Inside Asian Gaming

September 2012 | INSIDE ASIAN GAMING 11 Asian Gaming 50 – 2012 Wynn Macau managed to grow rolling chip volume 3% through a difficult first half to rank fourth in the market (as of 30th June) in average daily volume per table. Only City of Dreams exceeded it in main-floor win per table among properties with comparable numbers of tables. And in both categories Wynn Macau exceeded the citywide averages. Average daily win of US$795 per slot machine was the highest in the market by far, twice the average on Cotai. Add it all up and it explains why Wynn Macau trades at the second-highest EV/ EBITDA multiple in town (after Sands China), and only Sands, with earnings from four properties, enjoys a higher market capitalization. What Mr Wynn will achieve on his 51 acres on Cotai remains to be seen, of course. But he’ll have a lot more space to work with, twice as many hotel rooms, plus an entertainment arena, and his will be the closest property to the airport and the new Taipa ferry terminal. The rail line from Guangzhou will pass right in front, where there will be a lake and an even more elaborate water show and air-conditioned gondolas waiting to carry visitors on a tour of the place from above. A legacy in the making? So it sounds. 6 Ambrose So Executive Director and CEO SJMHoldings Since Stanley Ho’s retirement from SJM Holdings, the listed parent of the casino empire he founded, it’s been Ambrose So, the great man’s successor as chief executive, who has exercised operational command of Macau’s most prolific money-making machine, a responsibility he has fulfilled with quiet effectiveness. Though expansion at the burgeoning Cotai resort district has chipped away at SJM’s historical dominance of the market, total results for the group last year— consisting of four self-promoted casinos, three machine gaming venues and 14 third-party-promoted “satellite” casinos— included a 42.5% increase in adjusted EBITDA to HK6.92 billion (US$887.6 million) on a 32% rise in gaming revenue to HK$75.51 billion (US$9.68 billion). VIP trade, long the company’s strong suit, accounted for an even larger share of the business than it had in 2010. The company’s flagship, the Grand Lisboa, delivered a 57.7% increase in rolling chip volume and HK$5.6 billion more in VIP revenue than in 2010. And the mass market was superbly managed. Table revenue on the main floor was up 39%, and slots were up 23.5%, contributing to a solid 16.5% operating margin. The other self-promoted casinos, Casino Oceanus, Casino Jai Alai and the venerable Casino Lisboa, were similarly strong in high-margin mass play, delivering 10 cents of every dollar of combined revenue to the EBITDA line, which was up year on year almost 40%. Under Dr So’s leadership, the company has continued that strong performance into this year. SJM concluded the first half with a 27% share of the market’s total gaming revenues, down from 2011’s 29%, but Grand Lisboa outperformed the market as a whole, growing gaming revenue 22% on continued strong gains in table revenues, particularly on the VIP side. There will be no lack of challenges for the CEO in the months ahead, with growth expected to slow throughout the market and the operating environment certain to become even more competitive. But by virtue of the association he has enjoyed with Stanley Ho, which stretches back decades, the 61-year-old draws from a unique and very deep well of experience. He joined the tycoon’s casino monopoly in 1976, three years out of the University of Hong Kong, and served as an executive director of Dr Ho’s Shun Tak conglomerate for 18 years. He has been a director and senior manager at Sociedade de Jogos de Macau, SJM Holdings’ casino operating arm, since its inception when the monopoly expired in 2002. In 2006, he was named a director of SJM Holdings and would be instrumental in guiding it to a successful listing in Hong Kong. And as its second-largest individual shareholder and the chairman of its Executive, Nominating and Remuneration committees, no one exerts a greater influence on its strategic direction—and there is perhaps no one whose outside connections are more extensive. Dr So is a director of Stanley Ho’s Estoril Sol, the listedholding company for Portugal’s largest portfolio of casinos (which includes Europe’s largest, Casino Estoril). Regionally, his interests extend to companies engaged in consumer electronics and finance. He also sits on the boards of two SJM-affiliated construction and real estate investment companies. And like his former boss, he moves in the highest circles of the government of the SAR, serving as chairman of the city’s port authority and a member of the Economic Development Council, and providing Macau with a respected voice among the powers that be in Beijing. He is a member of the National Committee of the Chinese People’s Political Consultative Committee and serves as a consultant with the Beijing Municipal Committee of the CPCC on its relations with Macau, Hong Kong, Taiwan and the greater Chinese diaspora. Interestingly enough, none of this has guaranteed SJM a front-row seat on the unfolding spectacle on Cotai. Instead, as four of the five competing concessionaires move forward with land approvals for the next round of resort projects there, SJM’s vantage has been limited to the gallery. That may have been by choice. The company says it is in “advanced” discussions with the government on its application for a 70,400-square-meter site in the district, and it entered the second half of the year with US$2.74 billion in cash and bank deposits and one of the cleanest balance sheets in the business. What is certain is that no operator knows the Chinesemindset and thementality of the Chinese gambler better than SJM, and Dr So has been diligent about biding his time and ensuring his company is in a strong position to exploit the opportunities whenever and wherever they arise.