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It may be too early to say definitively but Wynn Macau has been losing share recently in both Mass and VIP.

Let’s face it: the Cotai Strip is gathering momentum.  Well, it’s not like most of Macau is not doing extremely well.  However, Cotai is gaining share – and was gaining share even before Galaxy Macau (GM) opened on May 15th of this year.  The following chart depicts Cotai’s share surge beginning in February 2011 for VIP and April 2011 for Mass.

WYNN MACAU SOFT PATCH - COTAI

Obviously, Wynn Macau is not situated on Cotai and the company will not have a presence on Cotai until at least 2015.  We don’t want to make too big a deal of a few months of share shift but it is curious to see Wynn lose share for more than an isolated month here and there.  Wynn has lost share in both Mass and VIP the last two months from June as can be seen in the following chart.

WYNN MACAU SOFT PATCH - WYNN

GM seems to be having an effect, albeit delayed.  We know GM has been very aggressive on the junket commission front, in terms of levels and commission advancement.  City of Dreams was already aggressive.  The two recent losers in this segment offer the least attractive commission structures:  Wynn and Sands China.  Sands China’s junket issues have been well documented – at least by us.  Could it be that Wynn’s cherished junket business is showing some chinks?  They have been by the far the most productive and profitable despite offering the junkets less.  Maybe a slight increase in the amount of commissions advanced could stem the tide.

The drop off in Mass hasn’t been as severe and its sustainability remains to be seen.  However, the drop off is possibly even more perplexing.  GM opened on May 15th and Wynn’s Mass share barely moved in May or June before dropping in July and August.  Wynn certainly doesn’t dominate Mass like it does VIP so it has less to lose.  However, given the profitability of Mass in general and Wynn specifically, this is a trend that the company needs to reverse.