North Korea offers a rare chance to invest in its tallest structure, the Ryugyong Hotel in Pyongyang. The government will give a casino operation license to any company that finishes the hotel’s long-delayed inside construction. 

From ‘Hotel of Doom’ to Casino Boom

The Ryugyong Hotel, a 105-floor skyscraper, has been under construction since 1987. People expected it to open in 1992, but the Soviet Union’s fall stopped the project cutting off key financial help. The economic crisis and famine that followed pushed back its completion even more. While workers finished the building’s outside in 2011, the inside is still unfinished leaving the structure empty for decades.

Not long ago, Kim Jong Un told his people to look into how much money a casino in the Ryugyong Hotel could make, as reported by Radio Free Asia. He got this idea from how well the casino for foreigners at Pyongyang’s Yanggakdo Hotel was doing.

The government’s plan includes granting the rights to determine the casino’s location and operate it to a foreign entrepreneur willing to fund the interior construction. This plan aims to bring in money and know-how from other countries. The government thinks this is key to giving new life to tourism in North Korea.

The Ryugyong Hotel nicknamed the “Hotel of Doom” because of its long and troubled past, represents North Korea’s dreams and failures. The building’s LED front put up in 2018 now acts as a huge propaganda screen lighting up Pyongyang’s skyline with political messages and pictures. Still, the government anticipates that eventually, the hotel will work as a full-on luxury resort, with rooms, places to eat, a pool, and a place to play billiards.

Despite Past Failures, North Korea Revives Effort to Turn Ryugyong Hotel into Tourist Hub

This new casino plan comes after earlier attempts to get foreign companies involved in North Korea’s hotel business. In 2012, the German hotel group Kempinski said they would run the Ryugyong Hotel but backed out after North Korea’s nuclear tests and growing world tensions. Even with these problems, North Korea’s government still wants to turn the Ryugyong Hotel into a big tourist spot.

Currently, North Korea has two operational casinos. One is located at the Yanggakdo International Hotel in Pyongyang and another at the Bipa Hotel in the Rason Special Economic Zone, near the borders with China and Russia. These casinos cater exclusively to foreign visitors, generating significant revenue from international tourists.

The Chinese government is hosting a trade show in Dandong China where North Korea plans to showcase its Ryugyong Hotel casino project. This effort aims to draw potential investors from nearby nations.

This push highlights North Korea’s pressing need to attract money from abroad to boost its tourism sector and overall economy. In other news, South Korea’s National Intelligence Service (NIS) alleges that North Korea developed illegal gambling websites for a South Korean criminal organization, generating billions in profits and stealing personal data.

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Bond investors from Asia and beyond are taking the risk and doubling down on investments in Macau casino debt. This move carries certain uncertainties but has the potential to be more lucrative than investments in corporate debt. At the moment, investing in Macau casino debt might be less risky than investing in shares too.

The debt issued by Macau’s gambling and entertainment companies is now even more tempting to investors amid the recovering gross gaming revenue. The special administrative region had struggled with the pandemic and China’s Zero-COVID policy for a while but is finally showing signs of recovery.

The rebounding gross gaming revenues have attracted the attention of a number of investors and consultancies who believe that the region’s future is bright.

Bonds May Be Securer Than Shares

In addition, the share prices of Macau’s six concessionaires are yet to rebound to pre-pandemic levels. In fact, most companies’ stock continues to fluctuate or even decline. While some experts believe that the Macau stocks deserve better, considering their strong recovery, investing in shares at the moment seems risky. Amid the stock-related uncertainties, investing in bonds seems to be somewhat safer for investors.

Furthermore, the trust in Macau casino bonds has led to Sands China’s bonds getting lifted to investment grade by S&P. Melco, on the other hand, just had its credit rating upgraded to stable, further confirming that investing in bonds might be the way to go.

Many investors may also be interested in a number of other boons provided by the Macau casino operator bond, including Asia’s low default rates and the departure of many Chinese firms from the bond market, which has decreased the overall supply.

In other news, five concessionaires that previously sought compensation from Suncity Group and Alvin Chau have now dropped their claims. This decision followed Chau’s imprisonment in October when the Court of Second Instance in Macau handed the junket mogul an 18-year sentence.

For reference, Chau and his junket were involved in a number of illicit activities, including fraud, criminal association, money laundering and illegal gaming.

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Leading betting and gaming group 888 Holdings has issued a cautionary statement to its investors, indicating that its Q3 performance may fail to reach initial expectations. The London Stock Exchange (LSE)-listed company remained optimistic that this downturn would remain temporary, expecting a swift recovery in 2024. This announcement closely mirrors that of Entain, signaling a potential industry-wide slump.

Negative Factors Compounded To Hinder Growth

The expected 10% Q3 drop should place 888’s quarterly revenue at roughly £400 million ($487.61 million). These results may indicate an unfortunate trend for the company as last year saw another 7% slump compared to 2021’s revenue of £484 million ($590.31 million). 888 attributes this negative trend to several factors, noting that the company remains positioned to overcome these challenges and emerge stronger than before.

Sustainability initiatives form one of the primary factors behind the projected revenue decrease. While this reflects the company’s commitment to responsible gaming, it impacted profits. Enhanced compliance measures in the UK similarly affected revenues in one of the operator’s primary markets. 888 cited ‘customer friendly sports results’ as another negative factor across all jurisdictions.

Compliance challenges are a running theme in the report, as the operator admitted that regulatory changes in dotcom markets resulted in the slower-than-expected recovery in customer activity and revenue. Furthermore, a shift in 888’s marketing strategy focusing on ‘higher return marketing’ resulted in temporary disruptions as the company adjusted to its new brand-led strategy.

The Company Maintains Its Leadership Position

Despite the Q3 revenue setback, 888 Holdings maintains a positive outlook. It expects improvements in the remainder of the year, with Q4 revenue projected to be sequentially higher than Q3, although still lower year-over-year by a mid-single-digit. 888 Executive Chair Lord Mendelsohn noted that the operator was making significant strides to improve long-term sustainability, lauding the team’s efforts.

We are strongly focused on investing to deliver good levels of expected revenue growth in 2024 as we progress towards our clear target of more than £2bn of revenue in 2025.

Lord Mendelsohn, 888 Executive Chair

888’s troubles closely mirror those of Entain, one of its primary competitors. The global gaming company cited slower growth in strategic regions and UK regulatory headwinds as the primary reasons behind the drop in projected revenue. These shared challenges could reveal insights regarding the wider gambling industry as many regulators reaffirm their focus on player protection, forcing operators to adapt.

888 is currently undergoing a leadership transition as Per Widerström prepares to assume the position of CEO. This change in leadership is part of the company’s broader strategy, which includes repaying loans related to the £2.2 billion acquisition of William Hill, achieving higher profit margins, and maintaining a net debt of less than 3.5x.

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Problem gambling can lead to dire consequences for the people affected, including their families. People that have a difficult time controlling their gambling habit can get into debt or in some severe cases resort to crimes or even take their own life. In Australia, gambling is widely spread. So much, in fact, that hundreds of millions are lost to gambling on a monthly basis, resulting in billions of losses annually.

As gambling doesn’t mix well with alcohol, the same goes for people that manage funds and may suffer from problem gambling. Now, a new report released by ABC reveals that a former financial advisor from Perth, accused of stealing more than AU$1 million ($678,500) from clients, is on trial. The man, who allegedly stole money from investors, spent it on online gambling.

The 41-year-old, Mark Raymond Sebo, represents himself in court and denied the allegations. Previously, the financial advisor pleaded not guilty to 36 charges of stealing money from eight different clients. Allegations against Sebo claimed that he stole more than AU$1 million ($678,500) over 10 days. The alleged incident occurred between July and August 2019.

Allegations Claim the Investors’ Money Was Spent on Gambling

The prosecution against Sebo at the WA’s District Court claimed that Sebo was approached by some of his clients, who questioned the transactions they saw on their accounts. However, allegedly the financial advisor told them to file a complaint with the Australian Securities and Investments Commission (ASIC), the country’s independent government body in charge of regulating financial services, authorized financial markets and consumer credits, among other financial matters.

The prosecution claimed that in one text message, Sebo wrote: “This is my error … I can no longer fix it for anyone as my accounts have been frozen.” Then, allegedly the financial advisor wrote: “The best you can do at the moment is make a complaint to ASIC.”

So far, no money has been recovered, while Paul Usher, the state prosecutor, alleged that Sebo’s actions violated an agreement with his clients. The financial advisor was in charge of funds belonging to his clients, but he was not given permission to transfer those funds to his business and personal accounts, claimed Usher.

Additionally, the state prosecutor said that evidence would show that the financial advisor spent the money he has taken from his clients’ accounts on gambling via three different online operators. While the trial continues it is yet to be determined whether Sebo will face any penalty and if so, what it might be.

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Business News Australia reported that the Sheraton Grand Mirage Resort, a property owned by The Star Entertainment Group, has been put up for sale, with an asking price of around AUD200 million ($132.7 million). The move is seen as a cash grab by The Star, which bought the resort in 2017 for AUD140 million ($92.9 million). 

Gold Coast’s Resurgent Hotel Sector Sparks Interest Among Investors

The Star has appointed Colliers, McVay Real Estate and JLL to manage the expressions of interest campaign, which aims to capitalize on the Gold Coast’s resurgent hotel sector. This sector has been driven by the opening of The Langham, Gold Coast earlier this year. The Colliers team has fielded numerous inquiries, with most of the initial interest coming from domestic parties.

According to McVay Real Estate chairman Dan McVay, who first sold the property to developer Chris Skase’s Qintex group in 1991, the Gold Coast hotel market is currently experiencing high demand and low supply. The market is being supported by a resurgent domestic tourism industry, while international investor interest is also being driven by Australia’s emerging safe-haven status for capital.

Singaporean and Hong Kong investors have reported that they are looking at Australia for investment opportunities due to the ongoing war in Ukraine, with the two countries averse to investing in Europe, China, and America. McVay notes that the surge in room rates and occupancy levels have made hotels a highly attractive investment opportunity.

Investors Eyeing Unique Opportunity with Sheraton Grand Mirage

The Sheraton Grand Mirage is a luxurious hotel situated on a 3.45-hectare site at Main Beach with 300 meters of absolute beachfront. With 295 rooms, the hotel has gained immense popularity among Australian tourists. While room rates have generally been steady, they have increased significantly in the past two years. Despite the price surge, visitors are still willing to pay for the hotel’s upscale amenities and breathtaking location. 

Colliers boss Steven King says that the strong interest in the property is not unexpected, and many investors will run the ruler over it. The hotel is a unique property that does not often come up. King adds that hotels are achieving high occupancy rates and high nightly rates, making the market attractive to investors.

The Star, along with its Hong Kong-based partners Chow Tai Fook Enterprises and Far East Consortium, acquired the Sheraton Grand Mirage in 2017. The acquisition of the hotel was a response to competitive pressure from the Chinese-backed ASF Consortium, whose plans for a casino resort were canceled by the Queensland Government in 2017. Despite previous upgrades, industry sources suggest the property requires further investment.

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