Inside Asian Gaming

INSIDE ASIAN GAMING | August 2010 12 A sian casino gaming is growing both in terms of jurisdictional coverage and gross revenues. In the Macau market alone, revenue surged by 67.5% year on year in the seven months to July to 102.2 billion patacas (US$12.8 billion). Most of that was driven by VIP baccarat. There are, however, strong economic incentives for at least some of those VIPs currently visiting Macau (not the ones from mainland China) to go solo and try their luck as direct players in Singapore. The sweet spot in terms of the Singapore integrated resorts attracting such players may be a matter of 20 to 30 basis points [bps] on a percentage of VIP player roll. That figure is the difference between the rolling chip commission that most Macau junkets can afford to rebate to their players (0.9% to 1% in commission out of the maximum 1.25% commission paid to them by the casinos), versus the rolling chip commission that Las Vegas Sands Corp, in its second quarter earnings call, said it can rebate to its direct VIP players at Marina Bay Sands (MBS) in Singapore (1.2%). If LVS is going to convert a junket player to a direct one, it would rather do so in Singapore, because, according to Sheldon Adelson, the company’s Chairman and Chief Executive, the price Macau high rollers are demanding from his casinos for their direct business is pushing the direct play route into being less profitable than many previously assumed. Singapore’s lower taxes will also leave more wiggle Direct Play LVS has clear incentives for shifting its non-junket VIPs to Singapore