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Even with the excuses, June wasn't a great month

As you already know, June in Macau was a relatively soft one with GGR up “only” 12.8%.  Mass growth was solid again, up 31%.  VIP hold was fairly normal although well above last year.  We estimate that total direct play this month accounted for 6.9% of the market, compared with 5.6% in June 2011.  The total VIP market held at 3.01% vs. 2.79% in June 2011.  Accounting for direct play and theoretical hold of 2.85% in both months, June revenues would have increased 7% YoY.

A typhoon and the Euro Football Championship likely played a role in the slower growth, but the numbers were disappointing nonetheless.  As we’ve been discussing all year long, outside of normal seasonality, there hasn’t been any real VIP volume growth sequentially since June of last year.  In fact, Rolling Chip RC actually declined YoY for the first time since June of 2009.  Thus, it’s a bit shallow to just blame the lack of growth on a storm and soccer.  Our analysis from 5/22/11 “A VIP SLOWDOWN IN THE CARDS” was proved prescient.  In that piece, we cited the lag of RC to changes in the China Lending Rate and the China Reserve Requirement Ratio which were working against junket liquidity and credit.  The good news is that China is now in monetary expansion mode.

In terms of market share, LVS and Galaxy were the big winners.  I guess we can’t really call LVS a winner yet with all the capital they put into Sands Cotai Central which has yielded only a small sequential increase in market share since it opened.  However, we do expect continued improvement to 19% over the summer and ramping closer to 20% following the opening of the Sheraton and additional amenities in September.  Moreover, while the LVS properties held close to normal, the win percentage was well below last year’s.  Galaxy has really ramped its Mass business over the past 4 months while maintaining its RC share.  In June, the company also benetted from a big jump in hold percentage which was lower than normal in June of last year and much higher than normal this June.

Galaxy and LVS were the only companies to post meaningful YoY growth in GGR.  WYNN and SJM were negative and MGM was flat.  Not good.  Wynn actually held better than last year although it was normal hold.  Wynn’s Mass market share was its lowest ever.  MGM, on the other hand, held much better than normal and last year.  Rolling Chip volume was actually down YoY at the property.  MPEL finished up 5% YoY but quarterly GGR will still be down from Q2 of last year.  MPEL held normal but above last year on VIP.  

Y-o-Y Table Revenue Observations

Total table revenue growth rose 13% in June.  Mass revenue growth was 31%, compared with 39% growth in the last twelve months.  VIP revenues grew  7%, while Junket RC declined 2%, the 1st decline since June 2009.


Table revenues grew 33% YoY, 2nd best in performance after Galaxy, due to the addition of Sands Cotai Central.  Sands China held at 3.01%, vs 3.29% last June, adjusted for direct play. 

  • Sands table revenues declined 13% YoY, extending its losing streak to three months.  The good news is that the entire YoY decline came out of the lower yielding VIP segment.
    • Mass was flat
    • VIP tanked 19% YoY.  We estimate that Sands held at 3.52% in June compared to 3.11% in the same period last year.  We assume 11% direct play  (in-line with what we saw in 1Q12).
    • Junket RC was down 21%.  This was the 7th consecutive month of YoY declines in VIP RC at the property.
  • Venetian table revenues dropped 11% YoY
    • Mass increased 26% 
    • VIP tumbled 31% while junket VIP RC dropped 25%
    • Assuming 27% direct play, hold was 3.76% compared to 4.18% in June 2011, assuming 22% direct play (in-line with 2Q11)
  • Four Seasons continued to perform well, soaring 232% YoY due to an easy revenue and hold comp 
    • Mass revenues increased 69%, reversing two months of declines
    • Junket VIP RC increased 227% YoY and VIP revenues soared 337%
    • If we assume that monthly direct play volume of ~$650MM is in-line with 1Q12 absolute levels, that implies a direct play percentage of 28% and a hold rate of 1.79%.  In comparison, if June 2011 direct play was around 41% then hold was approximately 1.12%.
  • Sands Cotai Central produced $117MM in June, compared with May's $135MM
    • Mass revenue of $34MM, $2MM higher MoM
    • VIP revenue of $83MM, $19MM lower MoM
    • Junket RC volume of $2,354MM, a 8% decline MoM
    • If we assume that direct play was 15%, hold would have been 3.01%, compared with May's 3.39% and April's 2.29%.


Wynn table revenues fell 13% in June, again exhibiting the worst table performance of all 6 concessionaires.  Wynn’s hold was normal this June and last June.

  • Mass declined 1%, the 1st decline since Sept 2009 while VIP dropped 16%
  • Junket RC declined 17%
  • Assuming 10% of total VIP play was direct (in-line with 1Q12), we estimate that hold was 2.80% compared to 2.75% last year (assuming 8% direct play – in-line with 2Q11)


MPEL table revenue rose 4% due to strong performance at CoD. 

  • Altira revenues fell 25%, due to a 28% decrease in VIP.  Mass grew 13%. 
    • VIP RC decreased 24%, marking the 7th consecutive month of declines which have averaged -20%
    • We estimate that hold was 2.89%, compared to 3.05% in the prior year
  • CoD table revenue jumped 26%
    • VIP revenue and Mass revenue both gained over 20% 
    • RC increased 3%
    • Assuming a 16% direct play level, hold was 2.81% in June compared to 2.35% last year (assuming 13% direct play levels in-line with 2Q11)


Table revenue fell 2%, 2nd straight month of declines

  • Mass was up 18% offset by a 10% drop in VIP
  • Junket RC was down 15%
  • Hold was 2.67%, compared with 2.52% last June


Galaxy posted the best table revenue growth of 64%, with Mass soaring 82% and VIP growing 60%.

  • StarWorld table revenues grew 22% 
    • Mass grew 42%, while VIP grew 20%
    • Junket RC fell 4%, the 1st time since October 2008
    • Hold was normal at 3.48%, compared with last June's 2.79%
  • Galaxy Macau's table revenues grew 120%, roughly shared equally by Mass and VIP segment
    • RC volume almost doubled and hold was 3.59% 


Table revenues declined 1.4%

  • Mass revenue grew 29%
  • VIP revenue fell 8%, while VIP RC dropped 23%
  • If direct play was 7%, then June hold was 3.43% compared to 2.82% in June 2011

Sequential Market Share


LVS share in May was 18.6%, +1.7% MoM, the highest share since October 2010 as SCC ramps up.  This compares to a 6 month trailing market share of 17.5% and 2011 average share of 15.7%.

  • Sands' share was 4.0%.  For comparison purposes, 2011's share of 4.6% and 6M trailing average share was 4.1%
    • Mass share was 5.5%, an all-time low
    • VIP rev share was 3.4%
    • RC share was 2.8%, in-line with its 6M average
  • Venetian’s share increased 1.4% to 7.4%.  2011 share was 8.4% and 6 month trailing share was 7.8%.
    • VIP share increased 140bps to 5.2% and mass increased 90 bps to 13.2% 
    • Junket RC fell 120bps to another all-time low of  3.2% 
  • FS dropped 30bps to 2.7%.  This compares to 2011 share of 2.2% and 6M trailing average share of 4.2%.
    • VIP share declined to 3.0%.   
    • Mass share rose 30bps at 1.9%
    • Junket RC gained 30bps to 3.6% 
  • Sands Cotai Central achieved table market share of 4.2% in June, slightly lower than May's 4.3% share.
    • Mass share of 4.3%
    • VIP share of 4.1%
    • Junket RC share of 3.8%


Wynn’s share was 11.8%, far below its 6-month trailing average of 12.6% and 2011 average of 14.1%.  We expect Wynn’s share to continue to struggle in the face of a ramping Sands Cotai Central.

  • Mass market share was 8.6%, a new low 
  • VIP market share rose 90bps to 12.8%
  • Junket RC share remained steady at 13.3%


MPEL gained 60bps of share in June to 12.9% which is below their 6 month trailing share of 13.6% and 2011 share of 14.8%.

  • Altira share increased 0.7% points to 3.9%, which is in-line with its 6M trailing share but below the property’s 2011 share of 5.3% 
    • Mass share fell slightly to 1.3% 
    • VIP jumped 110bps to 5.0%
  • CoD’s share fell slightly to 8.8%; below its 2011 and 6M trailing share of 9.3% and 9.4%, respectively
    • Mass market share fell 40bps to 9.5%
    • VIP share was unchanged at 8.5%
    • Junket RC gained 40bps to 8.2%


SJM was the biggest share loser in June (reversed its course from May when it was the biggest share gainer), down 4.1% MoM to 25.2% share; lower than its 2011 average of 29.2% and above its 6M trailing average of 27.2% 

  • Mass market share rose slightly to 32.8%
  • VIP share fell 6.0% to 23.1%, its lowest level since August 2009
  • Junket RC share fell slightly to 27.9%


Galaxy’s share rose to 22% from 19.6%. Its 6M trailing share average was 19.1%. 

  • Galaxy Macau share increased 120bps to 12.6% - a new high
    • Mass share matched its all-time high of 9.6%
    • VIP share increased 180bps to 13.8%, marking an all-time property high
    • RC share increased 50bps to 12.4%, a new high
  • Starworld share gained 123bps to 8.7%
    • Mass share was roughly unchanged at 3.2%
    • VIP share soared 210% to 10.9%
    • RC share increased 30bps to 10.0%


MGM share fell 1.0% to 9.5%, below its 2011 share of 10.5% and 6M average of 10.1% 

  • Mass share fell 30bps to 7.7%
  • VIP share dropped 120bps to 9.7%
  • Junket RC dropped 150bps to 8.4%

Slot Revenue

Slot revenue totaled $124MM in June, falling 14% from an all-time high set in May

  • MGM grew the most at 49% YoY to $22MM
  • GALAXY had the second best growth at 26% YoY to $13MM
  • LVS grew 24% YoY to $33MM
  • MPEL grew 17% YoY to $22MM
  • WYNN fell 18% YoY to $19MM
  • SJM lost 20% YoY to $15MM