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 he Good Gambler |
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TheEditor on any
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.... 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)
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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!
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