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March was an odd month; a hot start, some head-fakes and misinformation, and ending in disappointment. VIP hold was lower than normal and the American companies continue to lose share.


VIP hold percentage was below normal which may have been partly responsible for the March misinformation in the press about revenues potentially being up 60% or more.  March's hold (quantified on just reported Junket RC) was 18 bps light of the TTM average,  20 bps below the average 3yr hold, and 55 bps below March 09 hold levels. Using a 3yr average hold would have resulted in 7% higher y-o-y growth. Alternatively, Junket RC increased 75% while VIP revenues only increased 47%.  Mass revenues grew 32% y-o-y, inline with a 6 month average 35%.

While some of this can be hold related, there is a clear trend of American companies continuing to lose share.  LVS lost 40bps of share from February and 680bps from March 2009.  Wynn lost 160bps and 280bps, respectively.  Despite the 42% increase for the market, LVS grew total revenues only 5% year over year while Wynn Macau increased only 17%.  Here is some detailed commentary.

Y-o-Y Table Revenue Observations:

LVS table revenues increased only 5% with all growth coming from a 16% increase in Mass revenues while VIP revenues were actually down 0.4%

  • Sands fell 3%, dragged down by a 6% decrease in VIP which was somewhat offset by a small 2% increase in Mass
    • The VIP decline was entire driven by weak hold coupled with a difficult hold comp.  Junket Rolling Chip (RC) was actually up a healthy 51%.  In March 2009, Sands benefited from very strong hold of roughly 4%, assuming 13% direct play.  If we assume 10% of total VIP play was direct in March '10, this implies hold of 2.6% 
  • Venetian was down 6%, driven by a 23% decline in VIP revenues which was only partly offset by 30% growth in Mass
    • Junket VIP RC only increased 60bps, so the decline in VIP revenues was hold related.  Assuming 19% direct play, we estimate that Venetian held at 2.6% compared to a hold of north of 4% last year assuming 17% direct VIP play.
  • Four Seasons was up 210% y-o-y entirely driven by 458% VIP growth with Mass declining 21% 
    • Junket VIP RC increased 189% to $727MM. 

Wynn Macau table revenues were up 17%, primarily driven by a 21% increase in VIP while Mass revenues were only up 4%

  • A massive 84% increase in Junket RC was dampened by what looks like very weak hold of roughly 2.3%
  • Wynn Macau was only able to grow Mass revenues in single digits in all three months of Q1 

Crown table revenues grew 133%, with the growth fueled by 653% growth in Mass and 101% growth in VIP

  • Altira was down 4%, with VIP down 4% while Mass increased 4%
    • VIP RC was down 1% and luck was bad - only 2.3%.  However, hold was also bad last year
  • CoD table revenue increased 2% sequentially, due to a 6% increase in VIP win which was partly offset by a 7% decrease in Mass
    • Mass was $33MM
    • Junket VIP RC increased 18.4% sequentially
    • If we assume 20% direct play at CoD (in line with what MPEL said on their earnings call), then total VIP RC would be $3.75BN.  However, hold in March was weak at only 2.4%.

SJM continued its hot streak, with table revenues up 67%

  • Mass was up 32% and VIP was up 90%
  • Junket RC volumes increased 122%
  • As we wrote about on several occasions, we believe SJM is being very aggressive on junket pricing

Galaxy table revenue was up 59%, mostly driven by a 67% increase in VIP win, while Mass increased 18%

  • Starworld's table revenue was up whopping 102%, driven mostly by 116% growth in VIP revenues, while Mass increased 14% y-o-y

MGM table revenue was up 17%

  • Mass revenue growth was 20%, while VIP grew 16%
  • VIP RC grew 33% y-o-y but hold comparisons were unfavorable. Assuming 15% direct VIP play, hold was 2.8% vs. 3.6% last year


Market Share:

LVS share dropped 40bps sequentially to 19.2%, with all the share loss coming from VIP. This is LVS's lowest share month since August 2007

  • All of the share loss was from VIP.  LVS's share of VIP revenues decreased to 16.4% from 17.2% in February'  However, LVS's share of Junket RC actually increased 20 bps to 13.5%
  • Mass share increased by 30 bps to 26.9%.
  • Sands lost 40bps, dropping to 6.4% sequentially.  This marks the properties' lowest share quarter since we've been tracking the data and likely its lowest share quarter since opening.  Sands lost share across both VIP and Mass.
  • Venetian lost 70bps to 10.2% sequentially.  Venetian's has only had one month (Sept 09) with worse share since opening.  
    • Venetian actually gained 70bps of market share in Mass sequentially to 17.1% but Mass gains were offset by a 140bps sequential drop in VIP share
  • FS share increased 70bps to 2.6%
  • After SJM, LVS commanded the second highest share of the Mass market with 26.6%, followed by Crown at 10%

WYNN's share fell to 12.9% from 14.5% in February

  • Wynn's loss was entirely driven by low VIP hold.  Wynn's share of the VIP revenues plunged from 16.5% in February to 14.1%.  Junket RC share only fell by 10 bps to 15.6% - still second only to SJM but Crown was a close 3rd.

Crown's market share fell by 70bps to 12.9% in February

  • All of the share loss came from Altira, whose share dropped to 5.3% from 6.1% in February. 
  • Altira's share drop was entirely due to a 1% decline in VIP share to 6.8% which was driven by the property's low hold
  • COD's share was flat at 7.5%.  Mass market share decreased by 1.2% to 7.6% and VIP share increased by 50bps to 7.5%

The American's loss was SJM's gain.  SJM's share climbed to 35.1% from 32.3% in February and 30.9% in January - its highest share month since Nov 2007

  • All the gains came from VIP share which increased 390bps to 32.6%
  • As we've been writing about, SJM has been aggressive on junket commissions to pursue market share at the expense of margins
  • More scrutiny on the American companies in regards to junket relationships may continue to erode their share of the VIP business
  • SJM Mass share declined by 1% to 41.6% sequentially

Aside from SJM, Galaxy was the only other concessionaire that gained share.  Galaxy's share increased to 11.9% from 11% last month

  • Starworld's market share was increased by 1.3% sequentially to 9.5%
  • Galaxy and it's flagship property gained share in both Mass and VIP in March

MGM's share decreased by 90bps to 8.1%

  • MGM's share loss can be attributed to a 1.2% sequential decrease in VIP share to 8.2%.  Mass share decreased 10 bps to 7.7%

Slot market commentary:

  • Slot win grew 32% y-o-y to $83MM
  • LVS's slot win grew across all 3 properties by 24% y-o-y to $27MM
  • Wynn slot revenues increased by 7% y-o-y to $16MM
  • Melco's slot win grew 109% y-o-y
  • MGM's slot win grew 48% y-o-y to $9MM
  • SJM's slot win grew 22% to $12MM
  • Galaxy was the only concessionaire that didn't see y-o-y grow in slot win.  Galaxy's slot was was down 20bps to $2MM