Here are some tidbits regarding MGM's IPO and its junket business.
We are hearing that MGM will launch its Macau IPO in late March. There have also been a couple of recent developments related to MGM Macau. First, while it appears that SJM and Wynn have reached agreements for Cotai land, MGM has not. Thus, we believe a future Cotai project will be referenced during the MGM IPO process. However, the focus will be on the growth – market and market share – and improving profitability at the existing MGM property. More importantly, we think MGM may have secured the business of the junket operator Ocho, which is moving its room from SJM’s The Grand Lisboa (GL) to MGM after Chinese New Year. Ocho currently provides up to 20% of GL’s Rolling Chip volume. This is a pretty big deal for MGM which will help them keep the market share momentum going. The willingness of junkets to move away from the Stanley Ho empire should continue, to the likely benefit of MPEL, MGM, and Galaxy.