Vegas Gang #35 Posted
* Harrah's 'Street O' Shops'
* Monte Carlo Hotel 32
* Financial Reporting
* Random Banter
Feel free to leave comments below.
Categories: Business of Gaming, Podcasts, Vegas Gang Podcast
Tags: lasvegas, ratevegas, vegas, vegasgang, vegasgangpodcast
Here's my crackpot theory about the Hotel32 rates: MGMM doesn't want anyone to stay there, yet. They have it in place to put some of their high rollers there when they won't open various parts of CityCenter on time. A small percentage of their Whales will be placated , which will help smooth out some bumps in the road. I think rates will fall much more in line with comparable properties after the CC opening is completed. Since Monte Carlo is seen as an overflow hotel, maybe Hotel32 is seen as overflow for Whales?
The rates at Hotel32 are inflated because of all of the added "perks", probably the most expensive of which is the free airport limo transportation. So if you're staying one night it might be worth it for the standard room (although it's only about 400 sq ft), so that might not even be worth $250. And in the end, you're still at Monte Carlo...
I can't speak directly to hotel room rates, but new retail space often gets financing predicated on getting a certain rent per square foot. To get around it, the leasing agent may give so many months free so that the renters average rent is lower than the quoted monthly rate. That way they can tell the source of the financing that they are getting the target rate while omitting the fact that they gave away free months.
Question for the gang:
What rate are the casinos being taxed in Macao? Where is the money going? I'm guessing it's going to the Macao SAR because I saw a story on a foreign news channel once about the quality of life in Macao and the hopes that gambling would improve it, but just wondering.
mike-ch: The gaming taxes paid by Macau casino concessions and subconcessions are:
1. 35 percent of gross gaming revenue (the money won from gamblers) to Macau SAR's general fund
2. Up to 3 percent (but now set at 2.4 percent) of gross gaming revenue to tourism promotion
3. Up to 2 percent (but now set at 1.6 percent) of gross gaming revenue to the Macao Foundation, which promotes cultural, educational and philanthropic acticities in the SAR
There also are annual fees that each concession and subconcession pay. Each concession and subconcession pays an annual 30 million Macau pataca (MOP) premium for the right to offer casino gaaming. (1 pataca = about 12.52 cents; 1 dollar = just a shade less than 8 patacas).
Annual fees are also paid for every table game and slot, with VIP tables costing MOP 300,000; regular tables MOP 150,000 and slots MOP 1,000.
The taxes definitely have boosted the fiscal health and the infrastructure of Macau. Stanley Ho has called for the tax rates to be lowered to make the enclave's casino market more competitive on a worldwide basis, but it would be a politically unpopular move and probably isn't likely in the near term.
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