Cool breeze from Macao; Harrah’s panty raid stymied

One of Stanley Ho‘s lieutenants has scanned the 2010 horizon and doesn’t like what he sees. Sociedade de Jogos de Macau division president Frank McFadden believes VIP play will soften in 3Q-4Q10, as stock-market losses take their toll (a viewed shared by Macao‘s government). Also, the fine hand of the Chinese government is being felt in a diminution of stimulus spending and stricter lending requirements. Yes, whenever the Macanese pot comes to a boil, Peking isn’t slow to turn down the burner.

Retreat on the VIP front is expected to counterbalanced (somewhat) by increased mass-market play. This is good news for Las Vegas Sands and MGM Mirage, not so auspicious for Wynn Resorts, SJM and possibly Melco Crown Entertainment. Still, Steve Wynn is going ahead with a 2011 expansion into the Cotai Strip™ (above) even as SJM and MGM hang back. (Anybody know if Sheldon Adelson is still pushing that culturally stone-deaf “Asia’s Las Vegas™” meme? How’d he like it if people called Las Vegas “America’s Macao”?)

As for SJM, it’s also banking on the prospect that Macanese officials will confiscate land previously leased to its rivals but still undeveloped, then hand it over to Ho’s company. McFadden concluded with a not-so-veiled shot at former employer Adelson, saying, “It would be arrogant to think that by building what they call an integrated resort, you can change the consumer behavior of 1.4 billion people.” Nobody ever parts company with Sands on good terms, seems like.

MGM, by the way, will be $6.3 million richer after unloading its temporary Detroit casino to that city’s police department. As recently as late 2007, MGM was toying with hanging onto the place (a decommissioned IRS building) for potential casino expansion. But the market never warranted that, so MGM stands to get up some pocket money and a reassuring next-door neighbor into the bargain.

No experience necessary. It’s not quite “socialism” but legislators in Rhode Island are toying with a kooky formulation whereby two casinos would be privately owned but run by the state. (Kansas is attempting to do the reverse and that’s not been going very well.) Casino companies needn’t bother with the R.I. market, I guess, since their operational expertise wouldn’t be required. This could open the field to myriad non-gaming companies but S&G fails to see the Lege’s point. If ever there were a case for privatization, this would be it.

Lawmakers are also turning a deaf ear to Apollo Management (i.e., Harrah’s Entertainment in drag) and its attempts to buy up the debt of insolvent Twin River racino. At the risk of sounding like a Sharron Angle shill, this has been the dark side of Sen. Harry Reid‘s casino-bailout bill from last year. Its obvious intent was to incentivize the gaming industry to repurchase its debt (tax deferments being the carrot) and this is what some companies, MGM most notably, have done. Harrah’s and its private-equity co-owners, however, saw in it a golden opportunity to conduct panty raids on other companies’ debt, gobbling up assets like Planet Hollywood even as they told their own creditors to suck it. The road paved with good intentions would, it seems, lead to Harrah’s.