VIP revenues raised eyebrows
Kazuo Okada’s eponymous Okada Manila in the Philippines, the third of four integrated resorts planned for Manila’s Entertainment City, opened “key amenities” last Friday including hotel rooms, restaurants, shops and the world’s largest multicolored dancing fountain.
The Manila Times pronounced it “the Philippines’ most luxurious property” and predicted it will “set a milestone in the country’s tourism.”
The $2.4 billion resort, which is to open in phases, was developed by Tiger Resort, Leisure and Entertainment Inc., a unit of the Japanese billionaire’s Universal Entertainment. The casino, with room for 500 gaming tables and 3,000 electronic gaming machines, opened December 30.
Elsewhere in Asia, on the Pacific island of Saipan, the opening of the Imperial Pacific resort was accompanied by an FBI raid, according to Bloomberg News.
Last Thursday, as Imperial Pacific International Holdings Ltd. prepared to complete construction of its multimillion-dollar permanent casino in Garapan, local and federal law enforcement including four FBI agents and a U.S. marshal stormed its offices and stayed for several hours, blocking entry by outsiders.
Little information was immediately available about the raid or what prompted it. The FBI said it was “not in a position to comment” on any enforcement actions in Saipan, said spokeswoman Michele Ernst. An Imperial Pacific representative declined to confirm or deny a visit by the feds.
Hong Kong-listed Imperial Pacific holds the sole gaming license in the Commonwealth of the Northern Mariana Islands, a U.S. controlled territory. Since 2015 it has been operating out of a temporary casino and personnel training center known as Best Sunshine Live, which has attracted attention because of its huge gaming revenues.
Last year, Bloomberg called Best Sunshine “possibly the most successful casino of all time,” posting numbers that “stagger industry veterans.” The temporary gaming hall, “in a mall between a laundromat and a cellphone shop,” has posted per-table revenues far greater than those at the largest resorts in Macau.
For example, in a February 2 filing to the Hong Kong Stock Exchange, Imperial Pacific said the property generated US$5.59 billion in turnover for the month at a total of 16 VIP gaming tables. That’s $1.6 billion more than the last record set by Best Sunshine in September. Reported daily revenue for each of its 16 VIP tables for the first six months of 2016 was about $170,000, almost eight times the average at Macau’s biggest casinos.
The company reported gross revenue of HKD7.49 billion (US$964.2 million) in 2016, an increase of HKD6.77 billion (US$871.56 million) year-on-year. Imperial Pacific has attributed those volumes to Chinese high rollers who sometimes bet millions of dollars at a time. The property’s VIP patrons also hail from Hong Kong, Macau, South Korea and Saipan.
“In addition, a minor portion of the group’s VIP customers has been sourced via a new licensed junket operator since August 2016,” the firm said. Imperial Pacific added that as of December 2016, 18 gaming promoters had applied for junket licenses with the local gaming regulator.
The firm’s permanent casino will offer 193 gaming tables and 365 slot machines, “which will substantially increase the company’s gaming capacity from its current level of 48 tables and 141 slot machines at the temporary facility,” IPI announced. The company said it had invested approximately US$343 million in the resort as of the end of 2016.
The chairman of Imperial Pacific is Mark Brown, a former executive of Trump Entertainment Resorts in Atlantic City. The company’s board and committee members include James Woolsey, former head of the U.S. Central Intelligence Agency; Louis Freeh, former director of the FBI; Ed Rendell, former Pennsylvania governor and onetime chairman of the Democratic National Committee; and lobbyist Haley Barbour, ex-Mississippi governor and Republican National Committee chairman.
A Rendell spokesman said the U.S. politician was unaware of the recent developments regarding Imperial Pacific. The spokesman added that an “independent, prestigious account organization” had reviewed the finances of Imperial Pacific and found them to be in compliance with all U.S. rules and regulations.
Last year the U.S. Treasury Department’s Financial Crimes Enforcement Network reportedly launched an investigation into the revenues at Best Sunshine Live, but Thursday’s raid “could be unrelated to IPI’s gaming operations,” and may be associated with safety violations and the recent death of a construction worker at the site, said a report on CalvinAyre.com.
Back in Manila, Okada Manila Managing Director Steve Wolstenholme said the newest casino resort in Entertainment City will build “critical mass” in the region and grow the market. The resort is looking to drive weekend foot traffic from 10,000 pedestrians to 50,000, reported ABS-CBN News.
Last month, Okada’s Tokyo-listed Universal Entertainment Corp. announced it would raise more than JPY23 billion (US$199 million) to complete Okada Manila through the disposal of treasury shares. At buildout the investment, Okada’s investment is expected to reach $4 billion.
