• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

(previously posted under Keith McCullough: 05/22/08 2:02 PM EST)


WSJ and Macau Article today detailing the junket industry and its impact on the US operators in Macau.

The big issue, which is not directly addressed in the article, is whether the government gets involved, directly or indirectly, in capping the junket commission rate.

Even with the higher rate, US operators are hardly stumbling however. With the exception of MGM, the US operators are generating excellent ROI's. Even MGM's run rate isn't bad and they are still in the ramp up phase with their issues more concentrated on the mass market side, rather than the VIP junket side.

Junkets clearly have pricing power though and unless the government gets involved, a distinct possibility, junket commissions should continue to rise.