MACAU DIRECT VIP LITTLE CHANGED

On the heels of Bloomberg’s apparent misquoting MGM China’s CEO Grant Bowie, we decided to look at Direct VIP. 

  • In a recent article, Bloomberg asserted that MGM China is aggressively pursuing Direct VIP business at the expense of the Junkets.  MGM China claims they were misquoted and we believe them. Why would Grant Bowie alienate the junkets with such a public declaration?
  • Anyway, the chart below shows the stability of the Market Direct VIP segment over the past 2 years relative to the overall VIP business.  Direct VIP is lower relative to the 2010 highs.  Disintermediation is not likely to happen anytime soon.
  • While it’s likely that MGM could be making a push into more higher margin Direct VIP, it’s doubtful they would admit it publicly or even to Wall Street given the relationships with junkets.  MGM’s Direct VIP business as a % of total VIP has been on a slight decline.
  • MPEL seems to be the one operator making a favorable (for margins) Direct VIP move but it may be costing them some junket market share as can be seen in the second chart.

MACAU DIRECT VIP LITTLE CHANGED - v

MACAU DIRECT VIP LITTLE CHANGED - mpel