The latest Macau figures show table revenues at the familiar average of HK$775 million per day for last week (HK$5.425 billion for the week), exactly in-line with the comparable week of 2013. As such, we don’t believe the number can be relied upon. Our GGR expectation for flattish YoY growth for the full month of June remains.
As you’ve probably read, there was a major bust of an Asian world cup betting ring, most of it in Macau. Some of the arrests were apparently made at Wynn Macau where participants were operating out of one or more hotel rooms there. We are hearing that players’ agents for one or more of the big junket operators were involved. Here is a link to one of the articles:
http://edition.cnn.com/2014/06/23/world/asia/macau-illegal-betting-world-cup/index.html?eref=edition
It is our belief that junket volumes in June were negatively impacted as sports bets were redirected from the VIP tables. The size of the illicit betting volumes is uncertain but it does appear to be sizeable. Normalize the world cup activity and low hold, which we heard during my trip to Macau last week, and June may not have been that bad of a month for the casinos. In addition, VIP volumes, while still weak, may not be as bad as the weekly numbers suggest. The trade may be higher from here on these stocks.
MGM and SJM are outperforming thus far in June in terms of market share while Wynn and MPEL remain below trend. MPEL may have more exposure to squeezed junkets than the other concessionaires which could be contributing to its weak share. For Wynn we have downgraded our expectation for a more expansive credit policy with junkets. Wynn looks to remain conservative in its approach given the uncertain environment.
