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MASS IS THE WORD destination-macau.com

Although July’s visitor statistics showed that the overall market was down almost 15% year-over-year, this year’s number up 20% month-over-month and was facing a difficult y-o-y comparison with a record July ’08 figure. DM also states that it wasn’t until the middle of the month that mainlanders began “to stream across the border again” and that “August is proving to be a cracker”.

DM’s people on the ground are suggesting that the crowds on the floors look “like they do with weekend crowds”.  August is traditionally a good month, and it was only in September last year that the visa restrictions really began to bite so September will be key to keeping up the positive sentiment.

HERE COMES VML destination-macau.com

The Venetian is going to be looking good once month-end numbers come out.  VML (Venetian Macau Limited) can absorb the kind of volume it is seeing recently with ease and the timing is perfect for the operator.  Steve Jacobs, president for Macau, has been doing an impressive job cutting costs and ramping up revenue.  A local news outlet reported that 1,000 (speculation is that it could be as many as 3,000) people had been let go since Jacobs came on board, including people transferred to Singapore and to City of Dreams. 

Meanwhile, revenue is increasing.  DM suggests that US$1 billion in EBITDA could be possible at the three Macau properties over the next twelve months.  DM sees LVS as having a lot of potential; there is a possibility of an IPO in the near future, loan covenant pressure could be alleviated, possible assets sales and also a superior lodging product among the current “sordid” hotels on the peninsula. 

WHO’S A DIRTY ROTTEN SCOUNDREL, THEN? destination-macau.com

Allegations are already flying around among Macau concessionaires regarding who is breaking the previously agreed junket commission cap of 1.25%.  Some are claiming others are offering 1.4%, others that 1.25% plus a 0.2% bonus is being offered. 

It is difficult to know if Melco-Crown is involved in such behavior, but the rumor certainly is out there. It could be true, or it could be junkets trying to stir the pot in order to get other operators to raise their commissions in retaliation.  Junkets like Dore and Sun City are teaming up at the Lan Kwai Fong hotel to form a revenue share deal with SJM.  While the rooms at Lan Kwai Fong Hotel can’t compete with WYNN’s the margins are certainly juicier there, especially on mass play.

WYNN WILTING? PUH-LEASE! destination-macau.com

Wynn’s IPO application is being reviewed by the HKSE September 10, and could launch the public offering as soon as October.  Some competitors are taking pleasure from the recent market-share numbers which show Wynn falling down the pecking order.  City of Dreams, MGM Grand, and StarWorld are going after Wynn and his biggest junket operator is setting up show at the Lan Kwai Fong hotel.  That’s not to mention that L’Arc is opening up across the road.

DM believes that Wynn is not going to get involved in a discount war, seen as it is a five-star property, and that EBITDA is what counts – not revenue.  Encore opening up in the second quarter of next year will raise the bar on the luxury gaming experience in Macau.

SJM: BIDDING WAR TO COME? destination-macau.com

DM is quoting “Wife No. 3” in saying that Stanley Ho is not going to leave the hospital any time soon. Bankers are starting to consider the possibility of a bidding war breaking out for control of SJM Holdings, the HK listed owner of Sociedade de Jogos de Macau, the gaming concessionaire.

Should Stanley Ho concede all of his voting right in STDM, which owns 61% of SJM Holdings, it would still be insufficient to ensure a result at an EGM if one were called to replace Dr. Ho.  The remaining decision makers, Ho's sister Winnie, the charitable foundation of the late Henry Fok and tycoon Cheng Yu-tung are unlikely to simply choose a contender from Pansy Ho, Lawrence Ho, Angela Leong. Therefore, control will likely be gained by whichever party wants to step up the plate and put forth the highest offer.