Posts Tagged ‘SEC’

Caesars Officially Bails out of China

Sells off lonely Macau golf course for $438 million

by , Aug 14, 2013 | 7:10 am

Caesars bought 5 percent of an entire Chinese city with hopes of opening a new casino. But don't expect to see a WSOP Macau anytime soon. [Image: Macau.com]

Pulling the flag? Caesars bought 5 percent of an entire Chinese city with hopes of opening a new casino. But don’t expect to see WSOP Macau on TV anytime soon. [Image: Macau.com]

Caesars Entertainment Corp. on Friday ended the company’s nearly six-year flirtation with Macau.

The casino operator sold its 175-acre golf course near the Chinese gaming enclave’s Cotai Strip region for $438 million to an Asian developer.

The deal, which was disclosed within the company’s quarterly report filing with the U.S. Securities and Exchange Commission, is expected to close by the end of the year.

Caesars said it entered into a purchase agreement [last] week with Pearl Dynasty Investments Ltd. The buyer paid Caesars $65.7 million as a deposit for the land. Caesars can retain 10 percent of the purchase price, $43.8 million, if the deal collapses.

The company said it would use the proceeds from the transaction, which it estimates to be $420 million, to pay down debt. Caesars Entertainment has a gaming industry-high of $23.7 billion in long-term debt.

The company did not comment on the deal beyond the SEC filing.

In 2007, Caesars, which does not have a Macau gaming license, paid $578 million for the land, the site of the Macau Golf Course, with the intent to develop a hotel-casino complex.

But the Macau government never awarded additional gaming concessions and has not shown intent to increase the number of licenses beyond the current six concessions and sub-concessions.

Caesars, then known as Harrah’s Entertainment, never submitted an application in the Macau licensing process in 2001 after the Chinese government ended a 40-year monopoly in Macau that was controlled by Hong Kong billionaire Stanley Ho.

MGM Resorts International, Wynn Resorts Ltd. and Las Vegas Sands Corp. all operate resorts developments in Macau.

Caesars Entertainment Chairman Gary Loveman, who turned down a deal to acquire Wynn’s sub-concession in 2006, has said not entering the Macau gaming market was the biggest mistake the company ever made.

Macau gaming revenue was a record $38 billion in 2012, more than six times the revenue produced by Las Vegas casinos. The Macau gaming market is up 16 percent through the first seven months of 2013.

Caesars renamed the development Caesars Golf. Last year, the company took a $101 million write-down on the land when it put up the site for sale.

Shares of Caesars closed at $18.36 on the Nasdaq Global Select, up 75 cents or 4.26 percent. Caesars stock has more than doubled in value this year, and at one point Friday, reached an all-time high of $18.76.

Caesars is in the process of spinning off Planet Hollywood Resort, its interactive gaming business and a planned Baltimore casino into a separate company majority owned by the gambling giant.

In an SEC filing in July, company officials said they would raise $1.18 billion from selling stock for the new public entity.


Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.


Las Vegas Sands Disputes Chinese Bribery Allegations

DOJ, SEC investigations ongoing, along with anti-Adelson media bias?

by , Mar 7, 2013 | 2:00 pm

SheldonAdelsonLas Vegas Sands Corp. called media accounts of the company’s self-reporting that it may have violated federal law that bans the bribing of foreign public officials “misleading and sensationalistic.”

In a statement released Sunday night, the casino operator, which is more than 53 percent owned by billionaire Sheldon Adelson, said it did not violate the anti-bribery provisions of the Foreign Corrupt Practices Act.

On Friday, Las Vegas Sands, in a one-sentence statement within the company’s annual report filing with the Securities and Exchange Commission, said its audit committee found possible violations of the Foreign Corrupt Practices Act.

“As part of the annual audit of the company’s financial statements, the Audit Committee advised the company and its independent accountants that it had reached certain preliminary findings, including that there were likely violations of the books and records and internal controls provisions of the FCPA,” Las Vegas Sands said in its Form 10-K filing.

More…


Las Vegas Sands Finds Possible Crimes in Bribery of Chinese Officials

SEC and DOJ investigation of Venetian/Palazzo parent ongoing

by , Mar 5, 2013 | 10:00 am

LasVegasSandsLas Vegas Sands Corp. may have violated federal law that bans the bribing of foreign public officials, the casino operator told the Securities and Exchange Commission on Friday.

In a one-sentence statement within the company’s annual report filing, Las Vegas Sands said its Audit Committee found possible violations of the Foreign Corrupt Practices Act.

“As part of the annual audit of the company’s financial statements, the Audit Committee advised the company and its independent accountants that it had reached certain preliminary findings, including that there were likely violations of the books and records and internal controls provisions of the ( act),” Las Vegas Sands said in its Form 10-K filing.

But Las Vegas Sands added it has “improved its practices with respect to books and records and internal controls” in recent years.

More…


Are China’s Whales Fleeing Macau for Vegas?

Nevada Pays a Price for Bad Chinese Markers

by , Aug 2, 2012 | 12:53 pm

Maybe Southwest Airlines can loan Macau its Shamu fleet.

The Macau situation we reported on last month is getting worse. Macau gaming revenues grew only 1.5% in June, the slowest growth rate in three years, according to this Las Vegas Review-Journal article. And based on data from both the Wynn and Las Vegas Sands, more of China’s whales appear to be flying to Vegas to gamble.

In its latest Securities and Exchange Commission filing, 75.6% of all wagers on Las Vegas Sands’ Vegas table games were made on credit issued to whales. This is the highest whale credit number reported by LVS in at least eight years. It’s five percentage points higher than 2011 and up more than ten percentage points over 2010’s credit numbers.

Meanwhile, LVS’ whale credit in Macau has been shrinking. In the last quarter only 31.2% of table game wagers were made on credit, down from the 36.9% average in 2010.

In its most recent quarterly filing, Wynn reported that 82% of its table game markers were issued to non-US citizens, primarily from Asia. That’s seven percentage points higher than the same quarter last year.

The casinos benefit when whales chose Vegas over Macau. For one thing, the gaming tax in Macau is 12% versus Nevada’s 6.75% gaming tax. But there is another tax advantage. If the whales default on their markers in Vegas, the casino companies don’t have to pay taxes on the gaming revenues generated by those markers. In Macau, they do.

It may also be an advantage for China’s whales to play in Vegas. Macau junket operators, a primary source of whale funding, break legs are known to be more vigilant about collecting on bad loans.

The only real losers in the Chinese whale migration may be Nevada tax payers who, in effect, subsidize bad whale credit.


Paperwork Mishaps at MGM and Wynn

Casino News of the Weird

by , Mar 4, 2012 | 10:49 am

Investors received the latest financial news from the world’s largest casino companies last week. And while Dan was thinking standard SEC filings from Caesars were signs of impending online poker happiness, it was the unexpected word from MGM and Wynn that really had tongues wagging.

MGM: Documents Shredded and Shares Dumped

Back in the day, gambling establishments made their problems disappear somewhere out in the Nevada desert. Perhaps that’s where we’ll find MGM’s legal documents?

MGM has been embroiled in a years-long legal battle with City Center’s general contractor Perini Building Company. The case took a bizarre turn last week when MGM notified the court that a rogue warehouse manager sold more than 500 boxes of legal documents to a paper recycler for roughly $800. 
  
Overall, it wasn’t a great news week for MGM. Billionaire Kirk Kerkorian, continued to dump shares of the casino company he founded. He reportedly raked in $268 million for the 20 million shares he sold on February 27. 
 
Wynn: Stock Halted after Premature/Erroneous Filing

The messy divorce between Wynn Resorts and one-time (?) partner Kazou Okada continues to be the fodder of many news stories. But that isn’t what temporarily halted the shares of Wynn from trading on the stock exchange on March 2.

Wynn filed a document with the SEC about getting the concession to build a new casino in Macau, the world’s hottest gaming territory. Wynn’s share price soared on the news. But minutes later, the SEC filing was pulled and shares were halted. Apparently Wynn jumped the gun on the announcement, failing to jump through one last legal hoop. Poker and investment maven Kid Dynamite goes Sherlock Holmes on Wynn’s premature 8-K ejaculation.


Steve Wynn in Partner Spat over Asian Pursuits

But who gets to keep the sushi restaurant?

by , Jan 26, 2012 | 2:29 pm

Shares of Wynn Resorts tumbled on January 12 when it came out that a Wynn director and major shareholder had filed a lawsuit against the casino company. Turns out Kazuo Okada, one of Steve Wynn’s original partners, is claiming the company made a questionable $135 million donation to the University of Macau and hasn’t been sharing its financial information with him. Reuters has a nice write-up here.

The veiled implication is Wynn’s sizable donation might have been less than philanthropic — bordering on a “pay to play” ante to retain favor in the world’s most lucrative gaming destination. (The competing Las Vegas Sands’ Macau operation is currently under DOJ and SEC scrutiny for possible infringement of the Foreign Corrupt Practices Act, as referenced here in a Wall Street Journal blog.)

Wynn claims Okada’s lawsuit is just a smoke screen to mask the fact that Okada had been working behind Wynn’s back to develop a casino in the Philippines. You can read all the tawdry details in A Partners’ Fight Erupts at Wynn.

How will it end? Perhaps better than Steve Wynn’s marriage. After all, Wynn recently told the press, “I love Kazuo Okada as much as any man that I’ve met in my life.”

Wynn shares have since recovered from the drama at the start of January, but still have a ways to go in 2012 before reaching 2011 highs.


Caesars Public Offering

Preliminary IPO teaser brings us 300+ pages closer to fully legal online poker

by , Dec 28, 2011 | 11:13 pm

caesars harrahs czr IPO online poker

CZR FTW?
“Poker Poker!”

It feels like we’ve been talking about Caesars going public since before they were Caesars (we have) … but their latest S1/A filing with the SEC suggests not only that CZR really is might be ready to kick it Zynga-style with a big fat IPO … but also that any public offering from the worldwide gambling empire may be in preparation for imminent legalization of US online poker.

While such hefty levels of high finance are still probably a little beyond my ken … you can read the nearly 300 pages of Big Casino corporate speak and decide for yourself. Somewhere in here, I’m pretty sure, is a blueprint for the future of poker and/or online gambling.

At a minimum, I found this snippet on page 7 suggesting that Caesars is getting ready for something big related to online gambling poker:

We believe that additional jurisdictions will legalize online gaming due to consumer demand, a broader understanding of the need to regulate the industry and to generate income through taxes on gaming revenue. As such, we support efforts to regulate the online gaming industry to ensure that consumers are protected. We believe that the potential for online gaming is substantial and believe that we will command, at a minimum, our fair share in any legal jurisdiction. An H2 Gaming Capital study conducted in 2010 projects that the global online gaming market will grow to $36 billion in revenues by 2012. We believe that the largest opportunity in online gaming in the near term is the legalization of online poker in the United States. [emphasis added]

There’s tons more in this document worthy of perusal … some of which I’ve already skimmed. And it doesn’t take much to see how an actual Caesars IPO — not just talk of it — could-well coincide with legalized American online poker hubbub (finally!) reaching critical mass.

Caesars, after all, formerly known as Harrah’s, was a publicly traded company until going private shortly after passage of the UIGEA in 2006. Changed their name to Caesars in November 2010 — the last time they prepped seriously for an IPO (right after their boy Harry Reid won re-election and owed them a favor) only to withdraw plans for a public offering of stock shares right after someone told them the lame-duck online poker Reid bill was just a farce for other political purposes a couple weeks later.