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16/03/2004 No.28
he Good Gambler
The Editor or one of our professional correspondants make regular contributions to coverage of the gambling world.
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Buy The Rumour

.... and sell the fact!

What is going on in our world? Well a lot and nothing.

That old gambling bill rumbles on and on. The government is still playing around with it because as a political issue they are not sure what value it has. And that is why outside parties are getting the wrong message. Whilst the major casino players in the UK continue to have flat or poor results, American interests are still buying into the myth of a big expansion in UK gaming.

Over the last nine months, the major UK casino players that are quoted have seen a steady rise in buying pressure and hence rise in share price. After the fall I suggested in a previous letter, Stanley (SLY.L) have moved from 250p per share to 459p. Rank (RNK.L) which is Grosvenor casinos, has gained near 100 from 230p to 315p. Hilton (HG.L), or Ladbrokes casinos, 140 to 219 and UKBetting (UKB.L) has gone from 25p to 70p. Wow what a sector move. (Note: Any terrorism scare will knock these as part of the leisure industry)

It all seems a win-win play of expansion growth and profit. However, if I had shares in these companies, I would ride the wave of optimism until just before the time of the final draft Bill. The market rule is "Buy the rumour, sell the fact", and it has never looked more right than this.

Just as an example of the misplaced faith in the UK market we have seen MGM Mirage back out of its Isle of Man based online casino in favour of its purchase of Wembley Group. This is a gaming operator which owns five dog tracks including Perry Barr and the Wimbledon Stadium. It cost MGM £270m. Let them keep coming, next they might even buy London Bridge. Oh they already did. (Subnote: This deal is still to be finalised as is under pressure from Sol Kerzner, of Sun City fame, who has being buying up the shares)
Over in France they have picked up the buying fevour with Accor Casinos purchasing the Barriere Desseigne family casino business. They now own 37 casinos in France out of a total of 140. Accor is a big player may hold the key to casino purchasing in the UK. It is the largest hotel chain in Europe with 75 hotels in the UK already, also owning the top range Sofitel brand. They look like being the dark horse that will finish ahead of the Americans once they (the Americans) discover what low level of interest there is for casino play in the UK.

Back to everyday gambling and its nice to see some brighter things in UK casino market. Some sense has finally been shoved into the head of the Stanley Casino group. Card rooms and restaurants, that previously brought all their customers in, have been opened again in many of their establishments. This is creating more competition. As an example, in the City of Southampton the Stanley Casino is adding money to its thrice weekly Hold'em tournaments. More than this, a new private casino has opened and it too promises a card room. There may actually be 3 in Southampton very soon!