Specialist
Former Senior Manager at Suncity Group Holdings Ltd
Agenda
- Gambling and gaming industry in Macau – 2020 challenge, coronavirus pandemic impact, performance forecast during China’s national day and industry outlook
- Gambling and gaming industry in Macau – regulation policies, cooperation models between casinos and junket operators, casino licence bidding and barriers to junket licence acquisition
- SJM (HKG: 1928), Galaxy Entertainment (HKG: 0027), Melco Resorts & Entertainment (NASDAQ: MLCO), Wynn Resorts (NASDAQ: WYNN), MGM Resorts International (NYSE: MGM) and Sands China (HKG: 0880) – revenue trends of VIP, premium mass and mass customer segments
Questions
1.
What were some of the developments in Macau’s gambling and gaming industry in the past 2-3 years that you think are worth our attention? What are the topics of most concern in the industry? What trends do you see for the industry going forward?
2.
International travel is restricted because of the coronavirus pandemic this year. Has this posed an obstacle for casino operators in bringing customers overseas? Is this good news for the local gambling and gaming industry in Macau?
3.
According to statistics, the gross revenue of Macau’s gambling and gaming industry has plunged since February 2020. The revenue realised in February this year slumped by 87% from MOP 25.4bn in the same month last year, and the revenue realised in the months that followed was all notably lower than the January level. In September, a total of MOP 2.2bn gaming revenue was generated, down by 90% YoY. Can you comment on the performance of Macau’s gambling and gaming industry in the first three quarters of the year? To what extent have things improved since authorities resumed granting independent travel visas to residents in some mainland regions in August?
4.
Did there emerge any new models in the industry between February and August this year? Are the models sustainable?
5.
According to some reports, the aim of the Macau government at the moment is not to bring the revenue of the industry back to its previous level. Instead, its focus in H2 is preparing for next year’s economic recovery. What favourable policies and subsidy schemes has the Macau government launched to drive the economic recovery? What have companies in the industry done to prepare themselves for next year’s recovery?
6.
The gross gaming revenue generated by the casinos in Macau during the National Day Golden Week Holiday in 2019 stood at MOP 8.1bn, which was already down from the level in 2018. The industry reported a 20% fall in revenue from VIP play in 2019. How many visitors did the casinos in Macau receive and how much gaming revenue did they realise during this year’s National Day Golden Week Holiday? Can you comment on the performance of Macau’s big six casino operators, namely SJM, Wynn Resorts, MGM Resorts International (MGM), Galaxy Entertainment, Melco Resorts & Entertainment (Melco) and Sands China?
7.
How much of casinos’ revenue comes from VIP rooms this year and how much from premium mass players and mass players? How does the revenue structure differ from before the outbreak of the pandemic?
8.
During the pandemic this year, casinos introduced new operations to better serve the only customers they have. How will this affect the VIP, premium mass and mass customer segments, including their future trends and landscape? What are the positives and negatives involved?
9.
Let’s put aside the impact of the pandemic and analyse the overall development of Macau’s gambling and gaming industry. After its return, Macau opened this industry and approved three casino licences in 2002. Later, due to some reasons, a transfer was made once, so there are six casino licences now, including three main licences and three sublicences. The government of Macau is trying to start a new schedule of bidding. The existing six casino licences are expected to be bidden in February 2022 again. What is the government’s attitude toward it? What should we pay attention to?
10.
Which of the six licence holders do you think will keep the casino licence in their hand in the new round of bidding? Who do you think are more likely to get the casino licence?
11.
People have always been focusing on casino licences. In Macau, junkets are also required to be with licences. What is the competitive landscape of the junket segment now? What trends have appeared in the industry over the past few years? What are the barriers to entry? What is the current number of junket licences? How much does it change every year?
12.
How do junkets work with the casino in Macau? Has the cooperation model changed over the past few years? Which casinos are working closely with these junkets now?
13.
How do junkets acquire customers? Can you review the persona changes of VIP and premium mass customers over the past few years? What is the average wager of premium mass customers?
14.
The pandemic does not seem to have a big impact on the investment of casinos in Macau. They seem to care more about the long-term development and they are preparing according to their plan. Crystal Pavilion Hotel (水晶莲宫酒店) has already completed some work in the plan, and the Grand Lisboa Palace was completed last year and will be opened this year. What does the industry think about its opening? Do you think it will open as expected this year? How much will these projects change the tourism, gambling and gaming landscape in Macau?
15.
Given the current performance and the new project planning of the six major casinos, which are you more optimistic about?
Gain access to Premium Content
Submit your details to access up to 5 Forum Transcripts or to request a complimentary one week trial.
The information, material and content contained in this transcript (“Content”) is for information purposes only and does not constitute advice of any type or a trade recommendation and should not form the basis of any investment decision.This transcript has been edited by Third Bridge for ease of reading. Third Bridge Group Limited and its affiliates (together “Third Bridge”) make no representation and accept no liability for the Contentor for any errors, omissions or inaccuracies in respect of it. The views of the specialist expressed in the Content are those of the specialist and they are not endorsed by, nor do they represent the opinion of, Third Bridge. Third Bridge reserves all copyright, intellectual and other property rights in the Content. Any modification, reformatting, copying, displaying, distributing, transmitting, publishing, licensing, creating derivative works from, transferring or selling any Content is strictly prohibited
