MGM China Report Increase in Mass Gaming ASIA & OCEANIA
MGM China generated total revenue in 2016 of HK$14.9bn, down from HK$17.2bn in 2015 although it did manage to improve its operation efficiency and margins, while remodelling efforts aim to halt any further declines in the future
Cost savings and a shift in VIP/mass market emphasis helped to soften the blow, but MGM China’s results were still sharply down in 2016
MACAU CASINO OPERATIONS
PHILIPPINES – Japan-based credit analyst Nomura is expecting good things from City of Dreams Manila when it reports its fourth quarter results for 2016 due to resilient junket and VIP demand.
Nomura Analysts Harry Curtis, Daniel Adam and Brian Dobson all predicted that the overall demand in the Manila gaming market ‘may continue to increase more than the supply growth.’
They said: “Despite political pressure on Chinese nationals and increased violence related to the Philippine government’s crackdown on drug traffickers, we estimate market revenues grew in excess of 40 percent in fourth quarter 2016.
“Our latest channel checks suggest fourth quarter property EBITDA [earnings before interest, taxation, depreciation and amortisation] at City of Dreams Manila could be at least US$10m above the Street’s US$32m estimate. The positive surprise has been strength in VIP/junket, where we estimate Melco Crown grew revenues more than three times year- on-year, albeit off a relatively small VIP base (VIP GGR was US$27.3m in fourth quarter 2015).”
MACAU– The opening of the Parisian in Macau has helped boost Sands China’s mass gaming segment by 16 per cent, giving the company its strongest growth in the segment since the second quarter of 2014. However a mystery female gambler dented that growth after a huge winning streak in the casino, so much so that she was even mentioned in the Las Vegas giant’s earnings call.
Rob Goldstein, President of Las Vegas Sands, the parent company of Sands China, said: “She wins every day. She is doing very well and affected the numbers.” Sources say the women has won millions of US dollars since the Parisian opened in September and that the other five major casino operations in Macau – namely Wynn, SJM, Melco, MGM China and Galaxy have informed staff to look out for her.
The biggest fear is that as the player’s status grows other gamblers may follow her at mass market gaming tables and mirror her bets. Overall the Parisian Macao generated adjusted property EBITDA of $95m during its first full quarter of operation.
Sheldon Adelson, Chairman and CEO, said: “We are pleased The Parisian Macao, our latest Integrated Resort delivered $95m in adjusted property EBITDA during its first full quarter of operation and quickly established itself as another ‘must see’ destination for visitors to the Cotai Strip.
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MGM China’s latest results have mirrored the wider Macau market with mass gaming up slightly whilst VIP gaming suffered a big downturn. While total gaming revenue in Macau declined by three per cent from previous year, the mass gaming revenue grew by an estimated six per cent year on year, but still grew less that the increase in market supply.
For the year, the group recorded main floor table games win of HK$7.7bn, an increase of two per cent from a year ago, despite disruption from the renovation of food and beverage outlets and remodeling of gaming floor at MGM MACAU during the quarter. VIP table win was down 26 per cent year on year. MGM Macau occupancy rate was 95.4 per cent for the year. Te group believes the property remains a popular and premium destination for high quality customers and while gaming occupancy has reduced, the casino has been successful in attracting new non-gaming customers.
Grant Bowie, CEO and Executive Director of MGM China said: “To maintain its competitiveness, we have been undergoing a
PAGCOR reveals 17 per cent gaming industry increase
Philippines
Te Philippine Amusement and Gaming Corp. (PAGCOR) has reported a 17 per cent rise in gaming revenues with the gaming sector generating P55bn in the third quarter of 2016, marking an increase of P8bn from last year.
Te increase came amid a huge crackdown on online gaming in the country and as PAGCOR began the privatisation of its slice of the casino industry.
PAGCOR’s data showed that for July to September in 2016, casino revenue reached P39.774bn, marking an 11.3 per cent up from P35.727bn for the third quarter last year. For the first nine months of 2016, total casino GGR increased by 19.8 per cent to PHP99.77bn.
remodeling of main floor at MGM Macau including creating additional retail space and upgrading our food and beverage offerings. Two new dining outlets at MGM Macau were launched earlier in 2017. Te new restaurants provide authentic and diversified casual dining experience to our local and Chinese customer base. We also opened a new gaming area on the main floor to extend our offerings for our premium mass customers.
“Te group is working at full speed to prepare for the opening of MGM Cotai in the second half this year,” continued Mr. Bowie. “Te majority of all building enclosure works for the tower and the podium have completed including exterior signage on the towers and the erection of the MGM Lion at the north end of the property. Principal efforts across both the podium and the hotel towers continue to be building systems testing and commissioning in parallel with fit- out activities related interior finishes. With almost twice the square footage of MGM Macau, our new MGM Cotai property will allow us to capitalise on our expertise in providing exciting and diversified entertainment offerings.”
Japan
PAGCOR Chair Andrea Domingo said: “Tis year looks like a good year for us because the Asian market has stabilised. Not only were we able to maintain our revenues, but we were actually able to improve it. And these revenues will increase further when Okada Manila opens formally in February.”
PAGCOR’s own results were boosted further when the Supreme Court reversed a decision by the Bureau of Internal Revenue meaning it couldn’t collect income taxe from the PAGCOR or its licensees. She explained though that even without this ‘extraordinary income’ Pagcor would have improved its revenues in 2016 by P4.5bn.
She said this had been achieved by capping operating expenses at 25 per cent of revenue and limiting marketing expenses to five per cent.
Osaka has presented Yumeshima, a man-made island in Osaka Bay, as a potential home for an integrated casino resort. Business leaders in the city are hoping that it could be operational in time to seal the city’s status as host for the World Exposition in 2025, for which Osaka is facing competition from Manchester and Paris. Te winner will be decided in November 2018. Osaka city presented the ¥824bn casino plan for the island detailing how a 70- hectare slice of the island would be transformed into an integrated casino with hotels, retail, leisure and convention facilities. Osaka Mayor Hirofumi Yoshimura believes the new casino legislation will be approved by the end of this year and that an international casino operator will want to develop on Yumeshima. He wants the selected operator to pay ¥70bn to build a city subway line out to Yumeshima.
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