MGM Mirage May Get New CityCenter Investors
Shares of MGM Mirage jumped nearly 50% on Friday when it was revealed that private equity firm Colony Capital and Australian-based casino company Crown Ltd might team up to invest in the troubled Las Vegas CityCenter project. CityCenter still needs approximately $800 million in funding before it can access an additional $1.8 billion from lenders to complete construction.
Last month Dubai World, MGM's joint partner on the project, filed a lawsuit involving the relationship and stated, "The current path of the project is simply unsustainable given our partner's financial troubles." Dubai World held back its scheduled $100 million March payment for CityCenter. MGM paid $200 million in March, including Dubai World's share, to keep the project going.
Both Colony and Crown already have interests in Las Vegas casino properties. Colony currently owns a 75% stake in Stations Casinos. Crown owns a 19.6% stake in Fontainbleu Resorts, which is currently developing a casino on the Vegas Strip. In 2007, Crown offered $1.75 billion for Cannery Casino Resorts. Although the deal was approved by Nevada regulators earlier this year, Crown terminated the agreement last month, exposing itself to up to $250 million in breakup fees. Last summer, Crown abandoned development plans to construct a casino on the former site of the Wet'n'Wild Waterpark in Las Vegas.
888 Holdings Posts Strong 2008 Results
888 Holdings, parent company of Pacific Poker, announced a 6% increase in profits before taxes for 2008. The company grew overall revenue by 20%, despite a 4% decline in poker revenue. 888 significantly expanded its business-to-business operations, adding 14 business clients in 2008, including Sportech PLC in June 2008. 888 has already added four new clients in 2009, including a deal signed this month with the horse racing industry publication, The Racing Post.
While 888 Holdings' results demonstrated solid growth in 2008, the company noted it was not immune to the economic downturn. CEO Gigi Levy noted slowing growth starting in September and a rapid decline in the euro negatively impacted the business. But Levy was confident that the company had made the right strategic decisions to weather current economic conditions, stating, "Just as we managed to grow market share after the industry was hit by the closure of the U.S. market, we are confident we will outperform this market in these challenging times and continue to grow our business."
Playtech's Solid Gains Get Boost from Currency Conversion
Online gaming software provider Playtech Ltd reported stellar earnings for 2008, with revenue growth of 70% and a 79% increase in adjusted net profits. It's a little difficult, however, to put Playtech's actual growth in perspective. While Playtech was impacted by the declining euro, like 888 Holdings and other firms, Playtech did something unusual to counter the negative effects. For this report, and apparently going forward, Playtech stopped reporting its earnings in U.S. dollars and is now reporting in euros. To complicate matters further, all past-year comparisons have been converted to euros, using a euro-to-dollar ratio of 1.5777 – almost the highest valuation of the euro in ten years. In effect, Playtech has deflated past results and inflated current results.
Currency magic aside, Playtech did grow in 2008, aided by 15 new licensees, including four Italian operators. Playtech also closed on its acquisition of a 29% stake in William Hill in December, 2008. Playtech also reported seeing growth in average daily earnings of about 8% in the first 11 weeks of 2009.
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