MACAU: LIMITED VALUE OF CASINO WALK THROUGHS

There is a substantial high-end business in Las Vegas but it is slots and mid-level table play that comprise the bulk of gaming revenues.  Thus, we can derive a pretty good guess of gaming revenues given the visitation figures and even the airport traffic numbers.  Indeed, the correlation between the number of monthly Las Vegas visitors and gaming volume is 0.66.

Macau is a whole different environment.  Visitation has very little correlation to gaming volumes and revenue.  That may not be a surprise when considering the VIP segment.  However, even the Mass business has shown an immaterial correlation, R Square, and T-stat in the regressions, albeit slightly more correlated to visition than VIP.  The VIP and Mass segments continue to be driven by high end players.  This will probably change over time should slots ever take off and as the market grows.

For now, pay little attention when someone says "the casinos are packed" or "the casinos are empty".