Inside Asian Gaming

September 2014 inside asian gaming 27 gaming revenue. Investment brokerage Union Gaming Research Macau estimates the property has a 60% VIP market share. RWS works with the only three junket promoters registered to operate in Singapore, all of them Southeast Asia-focused, and they are not believed to be delivering significant numbers of players. Most of the VIP business is direct, with RWS granting the credit. For the half-year, impairment charges increased a greater than expected 82% to S$140 million. Union Gaming says the charges relate to VIP debt that’s been outstanding nine to 12 months and which management feels will be “a challenge” to collect. Moreover, management is forecasting a drop-off in VIP play through the rest of the year, perhaps lasting into the first quarter of 2015. Mass-market revenue is estimated to have fallen 4% in the second quarter and is likely to remain stagnant. Surprisingly, revenue from non-gaming, which includes Universal Studios Singapore, fell 3%, the first year-on-year decline in the property’s history. Some analysts chalk that up to the strength of the Singapore dollar in comparison with falling currency values in neighboring Malaysia and Indonesia, which supply significant numbers of visitors, along with China. Singapore purchasing power for the Malaysian ringgit is down 5% and for the Indonesian rupiah a whopping 19%. RWS is seeing corresponding declines in spending per visitor, and if the trend continues could experience an outright decline in visitation. Not surprisingly, Genting is counting on Mr Tan, who was responsible for the group’s success in landing the Singapore license—which might have been calamitous otherwise for the group’s competing Malaysia casino, Resorts World Genting—to come through in Japan. Some RWS staff complain that the very hands-on chief executive’s Japan-related absences hold up decision-making. But he has a lot of balls in the air. Genting has reportedly registered no fewer than nine subsidiaries there. Come Chinese New Year 2016 and the debut of the US$4 billion Wynn Palace on Cotai, Linda Chen will be sharing her fourth resort opening with her employer and mentor and biggest fan, Steve Wynn. It’s a distinction not many can claim. Fewer still can say they were there when it all began with the opening of The Mirage on the Las Vegas Strip in 1989. Back then the 47-year-old Taiwan native was, a wide-eyed graduate fresh out of Cornell University’s prestigious School of Hotel Administration. “It was,” as she recalled in a recent interview, “the best experience anybody can have.” The years in between have been quite the ride as well. As chief operating officer of the company that drives something like 70% of parent Wynn Resorts’ total revenues and more than 65% of its EBITDA, Ms Chen is regarded today as one of the sharpest competitors in Macau, a skilled diplomatist at the very top end of the market, where the Wynn brand is legendary, and an adroit manager of the higher-yielding mass market, the upper end of it, the so-called premium mass, in particular. She’s even been touted at times as Mr Wynn’s successor, a suggestion she dismisses. “Mr Wynn is very young, he’s not ready to retire soon,” as she recently told CNN . “I hope he works for another 30, 40 years, and I’ll be alongside him.” In any event, the quiet force she embodies has served Wynn Macau well, together with its sister casino, Encore at Wynn Macau, and never more so than in the city’s current operating environment, wracked as it’s been market-wide by several months of declines in VIP play and revenues, a phenomenon experts attribute to bigger-picture Linda Chen Executive Director and COO Wynn Macau issues in China, the central government’s aggressive crackdown on corruption seen as the most formidable. The results were especially evident throughout Macau in the second quarter, and Wynn was not spared. After a strong January- March period, the company’s rolling chip volume in the three months through 30th June was down 12% year on year, which was worse than the market as a whole (minus-6%), and it fell quite a bit shy of the first quarter (minus-27%). This came in the midst of a US$60 million renovation of the gaming floor launched in March at Wynn Macau which has put some 30 VIP tables out of commission— along with five mass tables and about 270 slots—and obviously that hasn’t helped. It’s a tribute to Ms Chen’s leadership that despite the challenges the company generated a 3% increase in second-quarter revenues to $960.7 million (EBITDA was up 6%), driven by a 43.3% increase in mass table revenue and a 14% increase in slot revenue. Through the first half, total revenues were up 8.8% to $2.09 billion. Gaming revenues increased 9.2%. “This was notably higher growth than the market as a whole,” noted brokerage Union Gaming Research Macau. “In the context of Wynn Macau being a capacity-constrained property, with little