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Inside Gaming Column: Big News Seen Ahead from Wynn, Adelson9 August 2004Plowing ahead. Developers Sheldon Adelson and Steve Wynn haven't been spooked by the spotlight on mergermania in the gaming industry, even if Wall Street investors have. Word is Adelson is planning a secret groundbreaking in the next month for his Palazzo resort adjacent to The Venetian on the Strip. And Wynn is planning a grand announcement in the next two weeks about Phase II of Wynn Las Vegas, the second tower he has planned for the old Desert Inn site. Wynn also faces a 2006 deadline to finish the first phase of his $700 million Macau casino resort and a July 2009 deadline for Phase II. ¥ ¥ ¥ Taking center stage. The proposed $9.4 billion merger of Harrah's Entertainment and Caesars Entertainment was at the top of a global list of mergers and acquisitions in July, Reuters reported this week. Data from Dealogic showed $177 billion in deals last month, sharply above the $126.8 billion recorded in June and up 37 percent from the year before. Among the top U.S. deals, Adolph Coors Co.'s $4.3 billion offer for Canadian brewer Molson came in a distant second to Harrah's. ¥ ¥ ¥ Where forth art thou? Although analysts say more casino megamergers are in the works, they also warn it is unlikely lodging companies such as Holiday Inn, Ramada Inn and Hilton Hotels Corp. will jump back into the industry with acquisition proposals. Word on Wall Street is that gaming companies will never sell for the same multiple-to-cash flow that lodging companies earn. The reason: lodging companies are seen as real estate plays while their kissin' cousins, casino companies, are still seen, and likely always will be, as product-oriented and inherently riskier investments. ¥ ¥ ¥ Simmering debate. A curious thing happened on the way to Nevada Gaming Commission's July approval of Station Casinos buying Gold Rush Casino and Magic Star Casino. Regulators spent nearly an hour considering state antitrust law as it relates to gaming, and then decided it did not apply to Station. The state's 4-year-old regulations have never been used in an enforcement action against a merger, but Chairman Peter Bernhard said he expects the same issues to arise more seriously over coming months. ¥ ¥ ¥ Dollars and sense. Why should Clear Channel Entertainment sink $35 million into a pre-shrunk version of "Phantom of the Opera" at The Venetian? Analysts say such musicals usually cost $10 million. But at 90 minutes, Clear Channel will be able to mount 10 performances weekly, demand should be hot with surging visitor numbers and union actors in Las Vegas make less than their Broadway counterparts. Will Venetian owner Sheldon Adelson, known for his union adversity, stand for union contracts on his site? The Inside Gaming column is compiled by Gaming Wire Editor Rod Smith. You can contact him by phone at (702) 477-3893, fax (702) 387-5243 or e-mail at rsmith@reviewjournal.com. Copyright GamingWire. All rights reserved. |