Inside Asian Gaming

April 2013 | INSIDE ASIAN GAMING 15 IN FOCUS 2012 to the first quarter of this year, with much of the difference attributable to luck, particularly in the VIP segment. Notably, MGM China’s VIP win rate of 2.97% in Q1 2013 lagged the market average of 3.28%, and particularly the rates of 3.56% and 3.55% experienced by Sands China and Wynn Macau, respectively, in the first quarter. SJM’s VIP win rate stood at 3.16% in Q1, while Galaxy’s was 3.38%. Melco Crown had a 3.31% rate at City of Dreams and a 3.04% rate at Altira. Discounting the luck factor by considering VIP rolling chip turnover by operator, the relative shares of the operators were generally stable between Q4 2012 and Q1 2013. The most apparent trends since the beginning of last year are the steady increases in Sands China’s andMelco Crown’s shares of VIP rolling chip turnover, while capacity-constrained Wynn Macau has seen its share decline. In the mass market, SJM’s share of revenue continued to fall in the face of significant capacity expansion by Sands China at Sands Cotai Central—the first phase of which opened on 11th April 2012, and the second phase on 20th September—and as Galaxy and Melco Crown continue to ramp up their premium-mass businesses. Sands China finally overtook SJM as the market leader in mass revenues in Q1 2013. The prices of Macau casino stocks fell near the beginning of April on worries that the H7N9 bird flu could impact visitor flows from mainland China to Macau. Though mindful of the risks, analysts believe the correction is overdone. Share of VIP Rolling Chip Turnover by Operator Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Sociedade de Jogos de Macau 28.3 28.1 27.1 28.4 27.7 Galaxy Entertainment Group 22.4 23.0 21.7 19.7 19.3 Sands China 12.5 13.3 14.9 15.3 15.8 Melco Crown Entertainment 12.6 12.8 13.6 14.3 14.6 Wynn Macau 14.3 13.5 12.4 11.5 11.6 MGM China Holdings 9.9 9.3 10.3 10.7 11.0 Share of Mass Market Revenue by Operator Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Sands China 22.8 24.7 26.4 27.8 28.8 Sociedade de Jogos de Macau 34.3 32.6 31.6 29.6 27.6 Galaxy Entertainment Group 14.3 15.0 15.5 15.5 15.9 Melco Crown Entertainment 11.8 11.3 10.7 12.0 12.3 Wynn Macau 9.5 8.8 8.5 7.8 8.3 MGM China Holdings 7.2 7.6 7.3 7.3 7.1 are relatively far away from Macau, and we believe it does not yet pose a threat to Macau’s public health and is not having any impact on visitation.” Kenneth Fong echoed that sentiment, noting: “So far, there is no proof that the disease could be transmitted between humans, a big difference compared with SARS in 2003. Besides, we believe the Chinese government is much better prepared this time around as seen from their fast response and transparent disclosure. While we don’t rule out the possibility for the disease to mutate and spread, as long as the disease is not transmitted between humans, the impact on travelling demand would be rather limited, in our view. Besides, looking back, the negative impact on travel (if any) generally lasts only for a few months.” Market Shares The relative market shares of the city’s six casino operators remained largely unchanged from the fourth quarter of In the mass market, SJM’s share of revenue continued to fall in the face of significant capacity expansion by Sands China.