Not much wrong with the quarter. Yes, hold was high in Macau but we knew that. The low Singapore hold was more damaging, yet they still made our Street high estimates. 



Overall hold issues almost washed – there was a +35MM revenue benefit and an estimated $7MM negative impact on EBITDA.  Reason is the low hold was in low tax and variable rate jurisdictions (Singapore and Las Vegas) vs. high hold in Macau where the flow through is lower.  Besides, we had already modeled high hold in Macau and so on the margin, Singapore was the surprise.  Even so, Singapore almost hit our EBITDA estimate.  Here are the property details.




While slot win per day was disappointing given Sheldon’s prior comments, overall property ramp and revenues were healthy.  Even better, costs looks lower than expected.  Sheldon’s $1BN target for 2011 looks achievable to us, although we swear he had said $1.2BN at some point.

  • Low hold impacted VIP revenues by $26MM and EBITDA by roughly $23MM
  • The implied rebate rate at MBS was 1.19% - calculated by taking gross gaming revenue of $236MM less reported casino revenues of $190.8MM
    • $3.88BN * 2.18% + $538.3MM * 21.5% + $482.3MM * 7.5% = $236MM
  • It looks like fixed costs were around $77MM

Las Vegas


Las Vegas net revenues of $276MM and EBITDAR of $66MM came in $4MM and $3MM below our estimates, respectively.  Slot volume was worse, more than offset by better hold.  Table drop was better but more than offset by low hold.  Occupancy was very encouraging.

  • While LVS claimed that low hold impacted them to the tune of $30MM we think the impact is much less.  If we use 20%, which is above the table hold that LVS had in Vegas in 2008 & 2009, the impact of low hold was $26MM on revenues – almost all of which flows down to EBITDA.
  • We estimate that Venetian’s table hold was 12% (notice the low daily win per table of only $2,155) and that the property did roughly $29MM of EBITDAR
  • We estimate that Palazzo’s hold on tables was about 15% and that the property did about $35MM of EBITDAR
  • Venetian removed 228 slots sequentially while Palazzo removed 10 tables sequentially
  • Operated expenses declined 1.3% YoY to $210MM


  • Venetian net revenue of $581MM and EBITDA of $193MM came in $8MM and $9MM above our estimates, respectively. The revenue beat was entirely driven by a lower rebate rate while EBITDA was better due to lower fixed costs.
    • High VIP hold benefited revenues by $50MM and EBITDA by $26MM (given the variable commission component)
    • High Mass hold benefited revenues by $7MM and EBITDA by $4MM. 
    • We estimate the direct VIP play was 24% of total RC volume, however, total RC volume was actually down 2% YoY. We suspect this is why Venetian is going to focus more on adding junkets and that their direct play % may decrease in the future.
    • Despite high hold, the rebate rate was only 97bps
    • Implied fixed costs of $92MM
  • Sands net revenue of $302MM and EBITDAR of $81MM came in $1MM and $6.7MM above our estimates, respectively--with the delta in EBITDA driven by lower commission and lower fixed costs.
    • High VIP hold benefited revenues by $14MM and EBITDA by $5.5MM
    • We estimate the direct VIP play was 14% this quarter
    • Implied fixed costs were $48MM
    • Mass drop only had 1.4% YoY growth despite huge market growth
  • Four Seasons net of revenues of $144MM and $33MM EBITDA fell short of our estimates. Our estimates assumed lower direct play and a higher hold rate, which would have produced higher EBITDA on the same gross revenue number. We also assumed higher non-gaming revenues. It also appears that despite a higher mix of direct play, commissions were higher than we estimated.
    • High VIP hold benefited revenues by $11MM and EBITDA by $3MM
    • High Mass hold benefited revenues by $5MM and EBITDA by $3MM
    • We calculated direct VIP RC at 50% of total RC
    • Implied fixed costs were $26MM


2010 outlook



  • We’re at $275MM of net revenues and $71MM of EBITDAR for Vegas in 3Q2010. 3Q09 is a very easy comp given that table hold was only 12.2%.   
  • 4Q09 table hold was also on the low side at 17.1%, so in theory, that’s another easy comp.
  • For FY2010 we’re at $1.17BN of revenues and $312MM of EBITDAR for the Vegas operations.


  • Sands:  FY2010 $1.17BN of revenues and $292MM of EBITDA. They have tough hold comps in 2H2010--3.4% and 3.1% in 3Q and 4Q respectively.  They’ve also basically flat-lined on mass market drop, although slot handle has grown nicely and fixed costs have come down quite a bit.
  • Venetian:  FY2010 $2.25BN of revenues and $700MM of EBITDA.  We suspect that Venetian will bring in more junkets since their VIP RC growth has stagnated as they have focused on growing direct play at the expense of losing market share. 
  • FS:  FY2010 $514MM of revenues and $96MM of EBITDA.  FS has very hold easy comps in the 2H2010 of 2.3% and 2.1% in 3Q and 4Q, respectively.


  • We’re at $450MM of net revenues and $223MM of EBITDAR in 3Q2010 
  • For FY2010, we’re at $1.15BN of revenues and $565MM of EBITDAR

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