Fierce competition among casino operators (e outros problemas)
ab25
MGM also garnered the attention – some would say the ire – of its fellow concessionaires last year, when it began handing out free snacks and ice creams on its main gaming floor. The practice was eventually limited amid concerns over the potential negative impact on local SMEs, but all reports indicate it was extremely successful in attracting new visitors to experience what MGM’s properties have to offer.
It was also the best example yet of the ultra-competitive environment of today’s Macau, and, for a while at least, it saw some rare shots publicly fired between concessionaires.
A year ago this month, Melco Resorts Chairman and CEO Lawrence Ho highlighted what he described as the “crazy behavior” of some rival operators when it came to promotional activity, adding, “I’m hoping that everybody will start being more rational and realize … it’s not healthy for the whole industry.”
MGM Resorts President and CEO Bill Hornbuckle later acknowledged the comments were likely aimed at MGM but rejected the notion, citing his company’s healthy Macau margins as proof.
Most concessionaires have since observed a more stable promotional environment, shifting their attention instead to the combined MOP$130.4 billion (US$16.3 billion) they are committed to spend by the end of 2032 on non-gaming initiatives as per their 10-year concession contracts.
https://asgam.com/2025/04/29/the-changing-face-of-macau/
Dec24
The adoption of smart gaming tables across the market and the launch of new high-end hotel suite products will likely mean much greater competition between concessionaires in the Macau market, according to a leading MGM China executive.
Vivian Chan, the company’s SVP Finance and Acting CFO, detailed the company’s short-term expectations during a session at the Bank of America Leveraged Finance Conference on Wednesday morning (Asia time), having seen MGM report multiple quarterly GGR and EBITDA records throughout 2024. MGM China has also seen its market share grow from 9.5% in 2019 to as high as 16% this year, aided by the addition of 198 new gaming tables under its 10-year concession through 2032 and the early adoption of smart gaming table technology.
Asked whether the company could maintain its momentum into 2025, Chan admitted that rival concessionaires would expect to see their gaming floors performing better in the months ahead given that all are in the process of rolling out smart tables, but added, “Another factor is the competitors are finishing the construction of their suite conversion, for Sands China and for Galaxy as well.
“Competition from next year will be more intense given there will be more new product offerings in the market, although for sure we will have our own secret weapons to defend that. But yes, it will be a factor for the RFID tables because they are catching up [on rollout].”
Although Chan admitted the 198 new gaming tables had given MGM China a boost, but also noted its knowledge of the Chinese customer was crucial.
“We know what the Chinese customer wants so in terms of product offerings, the property, we tailor-make it to the taste of the existing or the new Chinese customer,” she said. “That’s why our market share has gone from 9.5% in 2019 to 15% and above now. We have covered a lot, and a lot of our competitors are also jealous of us.
“In terms of the six gaming operators, MGM has recovered better than the market. Macau’s recovery this year, compared to 2019, is around 77% but MGM China, we are above 100% compared to pre-COVID levels.”
https://asgam.com/2024/12/04/after-record-breaking-year-mgm-china-expecting-increased-macau-competition-in-2025/
nov24
Macau’s gaming operators have broadly described the city’s competitive promo environment as improving, even as competition between the six concessionaires remains rife.
The issue has been a common point of discussion during recent earnings calls for the September 2024 quarter, with most operators noting that competition has stabilized while citing increased efforts to keep player reinvestment in check.
Earlier this week, Melco Resorts Chairman and CEO Lawrence Ho said he believed Macau was now past “peak promotional intensity”, adding, “For the healthy development of the entire market going forward, I hope that all the operators continue to do that because at Melco, our primary focus has always been on EBITDA. Hopefully, with the promotional environment stabilizing, we’ll continue to improve on our EBITDA margin model.”
Melco has been among the main critics of Macau’s “tough comps” this year, calling out in a previous earnings call the “crazy behavior” of some rival operators. That comment was seen by MGM Resorts CEO and President Bill Hornbuckle as a direct shot at his company’s Macau subsidiary, MGM China, which has seen its market share shoot up post-COVID on the back of the 198 additional tables it was granted when new 10-year concessions came into effect on 1 January 2023, as well as its early adoption of smart gaming tables. The Macau government was also forced to direct many concessionaires to rein in free drink and snack giveaways for fear it was negatively impacting the city’s small businesses.
Asked the same question about the current promotional environment in Macau during Wynn Resorts’ 3Q24 earnings call this week, CEO Craig Billings said it was “stable to slightly better … but it’s still very competitive.
“While the competitive environment in Macau is clearly intense, we continue to focus on maximizing EBITDA rather than purely market share,” he added.
Sands China President and CEO Grant Chum told analysts in late October that his company was carefully managing its player reinvestments at a time when it is also facing significant disruption from major upgrade works at its old Sheraton Grand hotel at The Londoner Macao.
“We’re really back to our core strategy, which is we compete on the basis of our products and the content that we bring despite the fact that, obviously in the third quarter, our disruption actually increased.
“We stick to our core strategy and we had a very strong quarter in how we managed customer reinvestments and still maintained market share relative to the second quarter despite rising disruption during the quarter.”
Melco’s President and Director Evan Winkler suggested this week that it is still too early to tell if Macau’s promo environment is on a glide path down but reiterated the feelings of others in the need to manage spending.
“From our standpoint, we certainly aren’t looking at any elevated promotional spending, we are looking at, through our new player launch, how do we best sort of retain our top players, how do we create an aspirational path for those mid-levels and how do we spend dollars effectively on bringing new people into the system?” he said, referencing the company’s recently overhauled loyalty program,
“So, I think it’s more of an allocation issue against the existing pool as we slowly bring [spend] down, but no major changes in the overall level.”
https://asgam.com/2024/11/07/macau-operators-insist-competitive-promo-environment-still-tough-but-improving/
nove24
Wynn Macau reported weak non-gaming revenues in its 3Q24 results, reflecting persistent headwinds in key segments such as hospitality and retail, say analysts.
According to Deutsche Bank’s analysis of the company’s quarterly performance, non-casino revenue fell by 8 percent year-on-year, significantly offsetting the gains from the casino segment.
The decline in non-gaming revenue was primarily driven by weaker performance in high-flow-through segments, including hotel and retail, which continue to face pressure. Meanwhile, while Wynn Macau’s market share dipped slightly year-on-year, it showed stability on a quarter-on-quarter basis.
Looking ahead, Deutsche Bank analysts noted that while Wynn’s performance in the gaming segment remained relatively stable, the non-gaming outlook remains less promising.
‘Net-net, the 3Q24 was largely uneventful from a gaming perspective in Macau, with Wynn Macau market share remaining stable on a quarter-on-quarter basis, but falling ~70 basis points year-on-year,’ the note detailed.
As competition in the Macau gaming market intensifies, analysts expect Wynn Macau’s market share to stay largely unchanged until new amenities come online in 2025.
https://agbrief.com/news/macau/05/11/2024/wynn-macau-faces-weaker-non-gaming-revenue-amid-stiff-competition/?utm_source=Asia+Gaming+Brief&utm_campaign=71b49f35b5-AGB%3A+%2302019+Wednesday%2C+06th+November%2C+2024&utm_medium=email&utm_term=0_51950b5d21-71b49f35b5-%5BLIST_EMAIL_ID%5D&ct=t%28AGB%3A+%2302019+Wednesday%2C+06th+November%2C+2024%29&goal=0_51950b5d21-71b49f35b5-%5BLIST_EMAIL_ID%5D&mc_cid=71b49f35b5&mc_eid=31e20475e6
out24
A series of rejuvenation projects underway at MGM Macau are aimed at ensuring that MGM China’s original Macau resort dominates the peninsula gaming market, according to President and Executive Director Kenneth Feng.
Speaking during parent company MGM Resorts’ 3Q24 earnings call on Thursday, Feng outlined what he described as some “very meaningful projects” MGM China had started on during the September quarter, including a refreshment of the property’s gaming floor, a revamped events center and some new F&B outlets.
“The goal of these developments is really to make sure the products reflect the trend of the customers,” he said. “All of these projects we expect to be done by the middle of next year and once done we will continue to lead the peninsula Macau market.”
Also in the works is a “suite conversion project” at MGM Cotai through which the company is converting 160 standard rooms into 60 suites, increasing the property’s suite offering by around 25%.
According to Feng, “MGM Cotai is always trying to become a destination of this region. When we deliver more new products into the market, MGM Cotai will benefit.”
MGM China on Thursday reported record revenues and EBITDAR for any third quarter in the company’s history, continuing a golden run since Macau’s borders reopened to the world in January 2023.
The CEO and President of MGM Resorts, Bill Hornbuckle, explained during the earnings call that MGM China had also booked a 20% increase in gaming buy-ins during the recent Golden Week holiday, which ran from 1 to 7 October, when compared to the same period in 2019.
https://asgam.com/2024/10/31/mgm-eyes-macau-peninsular-domination-via-latest-ir-rejuvenation-projects/Macau gaming operators have acknowledged macroeconomic challenges, including a consumption slowdown impacting tenant sales at their shopping malls. However, they maintain that gaming demand has remained resilient across all segments, with steady bet sizes and a continued increase in player count.
This assessment was shared by investment bank Goldman Sachs following an investor tour in Macau on September 13th, during which the team visited various casinos and met with senior management from the operators.
Despite the positive outlook for gaming demand, some operators have noted that ultra-high rollers have become “more cautious” with their spending.
Goldman Sachs also highlights that casino operators in Macau expect minimal impact from the government’s recent crackdown on unlicensed money exchanges, which is not a new issue. Despite stricter measures, gross gaming revenue (GGR) has remained resilient, tracking at 76 to 81 percent of 2019 levels.
“Continued regulatory noise, GGR [gross gaming revenue] year-on-year deceleration and weaker sentiment of China consumers are not helping” investor attitudes regarding the Macau casino industry, says a note from Morgan Stanley Asia Ltd.
“Investor interest is subdued, mainly because of stock performance and noise around regulations and the recent clampdown on money exchanges,” said the Friday memo from Praveen Chaudhury and Gareth Leung, referring to unauthorised money exchange touts lingering in or around casinos.
Apesar de as receitas do jogo estarem a crescer desde o início do ano, nos primeiros seis meses as acções da maioria das concessionárias cotadas na Bolsa de Hong Kong desvalorizaram. As excepções à tendência de queda, foram a MGM China e a SJM, de acordo com as contas feitas pelo HM.
Como tem acontecido nos últimos anos, as acções Galaxy são as mais valiosas entre as concessionárias. No início do ano, os títulos eram negociados ao preço de 44,1 dólares de Hong Kong por acção, mas até ao final de Junho sofreram uma redução para 36,4 dólares de Hong Kong. A mudança significa uma desvalorização de 17,5 por cento no espaço de seis meses.
O ano até começou bem para a concessionária liderada por Francis Lui, e a 16 de Fevereiro as acções chegaram a ser negociados por 45,3 dólares por unidade. Porém, a partir dessa altura a desvalorização passou a ser a regra.
Um percurso muito semelhante foi trilhado pela Sands China, a segunda concessionária mais valiosa, de acordo o mercado bolsista de Hong Kong. No dia de abertura da bolsa, a 2 de Janeiro, as acções da Sands valiam 23,8 dólares de Hong Kong. Em 14 de Fevereiro, a avaliação atinge o pico com uma cotação de 24,5 dólares por acção. Contudo, até ao final de Junho as acções foram perdendo valor até chegarem aos 16,3 dólares de Hong Kong. Esta foi uma redução de 31,5 por cento, quando se tem em conta o início de Janeiro.
As outras concessionárias que também desvalorizaram foram a Wynn Macau e a Melco Resorts, medida através da empresa Melco International Development. No caso da Wynn Macau, no final do primeiro dia do mercado, cada acção custava 6,56 dólares de Hong Kong. A empresa até conseguiu ir valorizando, e a 17 de Maio, as acções estavam avaliadas em 8,3 dólares. Todavia, no final de Junho tinham caído para 6,4 dólares de Hong Kong, uma redução de 2,4 por cento.
Em relação à Melco, as acções começaram o ano avaliadas em 5,6 dólares. A 17 de Maio atingem o pico do valor com 6,7 dólares por acção. Contudo, no final de Junho o preço tinha descido para 5,3 dólares de Hong Kong. Esta flutuação representa uma quebra do valor de 5,9 por cento.
https://hojemacau.com.mo/2024/07/16/concessionarias-accoes-a-perderem-valor-desde-janeiro/
jul24
Overall, the group notes that its top pics for the next three to six months are Melco, Wynn and Galaxy, while going into 2025, the analysts prefer Sands China and Las Vegas Sands.
Despite having taken advantage of its increased table numbers and its smart tables, MGM China is predicted to ‘lose share’ starting already in the second quarter, also as other operators incorporate smart table technology.
Estimates are for MGM’s market share to drop to ‘mid 15s percent by the end of this year and into the high 14 percent range in 2025’.
Another market share lower has been Wynn Macau, despite a slight recovery in the first quarter to ‘over 14 percent’. Umansky estimates this will ‘stabilize in the mid 13 percent range this year’.
This is in part due to the loss of the VIP business and its shift towards more premium mass. The analyst notes that ‘Wynn has no new product offering and low capacity to attract base mass and other operators increase competitiveness around premium mass which lead to continued headwind for Wynn in its ability to gain share’.
For Galaxy, which also lost market share in the first quarter due to the decline in VIP, ‘where it was the largest operator’, and softness in base mass (also where it lead due to scale), the group gained ‘significant share in Q2 and we expect share to continue to rise during 2024 and into 2025.
Market share is estimated to ‘rise over 19 percent in 2025’ due to a recovery in base mass.
Looking at Sands China, Umansky is estimating that its GGR market share will also rise to ‘over 25 percent in 2025’, from 24.2 percent in the first quarter of this year. This is aided by a predicted strong contribution from the Londoner and an increase in base mass – which it’s benefitted by its scale.
Looking to Melco, the forecast is for some market share gain in the second half of the year, ‘stabilizing in the high 14s percent range in 2025’. The group is now focused on ‘rekindling its premium mass strength in City of Dreams and ramping up Studio City driven by the new Phase 2 product offering’.
At the back of the pack is legacy Macau gaming operator SJM. Currently expectations are for continued market share gains this year, rising from 12.5 percent in the first quarter to 12.9 percent by 4Q24. But the analyst notes that ‘SJM is likely to lose share in 2025 due to the mid 12s percent range’.
‘The company has become the smallest operator in terms of revenue and remains the smallest operator in terms of EBITDA. The key focus on SJM is for it to hastily improve the ramp up of its new Cotai property – Grand Lisboa Palace. However, we do not forecast a rapid turnaround story for SJM,’ indicates Umansky.
https://agbrief.com/news/macau/23/07/2024/market-share-of-macau-operators-to-continue-to-shift-throughout-fy24-25-analyst/?utm_source=Asia%20Gaming%20Brief&utm_campaign=596ed15229-AGB%3A%20%2301947%20Tuesday%2C%2023rd%20July%2C%202024&utm_medium=email&utm_term=0_51950b5d21-596ed15229-%5BLIST_EMAIL_ID%5D&ct=t%28AGB%3A%20%2301947%20Tuesday%2C%2023rd%20July%2C%202024%29&goal=0_51950b5d21-596ed15229-%5BLIST_EMAIL_ID%5D&mc_cid=596ed15229&mc_eid=31e20475e6
jul24
Despite Gross Gaming Revenue (GGR) in Macau slightly surpassing forecasts for the second quarter of 2024, Las Vegas Sands (LVS) is expected to face challenges in market share and non-gaming contributions, brokerage Deutsche Bank noted.
These factors are projected to impact the company’s property EBITDAR for the quarter with LVS revising its Macau property EBITDAR estimate to $600 million, or $605 million including ferries and other operations, from the previous $621 million.
The brokerage also expects that given comparable developments and the cost escalation associated with these developments over the last several years, the construction budget for the Marina Bay Sands (MBS) new tower in Singapore will likely be above $4 billion.
Still, Deutsche Bank upped its EBITDAR forecast for MBS to $488 million from $454 million.
https://agbrief.com/news/macau/09/07/2024/las-vegas-sands-facing-lower-macau-market-share-in-2q24-deutsche-bank/?utm_source=Asia+Gaming+Brief&utm_campaign=95302f86a0-AGB%3A+%2301938+Wednesday%2C+10th+July%2C+2024&utm_medium=email&utm_term=0_51950b5d21-95302f86a0-%5BLIST_EMAIL_ID%5D&ct=t%28AGB%3A+%2301938+Wednesday%2C+10th+July%2C+2024%29&goal=0_51950b5d21-95302f86a0-%5BLIST_EMAIL_ID%5D&mc_cid=95302f86a0&mc_eid=31e20475e6
jun24
The city’s six gaming operators can collaborate as a united front to promote Macau as a world-class travel destination within the international community, stated DeVonne Iao, senior vice president and chief marketing officer of Sands China.
“When we are outside of Macau, we’re not competitors. All six of us, the operators, are allies promoting Macau as a destination,” she stated.
She made the remarks during the final panel on Thursday at the Asian IR Summit, which was part of the conference programme for the Global Gaming Expo Asia (G2E Asia) 2024 and the Asian IR Expo. Both shows, lasting for three days, concluded on Thursday.
https://www.macaubusiness.com/we-are-allies-rather-than-rivals-gaming-op-exec/
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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