US-linked Macau operations to curb demand

U.S.-linked operators in the Macau casino market are benefiting from "hold demand" following the end of COVID-19-related restrictions in mainland China, Macau and Hong Kong, JPMorgan Securities said, citing comments from U.S. executives.

Opinions on the Macau market were provided by Daniel Briggs, senior vice president of Las Vegas Sands Corp, parent company of Sands China Ltd and public relations officer of Marina Bay Sands Casino Resort in Singapore.

It also mentioned Julie Cameron Doe, Chief Financial Officer of Win Macao Inc WIN Resorts, Corey Sanders, Chief Operating Officer, and Sarah Rogers, Senior Vice President of Corporate Finance at MGM Resorts International, parent company of MGM China Holdings Inc.

The event was the JP Morgan Games, Accommodation, Restaurant and Leisure Management Access Forum in the United States this week. 파친코

For Las Vegas Sands, which operates resorts linked to four Kotai game venues and runs properties on the city's peninsula, it is the "first leg" of Macau's market recovery "from the best value, wealthiest Chinese consumer" that has supported premium bulk returns," JP Morgan analysts Joe Greff, Omer Sander and Ryan Lambert announced a note update for the event.

Las Vegas Sands also said the group is expected to reach or reach 2019 earnings levels before interest, taxation, depreciation and amortization (EBITDA), as it describes Macau as a growth in premium mass and VIP's "incremental" business directly managed by operators, not legacy junk.

"What's important is that this should have a fairly high EBITDA margin, given that Juncket VIP was a business with a 10%-15% margin when considering a mixed transition," the JPMorgan team quoted Las Vegas Sands management as saying.

The premium segment of Singapore's business also led to a recovery, with Las Vegas Sands taking the view that "there is still a bridge" as Chinese visitor numbers continue to improve in the city-state and airline capacity improves.

"China accounted for a third of Marina Bay Sands' revenue in 2019," JPMorgan said in a summary of its management comments, adding that "local businesses have helped move population to Singapore over the past few years, and are bigger than ever, leading to very strong results in terms of slots."

In a separate note, JPMorgan noted that Win Macau's market share was recently about 15% of all local game sales, "improving above 2019 levels without the need for a junket business."

The management thought that the increase in the property market share of the new Win Palace in the Win Macau and Kotai areas of the city's peninsula was driven by "providing premium rooms."

"Both properties are operating in a more coordinated way rather than an isolated approach than before COVID," JPMorgan said, citing Win Group that Macau's leadership composition had recently been restructured.

JPMorgan also noted that Win Macau recently hired its chief marketing officer. This will help facilitate programming and visits across two properties.

The agency added that it believes Win Group has the right opportunity to convert Macau's Juncket VIP player directly into a customer.

"We believe market share will be sustainable in the mid-teens," said MGM China Macau management, which runs MGM Macau and MGM Kotai, adding that expansion, post-split renewal and marketing programs in the [Game] table help keep market share above pre and fashion levels.