The market seems to be returning to “where it should be” in terms of Macau casino revenues following the implementation of visa restrictions and the global economic slump, according to DM.  They also forecast that from October to December, we could see monthly revenues surpass the MOP10 billion levels. 



City of Dreams is a success. MPEL’s VIP volume levels are back above MOP40 billion.  MPEL is the second-biggest concessionaire in terms of rolling-chip turnover, significantly ahead of all competitors except SJM.  DM sees weakness in their mass revenue figures; the mass table revenue for MPEL in July was just MOP170 million – even lower than the MGM grand.  Mass is “where the margins are” and it is where the future lies for Cotai.  COD needs to ramp up a lot more on the mass floor in order to meet the expectations for a US$2.1 billion property. 



MGM’s “laughable” EBITDA number of US$15m was accompanied by the news that Jim Murren is sending his best operations and marketing people to devise a turnaround plan.  The numbers for July, however, show that MGM Grand Macau is no longer a laughing stock. 

MGM’s mass table revenue of MOP192 million was higher than MPEL (including City of Dreams and Altira) and not far off that taken by Wynn (MOP273 million).  MGM’s property is the same scale as its neighbor, with high quality décor, so the excuses for underperformance are running out. DM sees it as being a traffic issue which, they say, is largely predicated on poor marketing.



Stanley Ho’s recent illness has done little to dent investors’ confidence. Stock prices in both SJM Holdings and Shun Tak Holdings have not digressed from the Hang Seng Index by much this week. This is hardly surprising, given that Shun Tak is really controlled by Pansy Ho now, and SJM is run by a very capable management team led by Ambrose So.
DM asks, “what are the succession plans for its chairman and largest (indirect) shareholder?” Dr. Ho does not control a majority of shares of STDM, which controls SJM Investments, which controls SJM Holdings.  Who the other major stockholders (the estate of Henry Folk, New World’s Cheng Yu-tung) support to succeed Dr. Ho will be the key factor.





Executive Council spokesman Tong Chi-kin said that in light of the increasingly heated commission war among casinos, it was necessary for the government to introduce anti-competition measures.  The decision to cap junket commissions could be implemented within 30 days of approval and would be enforced with fines of up to MOP 500,000 or, in serious cases, by suspension of junket licenses.

Casino executives have been supportive towards the idea of a cap but the challenge has been working out how to enforce the measure among Macau’s six licensed casino operators, 200 or so licensed junket agents and 4,000-plus unlicensed and unregulated junket "sub-agents".

Some executives have publically remarked on the enforcement issue, with Sheldon Adelson joking, “I committed to do it on the honor system, the breach of which will be reason to beat people up with a wet spaghetti noodle.”

DM is skeptical about the plan, explaining that commissions are just one part of the relationship between operators and junkets.  Credit is an important component – the more a player has, the more tempted he/she is to play. The issue of “side betting” is another problem the government will have difficulty regulating.  In addition, how will it affect revenue sharing deals?



Macau’s chief executive-elect, Fernando Chui Sai-on, is flying to Beijing on Monday to collect his appointment letter.  He is expected to receive his appointment leter from Premier Wen Jiabao.  Political commentator Larry So Man-yum said Macau people were eager to see which state officials would meet Dr Chui and whether they appeared to support him.  People are also waiting to see whether Dr. Chui will ask for favors from the central government, such as easing restrictions on mainlanders visiting Macau.  Dr. Chui’s reputation has taken a hit recently, following the awarding of a MOP32 million contract to a company owned by an election assistant to Dr Chui. The contract was formally approved by Chief Executive Edmund Ho Hau-wah on July 28th, two days after Dr Chui was chosen.


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