• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here


    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

LVS and WYNN both hit an all-time low in market share.

September gross gaming revenues (GGR) increased 38% YoY to $2.64BN.  With the detail in hand, we can confirm that while growth was strong, the month was negatively impacted by a difficult hold comparison last year and low hold.  Assuming that GM’s direct play level was 4% in September, total direct play this month was 6.0% of the market, compared to 7.6% last year.  The total market held at 2.79% vs. 3.00% in September 2010. Normalizing for hold, September would have increased 47% YoY.  High margin Mass business increased 39% - just slightly lower than the 40-41% growth we’ve seen during the last 4 months.  VIP revenues increased 39%, while VIP Junket RC increased 52% YoY.  Slot revenue growth chugged along at 23% YoY – in-line with last month. 

Below are some other quick observations before we get to the monthly detail:

  • YoY Mass growth remarkably consistent the last few months - around +40% and higher than growth earlier in the year
  • MPEL Mass share down but VIP Rolling Chip and revenue share took a big jump up
  • LVS posted the first negative growth month of any operator since the ugly days of 2009 – somewhat hold related but Mass share was the lowest ever
  • As expected, September was a poor VIP month at Wynn.  Mass was a little better than the previous 2 months but still below the rest of the year
  • Great month for Galaxy despite low VIP hold % - Mass share was terrific while VIP volume was healthy

The Honk Kong operators continue to outperform.  We again would highlight the strength of MPEL relative to Street estimates.  We are currently 20% above the Street for Q3 EBITDA, a little below our prior estimate due to September’s shift from Mass to less profitable VIP.  

Y-o-Y Table Revenue Observations

Total table revenues grew 38% YoY this month, on top of 39% growth las­t September.  September Mass revs rose 39%; VIP revs grew 39%; and Junket RC rose 52%. 

For the first time since July 2009, LVS table revenues actually fell YoY.  Over the past 14 months, LVS’s table revenues have grown at roughly 1/3 of the market’s pace.

  • Sands was down 23% YoY, driven by a low hold. The YoY decline was driven by a 41% drop in VIP slightly offset by 12% increase in Mass
    • Junket RC was up 33%
    • Sands held very low in September and had a very difficult YoY comp.  Adjusted for 12% direct play (in-line with 2Q11), hold was about 1.74%, compared with 3.93% hold in August 2010 assuming 14% direct play (in-line with 3Q10). 
  • Venetian was the only property in the LVS portfolio to be up YoY. Table revenue increased 24% YoY, driven by a Mass increase of 13% and a VIP increase of 32%
    • Junket VIP RC grew 12%
    • High hold and easy comps helped Venetian in September.  Hold was 3.16%, based on 20% direct play vs. 2.53% in September 2010 assuming 23% direct play levels.
  • Four Seasons was down 50% YoY, VIP revenues took a 70% nose dive- mostly hold driven, which was slightly offset by 103% growth in Mass. 
    • Junket VIP RC fell 10% YoY – the worst performer in the market
    • Results were negatively impacted by low hold and difficult hold comparisons.  Assuming 40% direct play (compared to 41% in 2Q11), we estimate hold was just 1.2% compared to 3.3% in September 2010 assuming 41% direct play. Even if the direct play percentage fell to 35% -which wouldn’t surprise us, hold would still have only been 1.25% in September

Wynn table revenues were up 29%, negatively impacted by low hold

  • Mass was up 43% and VIP increased 26%
  • Junket RC increased 47%
  • Assuming 8% of total VIP play was direct (in-line with 2Q11), we estimate that hold was just 2.3% compared to 2.6% last year (assuming 13% direct play – in-line with 3Q10)

MPEL table revenues grew 38%, driven by Mass growth of 36% and VIP growth of 38%

  • Altira revenues rose 34% with Mass growth moderating to just 15% while VIP grew 36%, despite low hold and difficult comparisons
    • VIP RC increased 64% - the most of any mature property in September
    • We estimate that hold was 2.8% vs. 3.5% last year
  • CoD table revenue was up 39%, driven by 41% growth in Mass and 39% growth in VIP
    • Junket VIP RC grew 32%
    • Assuming a 13% direct play level, hold was 3.5% in September compared to 3.3% last year

SJM revs grew 33%

  • Mass was up 27% and VIP was up 36%
  • Junket RC was up 28%

Galaxy table revenues continued its streak of triple-digit gains, +129%; mass soared 272%, while VIP gained 114%

  • StarWorld table revenues grew 28%
    • Mass grew 43% and VIP grew 27%
    • Junket RC grew 43%
    • Hold was high at 3.1% but it was even higher last September at 3.5%
  • Galaxy Macau's total table revenues were $241MM, 13% lower than August's 
    • Mass table revenues rose 7% MoM to $46MM
    • VIP table revenue of $195MM, a decline of 17% MoM with RC volume of $7BN. Assuming 4% direct play, hold was 2.8%.

MGM table revenue gained 46% YoY, the slowest growth since August 2010

  • Mass revenue growth was 30%, while VIP grew 50%
  • Junket RC climbed 58%
  • Assuming a direct play level of 8%, we estimate that hold was 3.0% this month vs. 3.1% in Sept 2010 assuming direct play of 9% 

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

LVS share fell 50bps sequentially to 13.7% - another all-time low for LVS. This compares to 6 month trailing market share of 15.4% and 2010 average share of 19.5%

  • Sands' share dropped 1.6% to 3.4%, a new low
    • VIP rev share was only 2.2%, half of August's share
  • Venetian’s share rose 150bps sequentially to 8.5% share
    • VIP share gained 250bps to 7.0%, which is in-line with TTM average
    • Mass share dropped 2% points sequentially to 13% - below the 14% average for the trailing 6 months
    • Junket RC gained 30bps to 4.9%
  • FS share fell 50bps to 1.2%
    • VIP share dropped 70bps to 0.9%, lowest since June 2011
    • Mass share increased 20bps to 2.4%
    • Junket RC declined slightly to 1.3%

WYNN lost the most share for the 2nd straight month with a 1.7% drop to just 11.5%, an all-time low, which is much lower than its 6 month trailing average share of 15% and 2010 average share of 15%.

  • Mass market share was gained 60bps at 10.5%
  • VIP market share plummeted 250bps to 11.4%; WYNN has lost 5.3% share in VIP in two months.
  • Junket RC share rose 60bps to 13.5%, below its 6 month trailing average of 14.9% and 2010 average of 15.2%

MPEL market share rose 1.6% points to 16.1%, higher than its average 6 month trailing share of 15% and 2010 share of 14.6%.

  • Altira share gained 20bps to 5.3%, compared to a 5.6% average share in 2010; 30bps share in mass share offset a 60bps improvement in VIP share. 
  • CoD’s share climbed to 10.7% from 9.2% in August as VIP strength offset weakness in Mass
    • Mass market share declined 2% points to 8% 
    • VIP share soared 2.6% points bps to 11.6%

SJM share gained the most share in September, up 180bps to 29.0%, though it is still below its 6-month trailing average of 30.0% and 2010 average of 31.3%.

  • Mass market share gained 60bps to 36.7%
  • VIP share recouped 2% points to 27.3%
  • Junket RC share fell 140bps to 28.4%

Galaxy slipped 50bps share to 19.6%. September share compares with an average share of 10.9% in 2010 and a 6 month trailing average of 14.6%.

  • Galaxy Macau share gained slightly to 9.5%
    • Mass market share gained 100bps to 7.3%
    • VIP rev and RC share were both flat and up 20bps at 10.3% and 11.0%, respectively
  • Starworld slightly lost share to 9.6%, 50 bps above its TTM pre-Galaxy Macau level.

MGM share lost 80bps to 10.1% due to weaker VIP share. September share compares with an average share of 8.8% in 2010 and a 6 month trailing average of 10.4%.

  • Mass share recovered 160bps to 8.1% but was more than offset by a 150bps decrease in VIP share to 10.6%
  • Junket RC lost 70bps to 9.5%, still above the property’s 2010 average of 8.4% but below its 6 month trailing average of 10.4%

Slot Revenue

Slot revenue popped 23% YoY but was flat sequentially.

  • Galaxy slot revenues exploded 377% YoY but lost 11% MoM to $13MM
  • MGM slot revenues had the second best growth at 33% YoY to $15MM
  • SJM slot revenues grew 12% YoY to $17MM
  • MPEL slot revenues grew 3% YoY to $20MM
  • Wynn slot revenues grew 12% YoY to $20MM
  • LVS slot revenues grew 10% YoY to $31MM