JUNE WAS STRONG BUT...

After a strong start to the month, growth tapered off.  Digging below the headline +65%, we find that volumes were not as strong.

 

 

June table revenues came in at $1.62BN, increasing 66% YoY, while total gaming revenues increased 65%.  June's number should be no surprise to our readers as we had projected 67% last week.  Mass revenues increased 39% YoY while VIP revenues grew 77% YoY, compared to only 53% growth in Junket RC volumes.  Similar to May, easy hold comparison contributed to some of the big growth we saw this month.  Adjusting for direct play levels, we estimate that VIP hold was 2.83% in June vs. 2.45% last year.  If we normalize for hold, table revenues would have been only up 50% YoY this month.

 

The gods of luck smiled on WYNN and LVS but frowned upon SJM and Galaxy.  Luck (and Encore) explain most of the share shifts this month. 

 

Remember that July faces the first positive YoY monthly comparison of the year.  Additionally, World Cup betting should continue to steal volumes from the Macau tables.  For more details, keep reading.

 

YoY Table Revenue Observations

 

LVS table revenues increased 38%, with growth coming from a 53% increase in VIP revenues and only a 15% increase in Mass revenues.

  • Sands grew 20%.
    • 28% increase in VIP revenues.
    • 8% increase in Mass revenues.
    • Junket RC increased 34%.
  • Venetian was up 21%, driven by a 21% increase in VIP revenues and a 20% increase in Mass revenues
    • Junket RC decreased 1% YoY, however, hold more than made up the difference.  Assuming 20% direct VIP play volume, we estimate that hold for June was 3.2%.  Last June, assuming 16% direct play, the hold percentage was 2.75%.
    • Venetian VIP turnover growth was negative for the 3rd straight month.
    • Lowest mass share for LVS since pre-Venetian.
  • Four Seasons was up 283% YoY driven by 542% VIP growth and Mass growing a relatively small 11%.
    • Junket VIP RC increased 263% to $781MM.
    • If we assume over 40% VIP turnover came from direct play, hold still looks very high at north of 4%.

Wynn Macau/Encore table revenues were up 108%, primarily driven by a 138% increase in VIP revenues and a 20% increase in Mass revenues.

  • Junket RC volume increased only 59%.  Junket RC volumes grew a lot less than VIP revenues since the majority of the Encore addition was dedicated to direct play tables; the disparity implies that it's likely that Wynn played very lucky in June and that the percentage of total play coming from direct VIP increased nicely. 
  • In 2Q09, direct play volumes at Wynn were roughly 11% of total VIP.  Assuming June was in line with the quarter, hold was a low 2.4%.  If we assume that direct play volumes increased to 16%, implied hold for June is 3.5%.  2Q2010 will show a reversal of luck for Mr. Wynn - who hasn't had a "lucky" quarter in Macau since 1Q2009.

MPEL table revenues grew 138% with the growth fueled by 124% growth in Mass and 142% growth in VIP.

  • Altira was up 42%, due to a 41% increase in VIP revenues and a 56% increase in Mass.
    • VIP RC was flat YoY, but hold comparisons were favorable. Altira seems to have held high at 3.1%, compared to low hold of 2.1% last June.
    • 2Q2010 should be the property's first quarter of hold north of 3% since 1Q2009.  Perhaps that will put a temporary end to the annoying sell side questions regarding hold.
  • CoD table revenue decreased 22% sequentially to $119MM due to a 28% decrease in VIP win and a 5% decrease in Mass revenues.
    • Mass was $35MM.
    • Junket VIP RC increased 21% sequentially.
    • If we assume 15% direct play at CoD, then this is the 3rd month in a row where hold is low.  We estimate June hold of only 2.4% and hold of only 2.3% for the quarter.
    • We have heard consistently that CoD is spending a lot to "buy" its business, so margins could disappoint.

SJM table revenues grew 63%.

  • Mass was up 53% and VIP was up 70%.
  • Junket RC volumes increased 92%.

Galaxy table revenue was up 38%, driven by a 40% increase in VIP win and a 30% increase in Mass.

  • Starworld's table revenue was up 58%, driven by 59% growth in VIP revenues and 51% growth in Mass.
  • The group RC volumes were up 78% while Starworld RC volumes increased 105%.  Starworld's June hold was low - roughly 2.5% vs. 3.2% in June 2009.

MGM table revenue was up 48%.

  • Mass revenue growth was 39%, while VIP grew 52%.
  • VIP RC grew 7%.
  • We estimate that MGM suffered from low hold in June, roughly 2.5%, and in the entire quarter (2.6%).  However, last June's hold appears to have been even worse at sub 2%.

 

Table Market Share

 

LVS table share increased 230bps sequentially to 21.2%, entirely driven by good luck on the VIP business.

  • LVS's share of VIP revenues increased to 19.7% from 16.5% in May.  LVS's share of Junket RC increased 170 bps to 13.9%.
  • Mass share decreased by 110 bps to 25.5%, which is the lowest share LVS has had of the Mass business in Macau since August 2007.
  • Sands market share continued to make new lows at 6.2%, down 10bps sequentially. June sequential share loss was driven by the Mass business.
  • Venetian gained 110bps to 11% sequentially.
    • Venetian's share gain was entirely driven by a 140bps increase in VIP, while Mass share declined by 80bps.
  • FS share increased by 130bps to 4.0% - an all-time high for the property driven by good luck and strong VIP play.

WYNN's table share increased to 17.2% from 15.6% in May.

  • VIP revenue share increased 260bps to 19.9% sequentially while Mass revenue share decreased 20bps to 9.7%.
  • Wynn's VIP share is second only to SJM at 26.3%, followed by LVS at 19.7%.
  • Some of Wynn's market share gains in VIP seem to be driven by luck.  Wynn Junket RC share decreased 120bps to 15%.

Crown's market share decreased by 60bps to 13.1% in June, with both properties contributing to the loss of share.

  • CoD's share decreased 20bps to 7.3% due to losses in VIP share which were partly offset by gains in Mass share.
  • Altira's share decreased to 5.8% from 6.3% in May.

SJM's share slipped by 280 bps to 30.3%, its lowest share since August 2009.

  • SJM's share loss was entirely driven by their loss of 450bps of share in VIP to 26.3%.  Part of this loss is due to lower hold YoY.  SJM held at 2.8% in June 2009 vs 2.5% this June.  July's hold comp is very easy though (last year was only 1.84%), so we expect to see large sequential share gains for SJM next month.
  • Mass share increased 60bps to 41.7% sequentially.

Galaxy's share fell 1% to 10.7%, driven by poor hold.

  • Starworld's market share decreased 60bps sequentially to 8.6%, due to a 60bps hold driven decline in VIP share which was somewhat offset by a gain of 30bps in Mass.
  • Junket RC share increased 20 bps sequentially to 13.3% for Starworld.

MGM's share increased by 50bps to 7.4%.

  • MGM's share gain can be attributed to a 70bps increase in VIP, which was somewhat offset by a 20bps decrease in Mass share.

 

JUNE WAS STRONG BUT... - macau table

 

JUNE WAS STRONG BUT... - macau mm

 

JUNE WAS STRONG BUT... - macau rolling