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Volumes were the driver as VIP hold was only a little above normal.

Total gaming revenues grew 43% YoY and 18% sequentially to HK$23.6 billion, including the first ever HK$1 billion slot month.  The growth in May was also impressive in light of facing a difficult growth comp of 93% in May 2010.  Galaxy Macau opened on May 15th and drove a lot of the sequential growth.  We estimate VIP hold percentage was 3.10%, largely in-line with 3.05% hold in May 2010 and above April’s 2.92% (2.85% is considered normal).  If hold was 2.85% in May of 2010 and 2011, the market would have grown 41%.

Encouragingly, Mass Market table revenue increased 36% YoY while VIP revenue increased 44% YoY.  This was the best Mass month relative to VIP that we’ve seen since September.  No doubt the opening of Galaxy Macau on Cotai was a major contributor to the Mass growth. 

Galaxy Macau looks like it had a decent opening, recording about US$116 million in gaming revenues, putting it on pace to generate US$2.4 billion annualized after normalizing VIP hold, which was high.  Junket volumes were a little disappointing given how much liquidity the property pumped out to junkets.  Still, even after assuming a post honeymoon slowdown, Galaxy should generate an ROI greater than 20%.  Overall, a ½ month of Galaxy Macau pushed Galaxy’s market share 340bps above its 3 month average.

Wynn was the market share loser for the month, dropping 360bps from April and down 220bps from its 3 month average share.  However, the lost share was mostly due to low VIP hold.  Wynn’s junket volume share actually increased slightly versus its 3 month average and its Mass share declined only 70bps.  SJM, LVS, and MPEL (in that order) lost the most Mass share while MPEL and LVS were the only companies to lose significant junket volume share to Galaxy.  It’s probably no coincidence that MPEL and LVS have sizable operations on Cotai.  Sequentially, Wynn and MPEL were the only properties to report lower May revenues than April.


Y-o-Y Table Revenue Observations:

Total table revenues grew 42% YoY this month despite a difficult comp of 97% YoY growth in May 2010, with Mass growth of 36% and VIP growth of 44%.  Junket RC also grew 43% in May.

LVS table revenues grew 14% - the slowest of the concessionaires for the third month in a row

  • Sands was down 10%, driven by a 17% decrease in VIP and offset somewhat by a 6% increase in Mass
    • Sands was impacted by slightly below normal hold, a difficult hold comparison and share loss in RC play.  Adjusted for 10% direct play (in-line with 1Q11), hold was about 2.7%, compared to 3.1% hold in May 2010, assuming a 14% direct play estimate (in-line with 2Q10). 
    • Junket RC was down 2%.
  • Venetian was up 34%, driven by a 18% increase in Mass and 44% increase in VIP
    • Junket VIP RC increased 45%.
    • Hold was high in May but the prior year hold comparison was also high.  Assuming 18.5% direct play, (compared with 18.7% in 1Q11) we estimate that hold was 3.8%, compared to 3.5% hold in May 2010 (assuming 24.0% direct play).
  • Four Seasons was down 2% driven by a 13% decline in VIP which was mostly offset by 57% Mass growth
    • Junket VIP RC decreased 30%.
    • Assuming 40% direct play, hold was 3.3%, compared to an estimated hold of 2.2% in May 2010 assuming direct play levels were in-line with 2Q10 at 50%.

Wynn table revenues were up 16%

  • Mass was up 46% and VIP increased 11%
  • Junket RC increased 38%
  • A combination of low hold and difficult hold comparisons negatively impacted Wynn this month. Assuming 10% of total VIP play was direct, we estimate that hold was 2.5% compared to 3.2% last year (assuming 11% direct play)

MPEL table revenues grew 44.5%, driven by Mass growth of 77% and VIP growth of 38.5%

  • Altira was up 13% with Mass continuing its tear, up 84% while VIP grew 9%
    • VIP RC was up 30%
    • We estimate that hold was 2.9% compared to 3.5% last year.
  • CoD table revenue was up 71%, driven by 75% growth in Mass and 70% growth in VIP
    • Junket VIP RC grew 53%
    • VIP growth was assisted by an easy hold comparison and slightly above normal hold.  Assuming 14% direct play, hold was 3.0% compared to 2.5% in May 2010, assuming 18% direct play (in-line with 2Q2010)

SJM revs grew 43%

  • Mass was up 26% and VIP was up 50%
  • Junket RC was up 41%

Galaxy table revenue was up 64%, driven by 120% growth in Mass and VIP growth of 58%

  • Starworld table revenues grew 20%
    • Mass grew 24% and VIP grew 20%
    • Junket RC grew 8%
  • Galaxy Macau total gaming revenues for the first 16 days were around US$116MM ($112MM of which was table revenue)
    • Mass table revenue of $19MM
    • VIP table revenue of $93MM with RC volume of $2,314MM. Assuming no direct play hold at Galaxy Macau was 4%

MGM table revenue was up the most in May - growing 132% (MGM has been the fastest growing concessionaire for the 6th straight month now)

  • Mass revenue growth was 39%, while VIP grew 169%
  • Junket rolling chip growth also grew the fastest at 150% - MGM has had the fastest growing junket RC volume growth out of all the concessionaires for the last 9 months now
  • Assuming direct play levels of 7%, we estimate that hold was 3.10% this month vs. 3.05% in May 2010.

Sequential Market Share (property specific details are for table share while company-wide statistics are calculated on total GGR, including slots):

LVS share fell 1.3% in May to 15.6% from 16.9% in April. This compares to 6 month trailing market share (excluding May) of 16.7% and 2010 average share of 19.5%

  • Sands' share decreased 1.7% to 4.0% - hitting an all-time low share for the property across VIP, RC, and Mass market share
    • The decrease was driven by a 1.9% decrease in VIP market share to 3.1%. RC share was 3.3%, down 50bps sequentially.
    • Mass market share fell 90bps sequentially to 7.0%
  • Venetian’s share ticked up 10bps to 9.3% share
    • VIP share increased 20bps to 8.1%
    • Junket RC decreased 1.3% to 5.4%, which compares to an average of 6.3% share in 2010.
    • Mass share ticked down 10bps to 13.7% hitting an all-time low for the property. 2010 average share was 15.9% and 6 month trailing share is 14.8% for the property
  • FS share increased 50bps to 1.8%
    • VIP share increased 70bps to 1.8%
    • Mass share decreased 40bps to 2.1%
    • Junket RC share ticked up 10bps to 1%

WYNN was the biggest share loser in May, with share down 3.6% to 13.2%, driven by a combination of low VIP hold and difficult sequential hold comps.  May’s share is below Wynn’s 6 month trailing average share of 15.8% and 2010 average share of 14.9%.

  • Mass market share decreased 30bps to 10.7%, compared to an average of 10.1% in 2010
  • VIP market share dropped 5.1% to 13.3% sequentially, well below above its 2010 average of 16.0%
  • Junket RC share increased 40bps to 15.7%, above Wynn’s 2010 average of 15.2% and 6 month trailing average of 15%

MPEL decreased to 14.2% compared to an average 6 month trailing share of 15.1% and 2010 share of 14.6%.

  • Altira’s share dropped 1.1% to 4.9%, compared to 5.6% average share in 2010
  • CoD’s share fell 2.0% sequentially to 9.0%
    • Mass market share increased 40bps to 10.1%, the properties’ second best share after February's all-time high of 10.3%
    • VIP market share decreased 2.7% to 8.7% while Junket RC share decreased 1.6% sequentially to 8.7% (compared with 5.4% share for Venetian).

SJM was the second biggest share gainer in May after Galaxy.  SJM’s share grew 2.8% to 32.4%.  May share compares with an average share of 31.3% in 2010 and a 6 month trailing average of 31.1%.

  • Mass market share decreased 2.1% to 38.0% while VIP share grew by 4.6% to 32.0%
  • Junket RC share increased to 33.4% from 32.8% in April

In a reversal of last month’s trend, Galaxy was the largest share gainer in May, with share increasing to 13.2% from 9.0% in April. May obviously benefited from the opening of Galaxy Macau on May 15th . Galaxy Macau benefited from high hold during its first 17 days of operation.  May share compares with an average share of 10.9% in 2010 and a 6 month trailing average of 10.1%.

  • Galaxy Macau garnered 3.9% market share during a partial month of operations
    • Mass market share of 2.9%, VIP share of 4.1% and RC share of 3.4%
  • Starworld's market declined 40bps to 7.8%
    • Mass market share fell 60bps to 2.2% while VIP share fell 40bps to 9.4% but would have fallen more if not for the high hold this month of 3.14% vs 2.64% in April. Junket RC share dropped 1.7bps to 8.4%.

MGM's share increased 90bps to 11.4%, from 10.5% in April. May share compares with an average share of 8.8% in 2010 and a 6 month trailing average of 11.1%.

  • Mass share decreased 20bps to 8.7% - the 3rd highest property share after Venetian and CoD
  • VIP share increased 4.6% to 12.0% - the 2nd highest property share (that we track) after Wynn/Encore
  • Junket RC increased 1.6% to 11.5%, materially above the property’s 2010 average of 8.4% and its 6 month trailing average of 10.6%


Slot Revenue:

Slot revenue grew 49% YoY in May to $133MM – surpassing the $120MM record set in February

  • Galaxy slot revenues grew the most at 241%, reaching $8MM
  • At 89% YoY growth, Wynn had the second best growth, impressive given the large base. Slot revenues were $32MM - setting an all-time high for the property.
  • MGM grew 72% to $19MM - setting an all-time high for the property
  • MPEL’s slot revenue grew 36%, setting an all-time high of $25MM
  • SJM’s slot revenues grew 26.5% to $15MM
  • LVS grew the slowest at 17% but also set a company high of $34MM in slot revenues.