Fierce competition among casino operators

may24

Melco Resorts & Entertainment leadership has warned of the potential negative effects of an overheating competition among casino operators.

In an earnings call with analysts following the release of its first-quarter result, Melco revealed that it had already placed orders for a “small set” of smart tables on a trial basis.

However, as Geoff Davis, Melco’s chief financial officer, pointed out, the initial deployment is just part of an ongoing learning process, with full roll-out expected to take place gradually over the next year.

During the phone call, Davis also told analysts that a “fairly intense competitive environment” had started to play out, illustrating his point with the example of “freebies” being dished out to mass players.

“And if you see what’s happening on the mass floor that obviously is continuing on into our premium areas in terms of people competing for that premium mass player in improving their game in terms of product and services,” he said.

https://www.macaubusiness.com/melco-raises-concerns-over-fierce-competition-in-casino-industry/


 May24

MGM China, which has led the way in Macau when it comes to implementing smart gaming table technology, has earned the ire of its fellow concessionaires for perceived aggressive activity in the market, primarily in terms of rebates and expansion of its sales force.

Hornbuckle acknowledged this morning that such “hyberbole” around promotional spend has been “particularly aimed at us” but pointed to the company’s 29% margins in Q1 as evidence that such spend was reasonable.

“I just query that [criticism] and I challenge it,” he said. “And frankly, if we had retail to the extent that two of our competitors do, [margins] would be in the low-to-mid 30s.”

Melco Resorts Chairman and CEO Lawrence Ho may well have flamed the fire during his company’s earnings call earlier this week when he referenced what he called the “crazy behavior” of some rival operators. Ho added that he hoped the roll out of smart table technology across the market would level the playing field over the coming quarters, commenting, “I’m hoping that everybody will start being more rational and realize … it’s not healthy for the whole industry. I do think when smart tables are adopted, it will neutralize some of this crazy behavior.”

Melco President Evan Winkler added, “We have general discussions with peers at other places. I think there’s a general feeling among the group and competitors in terms of what is rational and irrational behavior.”

https://www.asgam.com/index.php/2024/05/02/hornbuckle-pushes-back-against-criticism-of-mgm-chinas-crazy-promotional-activity/

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