• Navigate This Market Turbulence: All Hedgeye Research → 3 Months 66% Off

    Preserve. Protect. Grow. Former hedge fund manager and CEO Keith McCullough has successfully navigated the Dot Com Bust, Great Financial Crisis and Crash of 2020. Get 66% off the smartest investing insights money can buy.

US TITANS POISED FOR REBOUND destination-macau.com

DM gives credit to LVS and WYNN following their second quarter earnings, although they are taking “the Las Vegas Sands Corp. bigwigs at their word that they are on track to cut nearly US$300 million in annualized costs out of their three Macau properties”.   Net revenues are holding up and both organizations are much leaner than a year ago, when visa restrictions began.  This means that both companies are well positioned when a rebound in the markets occurs, according to DM

DM sees WYNN’s IPO as being the more appealing target for “smart money”. WYNN makes a lot more per visitor in Macau and it not sitting on nearly the same amount of debt.  DM also believes that Sheldon Adelson’s claims on having great options with respect to asset sales, equity purchases by third parties, or IPOs to be “total BS”.

GALAXY KEEPS GROWING destination-macau.com


EBITDA for the Galaxy Entertainment Group grew for the third straight quarter at HK$264 million, driven by cost cutting and a lucky run on the high-stakes baccarat tables.  The StarWorld Hotel and Casino had EBITDA of HK$214 million, its fourth sequential quarterly increase.  Win percentages in the second quarter certainly helped Galaxy, with RC volumes up 3.2%. 

One weak area for Galaxy was the mass market, which entails walk-in cash play rather than high-stakes players brought in by VIP junket agents who typically play on credit.  A sizeable portion of StarWorld’s main casino floor was closed for renovation from May and is set to reopen this weekend.

Galaxy continues to wait patiently on Cotai.  The company has plenty of liquidity: HK$4.5 billion currently lines the Lui family’s pocket. 


The “Big Six” have formed an association with Stanley Ho as the first chairman.  The Chamber of Macau Gaming Concessionaires and Sub-concessionaires has agreed that junket commissions should be capped at 1.25% and that the government should be worried about the rise of Singapore.  Stanley Ho suggested that the ascension of Chui to the office of Chief Executive could mean the end of “so many favors for the Americans”. 

How the junket commission cap will be enforced remains unknown.  The new chief has said that he will take his time in examining the tax situation vs that in Singapore. 


Wynn Resorts’ cost cutting in Macau and Las Vegas preserved the firm's bottom line profit in the three months to June, successfully offsetting declining revenues in both cities.  Mass market casino revenues have been hit by declining visitation numbers and the house played less lucky than previously against RC players.

The profit was still better than expected at US$73.66 million, down 28.6% from a record quarter a year earlier but up 6.1% from the first quarter.  Companywide, Wynn reported net income of US$0.21 per share, down dramatically from US$2.45 per share a year ago but significantly better than expected.

A Bloomberg survey of 10 analysts had forecast a net loss of US$0.03 per share for the quarter.


MGM said it is overhauling operations and marketing in Macau in order to boost the company’s revenue after an “underwhelming” start.  CEO Jim Murren believes that MGM’s Macau market share, being the smallest of any of the big six in Macau, is “half what it should be” and called for more aggression in marketing and building relationships with junkets.

MGM may also consider an IPO when earnings improve, Murren stated.  MGM’s venture with Pansy Ho generated $17 million in EBITDA in the first quarter of 2009.  MGM Grand had less than 9% of Macau Casino’s gross revenue in June, Portuguese news agency Lusa reported this month, citing data from operators.  MGM are sending a “major contingent” of its “best operators and marketers” to assess Macau this month, Murren said.

QUOTE OF THE WEEK destination-macau.com

“The Motherland not only provides us with powerful backing, but also continuously injects dynamism into our development." This was part of a statement released by Chui Sai-on after his formal endorsement this week as Chief Executive-elect.

Dr. Chui takes office on December 20.