CasinoCityTimes.com

Gurus
News
Newsletter
Author Home Author Archives Author Books Search Articles Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Related Links
Recent Articles
Best of Howard Stutz

Gaming Guru

Howard Stutz
 

INSIDE GAMING: Stimulus may go out of pockets, onto felt

4 February 2008

, Benjamin Spillman and Arnold M. Knightly

LAS VEGAS, Nevada -- Will the economic stimulus package now being debated in Congress amount to a windfall for the nation's casino industry?

Yes, says one Wall Street analyst.

Deutsche Bank's Bill Lerner told investors last week the $150 billion stimulus package could translate into roughly $750 million in expenditures by casino patrons that could find their way to the industry's gambling tables and slot machines during this year's second and third quarters.

The proposed package, which passed in the U.S. House of Representatives last week, could result in $100 billion in rebates to 117 million American taxpayers. Businesses could receive $50 billion in tax rebates.

Historically, Lerner said, roughly 0.75 percent of consumers' annual disposable income has been spent on casino gambling.

"With this in mind, we believe the same portion of expenditures could apply to individuals sharing tax rebates of $100 billion," Lerner said.

Lerner estimated the tax rebates could equate to an additional 1.3 percent to the industry's expected revenue growth this year.

Controversial Hong Kong billionaire Stanley Ho, who once held the monopoly on Macau's casino market, wants to increase his chip count. Ho hopes to raise $1 billion by selling a 25 percent stake in his SJM casino operation through an initial public offering.

Federal law enforcement authorities have claimed Chinese organized crime triads influenced Ho's casinos. Today, Ho currently operates 18 of Macau's 28 casinos. According to the Macau Daily Blog, the 86-year-old casino tycoon wants to spend $1.4 billion on six new casino projects over the next three years in Macau.

According to the blog, Ho's share in Macau's gaming revenue has shrunk. At the end of 2006, Ho's casinos accounted for 42 percent of Macau's $6.95 billion in annual gaming revenue. The addition of three new resorts in 2007, including the $2.4 billion Venetian Macau and the $1.2 billion MGM Grand Macau, cut Ho's stake to roughly 20 percent of the $10.3 billion in revenue collected by Macau casinos in 2007, according to the Blog.

Las Vegas-based Ameristar Casinos has opened the first 100 rooms of its 400-room hotel tower at its casino in St. Charles, Mo., just outside of St. Louis.

The dockside casino reopened an expanded facility in 2003 and spent $265 million to add the hotel tower, an new parking garage, spa and an indoor-outdoor pool area.

Ameristar expects to open 80 to 100 additional rooms each month and to have the entire tower open by spring.