating server based gaming standards. It's really been great to watch and support the team at MINCETUR. Under their guidance the market has really stabilized and matured.”
Peter Palexas, CEO of Intervision Games, added: “In small countries like Peru, having a real local lab with global coverage really helped us to understand the international requirements, and then of course test our products.”
US operator Las Vegas Sands is considering the sale of its successful Pennsylvania casino
Having invested US$800m in developing the second top earning casino in North America’s second most profitable casino market, Las Vegas Sands is now believed to be looking at offloading its Sands Bethlehem Casino in Pennsylvania.
The price being touted for the casino, which generated $438m in 2012, is a cool $1bn. Sands hasn’t moved to dismiss the media rumours with Spokesman Ron Reese, saying: “We’re very pleased with the financial performance of the Bethlehem property, and the role we have played as a partner in the community. But we do not comment on market speculation and rumour.”
However, Sands President Michael Leven has already questioned if the company would ever be able to make the roughly $80m a year in EBITDA needed just to pay off the debt following its investment in Bethlehem. Sands leads the way in table gaming in Pennsylvania. It spent $126m adding 129 table games in July 2010. They generated the biggest table haul in the state at $146m in GGR, up $40m from 2011. The table increase at
“If we get our price, we think it may not fit in the long run
for our company. It’s a smaller product. We’ll
probably look to sell it. However,
somebody’s got to pay the price.
We’re just as happy to keep it.”
MICHAEL LEVEN,
President and Chief Operating Officer, Las Vegas Sands.
Gauselmann to expand Lübbecke production site
The Gauselmann Group is about to expand its development and production location in Lübbecke, Germany with increased logistics space. The new site is to measure approximately 11,200sq.m. with net floor space of around 19,000sq.m. and will essentially connect with the present logistics area. The façade design will fit in with the existing buildings.
Chairman, Paul Gauselmann stated: “Due to the high financial burdens that we could be threatened with in a few years as a consequence of the current legislation in Germany, the time has now come to carry out an in-depth review of all our processes and thus implement this long- planned expansion. Only if we
further increase our efficiency and effectiveness will the continued existence of the group of companies as they are today then be secured on a long-term basis. That is why we have made the decision in these difficult times with much political headwind to invest a double digit million sum in our Lübbecke location.
“Furthermore, the new construction will also include certified logistics space for the export business. We manufacture our products for the global market in Lübbecke. I expect that the export business that currently lies at over 40 per cent of group turnover will further increase in the future. Thus, further certified logistics space is of absolute importance.”
Sands accounted for more than half of the $68m gain the Gaming Control Board reported for all 11 casinos across Pennsylvania. The property’s 3,000 slots meanwhile generated $291m in 2012.
KDP Investment Advisor Barbara Cappaert said a sale made good business sense. “We do not dismiss the possibility,” she said. “The price, if in fact is $1bn, is aggressive.” She highlighted the fact that out of the entire Sands portfolio, Sands Bethlehem generates the least amount of cash flow and revenue for the company. It takes roughly 80 per cent of its cash flow and revenue from Macau and Singapore. She believes the motivation to sell could be to fund future projects in Toronto, Spain or Japan.
World record for Net Ent jackpot
On January 20, 2012, Mega Fortune, the popular online slot game from Net Entertainment, paid out the biggest online jackpot in the world to date. The jackpot amounted to about €17.8m. The winner is a 40-year old male in Helsinki who played at the Åland-based operator Paf. ”This is the second time that Net Entertainment’s games give a winner the world’s largest global online jackpot. The high liquidity that Net Entertainment’s progressive slots offers, result in very rapid jackpot buildup, and is a very good tool for the operators to attract players. We congratulate the winner and Paf to this big win, and look forward to hopefully making many more players millionaires in the future.”, says Per Eriksson, CEO at Net Entertainment.
February 2013 PAGE 35
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