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It has been a year since the Macau government first began suggesting that junket commissions be capped by law.  Thus far, no law has been enacted and casinos have discussed and, in some cases, implemented a cap of their own accord.  The Venetian and City of Dreams have taken the lead in this regard, with their 1.25% commission caps being brought into effect since July 1.

Concerns remain: can they trust each other to stick to the deal? Rumor has it several junkets have been telling Venetian that COD has breached the cap, and vice versa.  Can they avoid losing business to the other thirty properties in Macau who are free to pay higher commissions to junket operators?  This operator suggests that the best solution is for there to be a unilateral cap enforced by an "independent regulator" - the government.  Until political will emerges, he writes, an enforceable and across-the-board cap looks unlikely.

COTAI GOES "COM-CAP" destination-macau.com

Destination Macau has heard of big players pushing back on the Venetian's decision to implement a junket commission cap but cites an "informed source" as saying, "it has made no impact to our business".  COD claims that the decision is about "optimizing table performance" and focusing on the direct-player business - high-rollers who prefer to play with their own credit and don't need junket services.  DM says that this was a risky move for the Cotai properties, but there could be other ways in which COD and Venetian can accommodate the junkets, "i.e. with performance bonuses that involve a revenue-share split.


According to Macau Business, Chui told a group of more than 100 gaming industry executives that, "I have collected a lot of opinions and understand that decreasing the gaming tax can increase the competitiveness of the gaming sector." A change in the gaming tax would require legislative ratification, and while Chui isn't committing to any action he's letting the market know that he understands the concern that Macau gaming revenues could be negatively impacted by Singapore which has only a 5% tax rate compared to a 39% gaming tax in Macau. 

However, any revisions would not occur until after observing the impact, if any, of the Marina Bay Sands and Genting's ResortsWorld. 

There is also a question of who exactly will benefit from a tax cut. The obvious conclusion is that a tax cut would flow through to the bottom line of the concessionaires, but junkets will surely want their cut as well, which will likely manifest itself in higher commissions. Do not be surprised if there is a compromise between Chui, the Big Six, and the junkets, but it will take some time.

LVS APPEALS FOR DEBT RELIEF destination-macau.com

What Sheldon Adelson's options are for raising money has become a subject of speculation of late.  He has said that an IPO on the Hong Kong stock exchange is an option, an asset sale is another, construction financing on Lot 5&6 is another, and a private placement of equity in his Macau entity is yet another option.  Which one, or which combination, he chooses remains to be seen.  The other question remains whether all the options are even viable given current market conditions.

The recent admission that LVS is in talks with holders of its Macau debt on the terms they have for repayment of US$3.5 billion is seen as a sign that time may not be on Adelson's side, according to DM.  Whether some of the aforementioned capital-raising options are off the table is unknown.  DM is hearing that Adelson has to raise money from Macau assets in order to fund the finishing of the Marina Bay Sands.  The assets are obviously not entirely in his control so the only way for him to free them up will be to "relinquish control of the Macau operations - for a premium."  DM admits that the source on this story is biased and that Adelson still has plenty of gas (his net worth) in the tank.


The Macau government has implemented a scheme to subsidize homebuyers.  The plan has attracted a large number of applicants and pushed up property prices.  The prices of secondary market flats have risen by about 30% since January - back to pre-global meltdown levels.  Residents buying flats worth no more than 2.6 million patacas with a mortgage can apply for an interest subsidy of up to 4% under the scheme.

Lawmakers are concerned that the scheme may inflate home prices and entice buyers into a trap of negative equity. An anonymous property agent is cited as saying that a number of people had bought flats in April and May and were now preparing to "sell" them to their children who were applying for the scheme.


David Chow announced this week that he will demolish the Tang Dynasty shopping store and pour another HK$3 billion into the first phase of his redevelopment of Fisherman's Wharf, acknowledging that his project on the waterfront has not lived up to expectations. DM sees it as being an intelligent move. Building new hotels and enclosing the amphitheatre to make it possible to do all-weather shows will give Fisherman's Wharf a better chance of attracting people to the property on the peninsula. 

More investment is planned for the redevelopment; it will require HK$8 billion to finish altogether.  Once finished, SJM will have the Sands surrounded...


Despite its stated intention of butting 3,000-4,000 jobs at the Venetian Macao, Sands Macao, and "Parcel Two", the Venetian Macau Limited has opened its arms to local residents by offering them "hundreds of jobs" at the Venetian Macau Resort-Hotel and the Sands Macao Hotel.


DM admires StarWorld's recent performance - packing the main gaming floor and improving its win-per-table numbers for a few weeks now by closing half of it for renovations.  The newly refurbished area, which opened this week, is extremely impressive and is being well-received.

Ahead of L'Arc opening next door on September 21, StarWorld is clearly going upmarket.  The appearance and atmosphere of the property has been enhanced.