Inside Asian Gaming

INSIDE ASIAN GAMING | August 2010 14 the rationale behind Genting’s positioning if its reported commission levels on VIP play in Singapore are correct. He did, though, allude to some of the industry speculation on the motive. “There is a lot of rationale that everybody is throwing around as to why they [RWS] are giving out at least 20 bps higher than we are giving on any one customer category. So, the biggest spread is on the last $10 million and over category,” said Mr Adelson. But he added that such commission levels were usually more characteristic of middlemen being involved. “My inclination is to say that if [RWS’s] Japan [high rollers are rebated] 1.4 to 1.5, it’s certainly an indication they may have to be working with some sort of intermediary.” Inside Asian Gaming would like to point out there is no suggestion that RWS is breaking Singapore’s rules on junkets by working with unauthorised agents. It’s theoretically possible for VIPs to solicit a rebate equivalent to 1.4% of rolling chip turnover from the casino and then share some of that with a third party that is providing themwith travel to Singapore and accommodation while in the city. VIPs are by definition people used to making deals on their own behalf. Michael Leven, President and Chief Operating Officer of LVS, said during the LVS earnings call that the top commission rate MBS was likely to pay its direct high rollers was 1.3%. “I think 1.2% is about where it’s going to be,” stated Mr Leven. “I haven’t seen any indication that it’s going to go more than that, unless really big players that get some extra lift get in there. I would say 1.2% to 1.3%, something like that. Its where it is going to be.” An assumption behind the debate on the level of rolling chip commission shared with players in Macau versus Singapore is that high rollers would be sufficiently motivated by a differential of as high as 60 basis points (if reports of RWS’s 1.5% rebates are true) to try their luck in Singapore rather than Macau. A source familiar with the VIP trade across the Asia Pacific region says that might not necessarily be a deciding factor. It may be a case of ‘the more venues the merrier’ from the players’ perspective. The Macau VIP split Theoretical house win 2.75% 2.85% 3.00% Total amount bet by player (roll) $100,000 $100,000 $100,000 Gross amount won by casino $2,750 $2,850 $3,000 Macau govt tax @ 40% $1,100 $1,140 $1,200 Commission paid to Macau junket $1,250 $1, 250 $1,250 (maximum 1.25% of roll) Macau casino net win (after tax $400 $460 $550 and commissions) In Focus Marina Bays Sands—may go as high as 1.3%