Where the future lies

Does anyone see a pattern here?

Local supply of Gambling Addicts are destroyed, financially hosed.

Profits from Gambling Addicts disappear.

Solution?


EXPANSION!   The Universal Solution that knows no boundaries.

Eliminate any pretense of consumer protection. Buy off a few more politicians. 

The ultimate result?    Implosion!   Give it time....keep up the pretense in the meantime.  

Echo says the future lies in VIP dollar

Date August 16, 2012

Colin Kruger

WITH rival casino operators, James Packer's Crown and Asian giant Genting, hovering over its share register, investors were happy to shrug off Echo Entertainment's 80 per cent drop in net profit to $42.2 million yesterday.

Echo chief executive Larry Mullen said the company gained a share of Australia's VIP market during the year but would still consider a joint venture with Crown if it made sense for shareholders.

''I believe the biggest opportunity for us is the VIP segment, and I say that for us both domestically and internationally,'' he said.

Speaking on Crown's proposed joint venture - which would use Echo's licence to add VIP gaming to the luxury hotel Crown is planning for Barangaroo - Mr Mullen said: ''We're open to anything that would relate to shareholder value.''


Echo's chips are down. Photo: Bloomberg

Crown and Genting each have about 10 per cent of Echo and have applied to the gaming regulator to lift their stakes. Echo said it was hard to compare its results, considering it was still part of Tabcorp for most of the previous period, but the biggest difference was one-off costs, such as the $38 million in expenses at its revamped Sydney casino, The Star, and $30 million in write-offs related to VIP gamblers.

A lower win rate on the VIP business led to a slight decrease in gross revenue to $275 million, compared with the 57 per cent normalised growth expected. Soft consumer spending also had an impact, especially in Queensland.

Deutsche Bank analyst Mark Wilson said the result was in line with guidance, but the performance of The Star ''continued to disappoint''.

The shares fell 11¢ to $4.07, but Mr Wilson said corporate activity would support the price. The stock has risen more than 30 per cent since February when Crown said it had doubled its stake to about 10 per cent. It has since applied to the casino regulators to lift its stake to 25 per cent. VIP may be the future for Echo, but the good news out of the results yesterday came from the contribution of less well-heeled clientele who were spending up on Echo's poker machines.

Echo said it lifted its share of poker machine revenue in New South Wales to 8.2 per cent, up from 7.4 per cent. ''Our largest margin contribution would come from that part of the business,'' Mr Mullen said. Revenue and margins at The Star are expected to improve, with most of the $860 million refurbishment completed.


http://www.brisbanetimes.com.au/business/echo-says-the-future-lies-in-vip-dollar-20120815-2490i.html