When he acquired Aztar Corp., back in 2006, Columbia Sussex CEO William J. Yung III also became one of the company’s debtors. So what’s his $36 million worth today? According to the Wall Street Journal, 100 grand or less. If that weren’t enough to make the ColSux/Aztar deal the all-time biggest casino-sector wipeout of the last 15 years, consider that Carl Icahn’s “$200 million” credit bid (i.e., no money down) was placed with debt acquired at 27 cents on the dollar. So Icahn has himself a new casino for a tidy $54 million outlay.
In a less-reported development, Icahn also gained a controlling position in Tropicana Entertainment. Without either its Atlantic City or Las Vegas Trops, it’d be a car without an engine, a gaggle of riverboats and motels. Exactly where this leaves CEO Scott Butera and what role he’ll play remains an open question. Hopefully, either his or Icahn’s first move in Atlantic City will be to replace floundering Trop General Manager Mark Giannantonio (a Yung crony) with someone more up to the job.
Movement at Cosmo: The GM of Caesars Palace, John Unwin, has resigned. He’ll become CEO of the stalled Cosmopolitan in October. While it’s still unclear under whose aegis the casino will be run, Unwin’s hiring is the first concrete move to get some gaming expertise on board since Deutsche Bank seized the property.
Whining in Macao: Those two “integrated resorts” in Singapore haven’t even opened yet and won’t for another half a year, but Stanley Ho (whose venerable Hotel Lisboa is seen above) already has his panties in a bunch. According to Bloomberg News, the ancient casino oligarch has been wringing his hands about the burdensome, “serious issue” posed by Macao‘s 39% tax rate.
Boy, Singapore must be a more serious threat than I’d given it credit, if it’s got a Communist Party suck-up like Dr. Ho all a-twitter and taking issue with the government. He’s still in better shape than his American rivals; the attempt to graft Vegas-style megaresorts onto Macao has left them badly exposed to anemic market conditions. Ho’s gambling-centric strategy gives him less cause for worry.
Today Singapore, tomorrow the U.S.? Even while lender’s remorse has paralyzed American banks and stalled any hopes of “unbundling” the U.S. casino industry, diversification may be coming from an unlikely corner. Malaysia’s Genting Bhd, riding a sustained runup in its stock, has $2 billion in the kitty, is raising more and could pump $7 billion into casino acquisitions.
That isn’t to say there aren’t a lot of “ifs” and “buts.” Still, Genting’s fundamentals appear far more sound than those of say, Las Vegas Sands. It’s also in a position to deal a serious blow to Sands in Singapore. Not only will its Sentosa Island casino-resort open before Marina Bay Sands, but customers who “subscribe” to a $1,388/year entrance fee to one casino or another must play exclusively at that casino for the year. Once again, Sheldon Adelson‘s inability to finish a megaresort on schedule threatens to bite him in the butt.
