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Jack Lam, an accomplished junket operator, opened a VIP operation earlier this year at the Mandarin Oriental hotel in Macau under the Stanley Ho umbrella.  By all accounts, Mr. Lam has been successful.  We've heard he may have done almost $1 billion in VIP turnover in April alone.  We've also heard that he could be retaining a commission of 1.4%, well above the much discussed "cap" of 1.25% and certainly even more above the rate Wynn Macau is likely paying him for his VIP room at that property.

With those respective economics, it should be pretty clear where Lam's priorities are.  As can be seen in the following chart, Wynn Macau's market share began falling in February, and more rapidly in March and April.  Some of the market share loss in April can be attributed to lower hold percentage.  However, considering Lam's success at the Mandarin, most of Wynn's VIP market share loss is probably sustainable.  Every 1% of VIP market share represents approximately $80 million annually in revenues or and $15-17 million in EBITDA.

WYNN MACAU MARKET SHARE ON THE LAM - wynn macau market share 

On the Mass Market side, Wynn Macau's market share has fluctuated but the trend is pretty flat.  However, that will likely change for the worse as well.  City of Dreams opens on Monday with a high end Mass Market target market.  This segment is Wynn's power alley.  CoD is unabashedly going after the core Wynn customer.  Wynn is the better operator but with visa restrictions in place, at least for a few more months, the Mass Market is unlikely to grow enough to offset the 17% capacity addition.  Wynn could be the prime casualty.