Macau Casino

A District Court judge Wednesday set back efforts by casino operator Sheldon Adelson to keep sealed pretrial depositions and other business information that his attorneys said could threaten the billionaire’s growing Chinese operations.

Rusty Hardin and Sam Lionel, attorneys for the Las Vegas Sands Corp., argued during a hearing in a case filed more than 18 months ago that releasing the sealed information could put the casino operator’s Macau gaming license in jeopardy.

The depositions and other information were provided by the casino owner and his executives in response to three separate lawsuits working their way through state and federal courts in Las Vegas. All three cases involve contract disputes with allegations that Adelson reneged on promises to compensate individuals for their help in Adelson’s 2002 acquisition of a lucrative casino concession.

Adelson was the first American to open a gaming facility in China, recouping his entire $265 million investment in the one year after it opened in 2004.

Although most of the information is still under seal, plaintiffs in a lawsuit filed against the Sands by three businesspeople who claim they helped Adelson obtain his license to operate in Macau, are trying to get the information unsealed for their case.

Wednesday’s ruling followed an August decision by Bonnie Bulla, the discovery commissioner in the case filed against the Sands by Clive Jones, Darryl Turok and Cliff Cheong, to allow most of the evidence gathered in the case, including a video deposition of Adelson, to remain confidential.

She ruled then that the evidence could be kept confidential despite repeated failures by Adelson’s attorneys to prove how the information could harm the billionaire and his businesses if it was made public.

“The burden (to prove harm) was allowed to shift impermissibly to the plaintiff in this case,” Judge Kenneth Cory ruled.

Defendants seeking to keep pretrial evidence secret normally must prove they would be irreparably harmed by the release of such information.

The case will now be returned to Bulla’s courtroom, where Adelson’s legal team will get a third chance to argue for keeping the casino owner’s deposition and those of many current and former Sands executives secret.

“It’s been extraordinarily difficult. There are former executives who we have a right, even an obligation to talk to, who won’t talk to us. … It (secrecy and confidentiality of records) has been pervasive, literally affecting every aspect of the case,” plaintiff’s attorney Don Campbell said.

In an ironic twist, some of the same information being sought in the Jones-Turok-Cheong case has already seeped out in a related case, filed by Richard Suen and Round Square Co. and set for trial in February. Suen is a Hong Kong businessman and longtime friend of Adelson’s brother, Lenny Adelson. Suen approached the casino operator’s brother about applying for a Macau casino concession. Suen also has deep ties to high-ranking officials within the Chinese government. He claims in his case that he introduced Adelson and other Sands executives to the very officials who would later figure prominently in the company’s acquisition of a Macau gaming concession.

The case was filed in October 2004 and the casino company tried to keep information from it out of the public eye as well. Some confidential information, however, was accidentally made public earlier this year by Adelson’s own attorneys.

The filings accidentally unsealed in the Suen case have since been resealed, although some information did leak out in news reports.

The Business Press, a sister publication of the Review-Journal, reported that Las Vegas Sands President Bill Weidner confirmed in his deposition that he and Adelson were summoned to Beijing at the behest of top Chinese communist leaders in 2001. The leaders, including China’s then-Vice Premier Qian Qichen and former Beijing Mayor Liu Qi, learned of Adelson’s longtime connections to the Republican Party. They also knew he coveted a Macau concession.

According to court records in the Suen case, Adelson was asked to use his connections to help kill legislation in the U.S. House of Representatives that would have potentially prevented China from winning its bid to host the upcoming 2008 Olympics.

According to depositions taken in the Suen case, Adelson called upon then-House Majority Leader Tom DeLay in 2001 to stall legislation sponsored by California Democrat Tom Lantos to keep the U.S. Olympic Committee from voting for China’s bid. The legislation was part of an American response to China’s holding 24 members of the U.S. military for 11 days after their surveillance plane crashed on Chinese territory earlier that year.

Also according to testimony taken in the Suen case, DeLay killed the Lantos legislation and Adelson’s Washington public relations firm, Patton Boggs, was instructed by Weidner to “suggest” to the Chinese Embassy that Adelson was “involved in the process” that eventually defeated the bill.

Macau’s casino patriarch, , may have confirmed the importance of Adelson’s assistance to the Chinese government when he told a Las Vegas Sands executive vice president that, “by the way, that Olympic thing, I think you guys won the bid … that’s what I hear back from my guys in Beijing,” according to a deposition from Sands executive Brad Stone that was made public in the Suen case.

Adelson eventually won his bid in 2002 despite a series of unrelated snafus, including that Las Vegas Sands initially partnered with a company that was based in Taiwan, China’s political nemesis.

Instead of being rejected for political reasons, the gaming company was at the last minute “married” by Macau’s leader to Galaxy Group, according to Weidner’s testimony, and the Taiwanese company’s own bid was rejected. Nevada gaming regulators, however, nixed the Galaxy combination after the Hong Kong company repeatedly failed to show regulators their ownership records.

Then, Macau officials, specifically Chief Executive Edmund Ho, abruptly altered the island’s gaming law to allow for three subconcessions in addition to three original concessions, creating an extra-legal environment that allowed the Las Vegas Sands to operate as an independent subconcession holder, a method employed specifically to accommodate the Las Vegas operator and no other company, according to legal expert James Tong, a witness in the Suen case.

Today, the Las Vegas company has the largest market share of any gaming operator in the world. In 2001, Las Vegas Sands was only the fifth-largest casino operator. Adelson has also become the third-richest man in America, according to Forbes magazine, due mostly to his successful efforts in Asia.

For Campbell, Adelson’s riches may be the only obstacle that keeps his clients from winning their fight, and what keeps the public from scutinizing further Adelson’s efforts in Macau.

“It’s always a concern when someone has unlimited resources to prolong litigation,” the attorney said.

When asked Wednesday whether Adelson’s efforts on behalf of the Chinese government to influence U.S. politics would come to light in his own case, he said: “We’re not allowed to talk to you about it.”

Campbell’s case was set for trial in March. It was recently postponed to November 2008.

Macaus Biggest Slot Machine Supplier Profit Up By 20

Aristocrat Leisure Ltd., the world’s second-largest maker of slot machines, said first-half profit rose 20 percent on increased sales in Japan, Macau and Europe.

Net income increased to A$126.1 million ($102 million), or 27 cents a share, in the six months ended June 30, from A$105.3 million, or 22 cents, a year earlier, Sydney-based Aristocrat said in a statement today. Sales rose 14 percent to A$566 million.

Chief Executive Officer Paul Oneile is boosting spending on new game development to win sales in Europe and Asian markets, such as Macau, and limit the impact of slowing growth at home. He’s trying to revive sales in Japan with games such as “Kaido-oh” that comply with new regulations after a change in rules led operators to defer purchases.

“I am particularly pleased with our results in emerging markets where we have captured a significant share of new opportunities,” Oneile said in the statement. “This provides us with confidence about the company’s potential given the expansion we anticipate over the next few years.”

Net income was expected to rise to A$123.6 million, according to the median estimate of four analysts Bloomberg News surveyed by telephone and e-mail.

Aristocrat share rose 6 cents, or 0.5 percent, to A$13.39 at 10:02 a.m. in Sydney, paring this year loss to 16 percent.

Oneile expects the second-half to “remain difficult” in the company’s main markets of Australia, Japan and North America while it also battles a higher Australian dollar that lowers the value of overseas earnings brought home.

Exchange Rate

The Australian dollar was an average of 8.8 percent higher in the first half against the U.S. currency compared with the year earlier. Against the yen, it was 23 percent higher, with the Australian dollar’s gain cutting earnings by A$10.7 million.

Aristocrat shares closed yesterday at A$13.33 and have fallen 16 percent this year. The company said today it would buy back about A$100 million of stock annually during the next three to five years.

Earnings before interest and tax from North America, the company’s biggest market, rose 0.2 percent to A$123.4 million as a lack of new gambling jurisdictions curbed growth.

Japan turned to a first half profit of A$3.1 million, from a loss of A$9.6 million a year earlier, as the company began sales of four new regulation games. Machine sales in the half were 11,063, falling short of the Oneile’s 20,000 unit forecast, as the “Danceman” game failed to win over customers.

Australian earnings fell 2.7 percent to A$43 million on lower sales following the introduction of smoking bans. Pubs and clubs spent money creating outdoor smoking areas in their venues rather than buying new slot machines, Aristocrat said.

Earnings from the rest of the world, which includes Macau, Europe and South Africa, almost doubled to A$57.7 million from A$29.6 million. The company, already the biggest slot machine supplier in Macau, is increasing its market share as it supplies casinos including those operated by and Wynn Resorts Ltd.

Star Cruises Deal May Be Off

Star Cruises Ltd is reviewing the deal structure of its planned US$175 million investment in Macau following pressure from the Singapore government on the tie-up, which will in turn provide casino mogul an interest in the city state’s integrated resort.

Star Cruises said in statements to the Singapore and Hong Kong bourses yesterday that it had delayed sending out a circular with regards to the deal as it was “reviewing the structure in relation to its investment in Macau Land Investment Corporation”.

On Jan 22, the company and Genting International plc said they were venturing into the development of a US$617 million Resorts World at Macau, which includes a casino to be operated by Ho. Star Cruises is an associate company of Genting Bhd.

If the proposed venture in Macau goes through, Ho would end up with a 7% stake in Star Cruises, which has a 25% stake in the Genting group’s US$3.5 billion casino project in Singapore.

However, the Macau venture has received an adverse response from the Singapore government and its Ministry of Home Affairs said on Feb 9 said that it was seeking clarification from Genting on the deal.

Star Cruises’ Hong Kong and Singapore-listed shares fell HK$0.07 to HK$2.75 and S$0.01 to S$0.39 while Genting International fell S$0.06 to S$0.89.

Analysts were surprised of Star Cruises’ foray into the Macau gaming industry with Ho as it could even cost the Genting group its Sentosa casino project.

“Any Macau-related stock has done well, which is why they went ahead but we had anticipated that the deal with Ho may not be so smooth as the Singapore government does not want him involved.

“At the end of the day, the Singapore government has the final say and they can say if the deal is off,” said one analyst.

He said the Singapore government was against Ho’s participation due to news reports on his alleged involvement with organised crime in Macau. Ho had submitted a failed bid for a casino licence in Singapore through Melco International Development Ltd, which is controlled by his son.

Another analyst described the venture as a blunder, and has raised doubts on how Star Cruises would be able to structure the deal into a win-win situation for all parties

“They didn’t think this through. If they want to go to Macau, they can’t go with . The Macau casino is small compared to Sentosa and they need to do all they can to keep Sentosa,” he said.

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Virgin And Tabcorp Will Be A No Go

Australian Tabcorp Holdings is as they failed to reach a deal no longer talking with with Richard Branson’s Virgin Group on plans to develop a US$3 billion casino in Macau.

It is still understood that Virgin is still talking to other potential partners on plans to build and run a casino and resort development in Macau.

Another source said Virgin was still talking to a number of other potential partners on the development in Macau, which is already home to a large gambling industry.

Macau Gaming Bureau Forecasts 35 Casinos In 2010

Manuel Neves, director of the Gaming Inspection and Coordination Bureau (DICJ), predicts that the local gaming and betting sector’s annual gross receipts will “very probably” reach 100 billion patacas at the end of the decade, when he expects the number of casinos to reach 34 or 35. Mr. Neves made the forecast in an interview with the latest edition of the Portuguese-language Revista , a quarterly magazine published by Delta Edicoes on behalf of the Government Information Bureau (GCS).

According to the DICJ, the gaming and betting sector’s gross receipts reached a record HK$ 55.88 billion at the end of last year (the DICJ uses a Hong Kong dollar/pataca exchange rate of 1:1 in spite of the fact that the official peg rate stands at 1:1.03). The number of casinos now amounts to 26.

Mr. Neves also said he expected this year’s gaming and betting sector to log 77 billion patacas in gross receipts this year. This would amount to a year-on-year growth of 37.7 per cent per cent. He also said he believed the number of gaming workers would increase from the present 35,000 to between 60,000 and 80,000 “in the medium term.”

Macau’s top gaming inspector also said the government would not grant more casino subconcessions. Currently, the three casino concessionaires have been allowed by the government to grant one subconcession each.

“I believe that will, in fact, be the Las Vegas of the Orient,” Mr. Neves told the magazine, adding he did not believe that new casino developments elsewhere in Asia, such as in Singapore, would jeopardize ’s leading position in the region “in the short or medium term.”

Mr. Neves also said that the present situation of gambling-related problems in was “not worrying.” However, he added that this did not mean that problems could arise in the future, because of which the government was taking “preventive measures to minimize this possibility.”

The bureau director also said the government would soon draft “clear rules” on the prohibition of minors’ entry into casinos. While anyone under the age of 18 is currently banned from entering gaming premises, current legislation apparently gives minors the right to claims their winnings even if they illegally gained entry into a casino. Neves claimed that casinos “are not the best place to launder money, contrary to what many people think. In casinos everything is registered and, consequently, it’s easier to detect illegal operations.”

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Stanley Hos Daughter Josie Ho Is No Princess

Hong Kong actress Josie Ho is no princess. No wonder she’s No. 8 on a Forbes list of 20 most intriguing billionaire heiresses. She is the only Chinese woman on the list comprising mostly Americans.

Don’t get the idea she is a boring princess. In fact, she calls herself the “little black sheep” of her family. She is a rebel with an ultra-rich dad and an indie music rocker who revels in playing prostitute roles.

Ho has appeared in such award-winning films as Butterfly, Purple Storm and Twin Effects. Her most recent film, Exiled, which had Canadian/Hong Kong director Johnny To at the helm, is the Hong Kong submission for the Oscar race this year for best foreign film. A rock star, she is preparing to release her latest album in China next year.

Her proud dad, tycoon , has an estimated worth of $7 billion US. He admits Josie’s chosen path hasn’t always been easy for him, but he says she is trying her best and hopes she will succeed.

As for Josie, she was quoted recently in the Chinese media as saying, “Having a rich father didn’t give me benefits . . . Everyone assumes I’m just doing it for fun. No one believes I’m serious.”

Josie just lo-o-o-ves playing prostitutes. “I think it’s really controversial compared to my own background. It just makes me learn so much about a different class of people and what they do. It’s just a totally different realm,” explained the 33-year-old.

By the way, Ooi makes a point of saying that only truly deserving heiresses who have achieved in business, sports or the arts make the list. In other words, no Paris Hiltons here.