A few readers have castigated us since yesterday for failing to lump Melco-Crown in with Sands China, Wynn Macau and MGM China (coming soon) as casino operators who might come under tighter regulatory scrutiny from the US. We’re sorry. You are absolutely right: with its ARDs listed in New York, MPEL is every bit as exposed to investigations of Macau casinos by US regulators. It might not have assets worth protecting in the US, like the others have, and therefore can cross the Nevada Gaming Control Board off its Christmas-card list, but it does have to worry about the SEC, DOJ and any other federal agencies poking their nose into how casino operators here run their business.
That said, we have to offer forth some advice here in the spirit of patriotism to Lawrence Ho, CEO and co-owner of MPEL, given the current political circumstances in which Macau finds itself after both the NPC and the US State Department’s report calling Macau a major money-laundering center. Which camp would you rather be in, Lawrence? Using the fingers of one hand, we calculate you would need around US$3bn of cash to buy out your partner, James Packer, who adds very little value to the company anyway. Your ADRs are barely traded by serious institutions in the US. So where is the downside of nationalizing, er, privatizing this company? If you would like to have lunch now that the NPC is over, you know where to find us.
Used with permission & copyright IntelMacau