The Macau Metro Monitor.  December 18th, 2009




While the opening ceremony of Oceanus was anticlimactic due to the rain, the property was well-received.  DM believes that Oceanus will be good for SJM but doubts that it will be a game-changer, as many predict.  Despite the view that SJM dominates the “high-margin” mass market, with a 42% share, Venetian and Wynn make far more money from mass business when you strip out marketing costs (what SJM has to pay back to its third-party partners). 




Marina Bay Sands has been allowed more time to open its integrated resort by the Singapore government.  The message from the government suggests that MBS can take up to another 12 months to finish the project without major repercussions related to the opening date.  However, the government has the open-ended right to determine if MBS should be punished for being “reckless” or “negligent” in its development.


In contrast, DM envisages a situation in Macau within the next 18 months to two years where Sands China is on track to reach a 1:1 debt-cash position, while throwing off more than US$1.5 billion in annualized EBITDA.  DM questions why anyone would want to be invested in LVS rather than Sands China.




Altira’s rolling-chip volumes cratered last month.  COD’s were not very impressive either.  It seems that players are moving back to SJM properties.  This would support what we have been hearing, which is that MPEL is phasing Amax out of its consolidator role at Altira in order to comply with the commission cap, which was being put before the concessionaires last month.  MPEL is making more of an effort to promote Altira as a high-end luxury property to direct clients.  The following narratives are being circulated at present:

  • Altira is going to be sold to SJM at a knockdown price
  • MPEL is going to be sold to SJM at a knockdown price.  Altira’s numbers are dropping to ensure the knockdown price
  • SJM will take Macau Studio City and Altira as third-party casinos under their umbrella, and MPEL will be left with just COD.  Some cash will change hands so that MPEL can pay down debt and avoid covenant breaches in September 2010

An announcement this week that MPEL is asking its creditors to amend the covenant is the only event that would give any credence to these rumors. 



The Macau Legislative Assembly approved the 2010 budget, which projects total revenues of MOP52.422 billion (US$6.56 billion), a rise of 9% compared to the 2009 budget.  In terms of “income from gambling and other casino games”, the government expects 2010 will bring MOP33.8 billion, or MOP5 billion more than in 2009. 

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