The government of Macau won’t issue any licenses for new U.S. companies to operate casinos in the world’s largest gambling market, Gary Loveman, chief executive officer of Caesars Entertainment Corp., predicted.
Loveman, in a presentation yesterday to analysts and investors in Las Vegas, said he has spoken at length with Chinese officials and that his company was unlikely to obtain a concession to operate a casino in Macau, the only part of China where casino gambling is legal.
“This is a country that doesn’t really need the money and they have slowed everything in Macau very substantially,” Loveman, 52, said. “There will not be another license issued to an American casino operator.”
Caesars, the largest owner of U.S. casinos, was shut out a decade ago when the Chinese government opened the Macau market to foreign companies. Six operators, including U.S.-based Las Vegas Sands Corp., MGM Resorts International and Wynn Resorts now hold concessions. Caesars’ attempts to break in have failed as the market swelled to $33 billion last year.
“I’ve talked to caddies, I’ve talked to everyone,” Loveman said. “I don’t think you’re going to see another American casino operator have a very bright future in Macau.”
China is trying to develop domestic businesses, Loveman said. He sits on the board of Fedex Corp., which received authorization last month to offer its courier service in eight Chinese cities. The company had sought 50 territories, Loveman said.
Caesars acquired a golf course in Macau in 2007, prior to the company’s 2008 $30.7 billion buyout by affiliates of Leon Black’s Apollo Global Management LLC and David Bonderman’s TPG Capital, with the intent of developing a resort on the property. The company paid $577 million for the land, the Las Vegas Review Journal reported.
Loveman discussed China after presenting other avenues for the Las Vegas-based company to increase its business, including new casinos the company has opened or hopes to open in Ohio, Maryland and Massachusetts. Caesars on Oct. 1 unveiled new tenants at Linq, a $550 million entertainment complex it is building at the center of the Las Vegas Strip.
Caesars dropped 1.4 percent to $6.23 at the close in New York. The shares have declined 31 percent since a February initial public offering.
The company may take steps to reduce its $22.7 billion in debt, including raising money from its private-equity investors to repurchase Caesars bonds at a discount or issuing shares in an online subsidiary that offers casino-like games on Facebook.com and mobile devices, competing with Zynga Inc.
A share sale would depend on a market rebound for Zynga, Loveman said. The San Francisco-based social-games company has seen its stock price fall about 70 percent this year.
Las Vegas Sands, controlled by billionaire Sheldon Adelson, this year took a $100 million writeoff on two parcels it hoped to develop in Macau. The company also hasn’t received approval to sell condominiums there that it has already built out. MGM and Wynn have new casinos under development in Macau.
Robert Goldstein, president of global gaming at Las Vegas Sands, said yesterday that his company still had land to develop and expected to get approvals to sell the condos at some point in the future.
“It will happen on the Four Seasons condos,” Goldstein said at the Global Gaming Expo in Las Vegas. “Although we’d like to see them approved yesterday, we’ll wait patiently and it will happen. What happened in Macau is beyond belief and we’re very grafeful for what we got.”