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only1choice
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June 8th, 2012 at 3:40:14 AM permalink
Could it finally really be slowing down?


http://www.businessweek.com/articles/2012-06-05/macau-feels-the-pinch-of-chinas-slowdown
IF YOU PLAY "PLAY TO WIN"
pacomartin
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July 4th, 2012 at 4:20:11 AM permalink
Quote: only1choice

Could it finally really be slowing down?



The record revenue set in October 2011 of 26,851 MOP million has held up for the 9th month as June revenue was posted at 23,334 .

The first 6 months of 2012 is still +19.8% up over the first 6 months of 2011.

You really can't call that slow growth, but with 2011 +42.2% over 2010, and 2010 +57.8% over 2009 it just seems slow by comparison.
FleaStiff
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July 18th, 2012 at 11:39:53 PM permalink
Six triad members armed with sticks beat major Whale-Broker inside restaurant at his own casino.

Some disadvantages of the money being out of control is that so are the people.

NYTimes.
rxwine
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July 19th, 2012 at 12:38:35 AM permalink
Quote:

when the city’s casinos were still under the four-decade monopoly of the gambling magnate Stanley Ho — triad murders, bombings and other attacks were so common that a senior police official once tried to reassure tourists by announcing that Macau had “professional killers who don’t miss their targets.”



Ah yes, reassuring.

The New Yorker recently had a long piece that didn't make Macau sound too distant from that era.
There's no secret. Just know what you're talking about before you open your mouth.
pacomartin
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July 19th, 2012 at 1:53:57 AM permalink
Quote: rxwine

Ah yes, reassuring.

The New Yorker recently had a long piece that didn't make Macau sound too distant from that era.



The comment about “professional killers who don’t miss their targets” is a little reassuring. My greatest fear in Tijuana was not being shot because I was an American, it was wondering into a nice little place which was frequented by common targets of the cartels. Unfortunately the cartels sometimes put out a bounty, and some amateur would walk into a place and spray it with bullets. Along with the target, they would take out the waitress, the short order cook, and possibly some American tourist looking for a good torta.
pacomartin
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July 19th, 2012 at 2:34:22 AM permalink
The high speed rail link from Beijing is supposed to be completed by November of this year. Even though the trip is roughly 1400 miles, the trains will move in excess of 200 mph. In the USA such a trip by air would take less than 3 hours in the jet, but on top of that you would add in time for transport from the airports, and security time, plus more waiting time. The train time will end up in the same general range and cost less.

Macau revenue should begin ratcheting up as soon as next month when the first 500 miles of train are added to the mix.

Beijing–Shijiazhuang 281 km operational November 2012
Shijiazhuang–Wuhan 838 km operational August 2012
Wuhan–Guangzhou 968 km completed
Guangzhou–Hong Kong 116 km completed

At some point the majority of people in China will be able to get to Macau in 8 hours or less by rail, with nearly everyone being able to get there in 16 hours.
pacomartin
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August 1st, 2012 at 4:22:25 AM permalink
Macau revenue growth is officially no longer "out of control". Today's announcement is that month over month growth in revenue is a mere 1.5%.
Median increase has been 42.4% since January 2010.

There will probably be another shock wave in the market today and tomorrow.

Jul-12 1.5%
Jun-12 12.2%
May-12 7.3%
Apr-12 21.9%
Mar-12 24.4%
Feb-12 22.3%
Jan-12 34.8%
Dec-11 25.0%
Nov-11 32.9%
Oct-11 42.3%
Sep-11 38.8%
Aug-11 57.0%
Jul-11 48.4%
Jun-11 52.4%
May-11 42.4%
Apr-11 44.6%
Mar-11 48.0%
Feb-11 47.7%
Jan-11 33.2%
Dec-10 66.4%
Nov-10 42.1%
Oct-10 49.8%
Sep-10 39.8%
Aug-10 40.0%
Jul-10 70.4%
Jun-10 65.0%
May-10 94.1%
Apr-10 70.1%
Mar-10 42.4%
Feb-10 69.9%
Jan-10 62.5%
-
FleaStiff
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August 1st, 2012 at 6:29:27 AM permalink
The growth rate has been "agreed to"? That sounds like even more criminal control than Vegas ever had.
pacomartin
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September 1st, 2012 at 8:58:27 PM permalink
When the numbers are released next week, Macau may have it's first negative growth for monthly year over year since they opened up to foreign casinos. Last month Macau grew a mere 1.5% from the same month the previous year.

No reports of any slowdown in construction.

Website Macau Revenue
pacomartin
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September 3rd, 2012 at 10:35:48 AM permalink
Growth rate remained positive, but it has been slow for the last four months (relative to 20%-40% of before).

Tomorrow, we will see if the stock price reacted.
Aug-12 5.5%
Jul-12 1.5%
Jun-12 12.2%
May-12 7.3%
Paradigm
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September 3rd, 2012 at 11:04:21 AM permalink
Paco, I always enjoy your Macau updates so thank you for providing them!

What annual Macau revenue growth rate do you think we will see over the next 3-5 years?

Your high speed train updates seem like they would be a near term catalyst to increase visitation from Bejing and the north, but maybe all the folks that want to come to Macau from those regions are already flying. Do you think the train will increase visitation or simply give those already coming another mode to get to Macau?
pacomartin
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September 3rd, 2012 at 4:23:16 PM permalink
Quote: Paradigm

Your high speed train updates seem like they would be a near term catalyst to increase visitation from Bejing and the north, but maybe all the folks that want to come to Macau from those regions are already flying. Do you think the train will increase visitation or simply give those already coming another mode to get to Macau?



I don't think so. While Beijing airport is one of the busiest in the world (temporarily 2nd place behind Atlanta), the amount of air travel in Asia is still far far below what it is in North America and Europe.

Japanese are far and away the citizens that are most likely to ride a train. An incredible 62 million train journeys are taken on an average day (out of a population of 126 million). But the average train ride is less than 7 miles.

Chinese are the world leaders in long distance train travel. The average trip is 322 miles. Compare that with 72 miles in India, and 25 miles in Britain or Germany.

I don't think the Chinese have nearly the infrastructure to fly people. Plus remember that the train line will pass by hundreds of millions of people before they get to Beijing. Regional airports are pretty small in China.

A similar question came up when China announced that they could build a train to Europe that could get you from Beijing to London (5000 air miles) in 48 hours. Since such a project would be the largest single infrastructure project in the history of human civilization, many people wondered why they wouldn't just purchase a lot of jumbo jets. After all 5000 miles is about the distance from Los Angeles to London or Los Angeles to Tokyo. There are multiple air routes of 5000 miles or more that are very busy.

The answer seems to be that China doesn't think that it can build the air infrastructure that exists in the USA to move people around at relatively low cost. It is still worth it to spend all day on a train.
Paradigm
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September 3rd, 2012 at 5:45:41 PM permalink
I think I like that answer, you are saying that you believe the train will open up Macau to more visitors because air travel is not as widespread in Asia, correct?

You are a wealth of information......there needs to be a way to "folllow" (like you can on Twitter) members in the Forum :-).....it is a good way to get through a lot of the drivel posted and stick to posts from Members that actually add something useful/informative to the discussion.
HKrandom
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September 6th, 2012 at 2:52:29 AM permalink
I think reaching cities without an airport is very important. China has 305 cities with a population above 1,000,000 and nowhere near that number of airports so having a high speed train going directly to Macau would add a lot of convenience for people living in somewhat large cities that don't have access to a great infrastructure.
pacomartin
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September 6th, 2012 at 4:06:27 AM permalink
Quote: HKrandom

I think reaching cities without an airport is very important. China has 305 cities with a population above 1,000,000 and nowhere near that number of airports so having a high speed train going directly to Macau would add a lot of convenience for people living in somewhat large cities that don't have access to a great infrastructure.



Actually the train will go to Shenzhen (a sub-provincial urban area of 10 million) just immediately north of Hong Kong. The trains going directly to Hong Kong and Macau will be a few years yet. But if you can get to Shenzhen in 8 hours (from Beijing) or under from other cities, you can get to Macau by adding a 2 or 3 hours (i.e. within a travel day).

A third of Americans lives in rural places or urban places of 1/2 million or less. Allegiant tries to target communities of less than 1/2 million to bring them to Vegas. But China has more than 4 times the population of USA and far less air infrastructure.

A total of 305 cities is pretty impressive. USA has 9 cities over a million, but Detroit used to have almost 2 million people but is now just over 700K. San Jose will cross a million in a few years. Since city limits vary greatly in area, a more telling metric may be thatUSA has 51 metropolitan areas over a million, which contain slightly less than half the population.
Paradigm
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September 6th, 2012 at 7:57:16 AM permalink
Paco, I guess I misinterpreted your post on the November 2012 completion of the train routes. I thought that as of November 2012, the final piece of the rail line from Bejing to Macau would be completed and that currently the completed train routes don't extend north from Macau all the way to Bejing, but will later this year. Did I miss something in what you were trying to explain?
pacomartin
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September 6th, 2012 at 8:51:48 AM permalink
Quote: Paradigm

Paco, I guess I misinterpreted your post on the November 2012 completion of the train routes. I thought that as of November 2012, the final piece of the rail line from Bejing to Macau would be completed and that currently the completed train routes don't extend north from Macau all the way to Bejing, but will later this year. Did I miss something in what you were trying to explain?



By the end of 2012 you will be able to sit in one seat and go the 1452.5 miles from Beijing to Shenzen at over 200 mph, but building the rail link for the last 22.5 miles through urban Hong Kong will take another 3 years. Then you will be able to get directly on the ferry to Macau.


They may also build a rail link directly to Macau, but it has not been decided.

It's almost the equivalent of saying that you can fly to JFK, but you can't get an express rail link to downtown Manhattan. Public transportation takes over an hour, involves three different trains, and costs $13.50

But in the case of Macau there is no underwater tunnel or bridge link, you must get on one of hundreds of ferries.
pacomartin
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October 28th, 2012 at 3:31:09 PM permalink
A critical 521 mile link of high speed rail (maximum speed 217 mph) in the center of China opened on 28 September 2012. The final link to Beijing (175 miles) with a maximum speed of 236 mph will open later this year putting Macau within an easy day's trip from Beijing for Chinese New Year's celebration.

October's numbers should be released by Friday.

34.8% Jan
22.3% Feb
24.4% Mar
21.9% Apr
7.3% May
12.2% Jun
1.5% Jul
5.5% Aug
12.3% Sept
ewjones080
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October 28th, 2012 at 3:39:01 PM permalink
Quote: EvenBob

Asian's are frequently syndicate bettors, they're not betting their own money. A group gets together a lot of money and sends the best player to make the bets, and trusted overseer's to watch and make sure everything is kosher. They do it in the States too, all the time.



Absolutely true. There's a family that comes in where I work. We call them the Asian Invasion, or simply "The Crew".. cause they come in around midnight after closing their restaurant.
pacomartin
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November 3rd, 2012 at 10:33:24 AM permalink
Quote: pacomartin

October's numbers should be released by Friday.

34.8% Jan
22.3% Feb
24.4% Mar
21.9% Apr
7.3% May
12.2% Jun
1.5% Jul
5.5% Aug
12.3% Sept



+3.2% October

Despite the small percentage it was enough to set a new monthly record of 27.7 billion patacas ($3.4 billion). The old record was set 12 months ago.
AcesAndEights
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November 4th, 2012 at 12:00:13 PM permalink
I dumped my shares of WYNN at $144.00 on 10/15, having booked a small win (about 2%, but I was just happy to not take a loss). Of course it promptly jumped 5% and is now trading in the $120s >:o

I'm still holding on to MGM and LVS, hoping to reclaim some of my losses. More than 10% in the hole right now. After I eventually dump these stocks, never going to try to be "smart" again, just low-cost ETFs, buy and forget.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
pacomartin
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November 25th, 2012 at 7:16:02 PM permalink
As of today the Beijing-Guangzhou train construction is complete, test runs are being made and passenger service begins sometimes next month. The entire 1428 mile trip will take 8 hours, instead of the previous 20 hour trip a few years ago.

Guangzhou is still 70 miles from Macau, but even including this last transfer, Macau will now be considerably more convenient to hundreds of millions of people.



Keep in mind that the trains from frozen Manchuria are now beginning to operate into Beijing. So some of those people will be able to get to Macau by train as well.
pacomartin
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December 4th, 2012 at 5:03:34 AM permalink
Macau just reported it's seventh straight month of reasonable improvements in revenue.
May +7.3%
Jun +12.2%
Jul +1.5%
Aug +5.5%
Sept +12.3%
Oct +3.2%
Nov +7.9%

Those kind of revenue increases would be greeted with shouts of joy in the USA, but they seem so small compared to what we were used to in Macau.
AcesAndEights
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December 4th, 2012 at 10:41:30 AM permalink
China Tightens Reins on Macau - Police in Gambling Enclave, Mainland Detain Junket Operators; First Sign of a Corruption Crackdown
Wonder if this will have a substantial effect on the casinos' bottom lines.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
pacomartin
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December 25th, 2012 at 11:47:54 PM permalink
Quote: pacomartin

As of today the Beijing-Guangzhou train construction is complete, test runs are being made and passenger service begins sometimes next month. The entire 1428 mile trip will take 8 hours, instead of the previous 20 hour trip a few years ago.
Guangzhou is still 70 miles from Macau, but even including this last transfer, Macau will now be considerably more convenient to hundreds of millions of people.



The completed rail line has begun commercial service on Wednesday when a train departed from Beijing at 9 a.m. for Guangzhou. Another train left Guangzhou for Beijing an hour later. Trains on this high-speed line will initially run at 300 kph (186 mph) with a total travel time of about eight hours.
AcesAndEights
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January 2nd, 2013 at 10:27:16 AM permalink
Holy $h!#!!

http://www.bloomberg.com/news/2013-01-02/las-vegas-sands-wynn-rise-after-macau-gambling-gains-20-.html

Quote:

Casino revenue in the Chinese city jumped to 28.2 billion patacas ($3.5 billion) in December, trumping a record 27.7 billion patacas in October. Full-year revenue increased 14 percent to 304 billion patacas, also a record, from 268 billion patacas in 2011, according to data from Macau’s Gaming Inspection and Coordination Bureau.



On that news, LVS, MGM, and WYNN are up around 5-6% on the day. I already dumped WYNN at $114 and MGM at $11.88. Not kicking myself, I managed to get out without a loss and I'm swearing off speculating on individual stocks from now on (unless I actually put in the time and effort to be smart about it).

I'm still holding LVS and would be looking at about a $325 loss right now, however that doesn't account for the special dividend a couple weeks ago, which would more than wipe out that loss. Thinking about selling today...
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
UCivan
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January 2nd, 2013 at 11:54:49 AM permalink
Before the "debt ceiling negotiation" in Congress and House, stocks will drop and then these guys will pass it and the stocks will go back up. This repeats what we saw in fiscal cliff. Time to make some serious money.
pacomartin
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January 4th, 2013 at 1:17:23 PM permalink
Quote: AcesAndEights

Holy $h!#!!

Quote:

Casino revenue in the Chinese city jumped to 28.2 billion patacas ($3.5 billion) in December, trumping a record 27.7 billion patacas in October. Full-year revenue increased 14 percent to 304 billion patacas, also a record, from 268 billion patacas in 2011, according to data from Macau’s Gaming Inspection and Coordination Bureau.



Just looking at the two year growth, we see that December 2010 to December 2011 was the lowest increase for all of 2011. So naturally it was much easier to get a +19.6% increase from Dec 2011 to Dec 2012.

Mind you, it was still an all time record breaking month. But it is important not to be irrationally exuberant. The growth factors could easily return to single digits by next month.

On the other hand a 20 hour train trip was just reduced to 8 hours. That makes it much easier to come from Beijing for a 3 day break than before. If you sleep on a train you still have marathon 24 hours in Macau.

It's not just Beijing, but there are hundreds of millions of people within short commute along the rail line. They can all get to Macau in significantly less time.
UCivan
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January 4th, 2013 at 1:27:50 PM permalink
AND the Chinese New Year is coming. I wonder if anyone has the picture of the long line for going through the Zhuhai-Macao border last year. I heard it was several miles long.
AcesAndEights
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January 4th, 2013 at 1:50:13 PM permalink
Quote: pacomartin

Quote: AcesAndEights

Holy $h!#!!

Quote:

Casino revenue in the Chinese city jumped to 28.2 billion patacas ($3.5 billion) in December, trumping a record 27.7 billion patacas in October. Full-year revenue increased 14 percent to 304 billion patacas, also a record, from 268 billion patacas in 2011, according to data from Macau’s Gaming Inspection and Coordination Bureau.



Just looking at the two year growth, we see that December 2010 to December 2011 was the lowest increase for all of 2011. So naturally it was much easier to get a +19.6% increase from Dec 2011 to Dec 2012.

Mind you, it was still an all time record breaking month. But it is important not to be irrationally exuberant. The growth factors could easily return to single digits by next month.

On the other hand a 20 hour train trip was just reduced to 8 hours. That makes it much easier to come from Beijing for a 3 day break than before. If you sleep on a train you still have marathon 24 hours in Macau.

It's not just Beijing, but there are hundreds of millions of people within short commute along the rail line. They can all get to Macau in significantly less time.


The "Holy $h!#!" was mostly in response to the stock prices that day, 5-6% gains for LVS and WYNN at least.

I'm now out of all 3 casino companies I had bought. They're all up since I sold, oh well.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
FleaStiff
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January 4th, 2013 at 3:36:52 PM permalink
The Chinese are inveterate gamblers, the Chinese New Year is famous as a time of virtually non-stop gambling.

The ordinary Chinese who are now able to hop aboard a super-train will feed the casinos but the zillions of corrupt officials will be pouring the real money into the casinos.

By the time things dampen in the Far East, Las Vegas will be rebounding too.
pacomartin
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January 5th, 2013 at 2:53:23 AM permalink
Quote: FleaStiff

By the time things dampen in the Far East, Las Vegas will be rebounding too.



It depends on what you mean by "rebound". It is still far away from it's record highs 5 years ago.

Nevada scorecard on the 5 year anniversary of the peak gaming revenue of $13 billion. Revenue has returned to $10.85 billion.
Outside of Baccarat clear gains, 3 Card Poker and Roulette are the only two table games headed back to their pre-depression high.

Change in millions of dollars per year ( in percent)
+$382 BACCARAT , 39.1%
-$463 TWENTY-ONE , -31.7%

+$3 BINGO , 67.6%
-$18 LET IT RIDE , -27.8%
-$18 3-CARD , -10.5%
-$21 KENO , -40.0%
-$21 PAIGOW , -56.8%
-$24 PAIGOW POKER , -18.2%
-$40 ROULETTE , -10.6%
-$65 MINI-BACCARAT , -44.0%
-$77 CRAPS , -16.3%
-$14 OTHER GAMES , -8.8%
-$295 MINOR GAMES -18.1%

-$40 RACEBOOK , -41.7%
-$14 SPORTSPOOL , -8.0%
-$41 POKER , -24.3%

-$1,652 Slots , -19.5%
-$2,123 All Gambling, -16.4%
odiousgambit
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January 9th, 2013 at 12:34:19 AM permalink
it continues

http://money.cnn.com/2013/01/09/investing/mgm-china-macau-casino/index.html?iid=HP_LN
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!”   She is, after all, stone deaf. ... Arnold Snyder
rxwine
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January 16th, 2013 at 12:04:39 AM permalink
Sorry if this has already been mentioned somewhere, but what is China's cut in all the action. Or is that proprietary/or property by property info?

Could they wait until some future date, and just take it all for themselvesl?
There's no secret. Just know what you're talking about before you open your mouth.
pacomartin
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January 17th, 2013 at 6:16:59 PM permalink
Quote: rxwine

Could they wait until some future date, and just take it all for themselvesl?



The gaming tax is 40%. In addition, a fixed premium is also payable, plus a premium per VIP table, other table, and slot machine. Gaming promoters pay taxes on commissions received.

I suppose that there is always a risk that any foreign government can nationalize your industry, but I don't think it is substantial in this case. The Chinese government invited foreign competition into Macau after 40 years to build up the industry. It has succeeded beyond anyone's wildest imagination. Nationalization rarely comes out in the long run as the reaction can be considerable. China sells a lot of stuff to the USA. It seems as if they will be happy with their 40%.

I've talked to some people about dealing with the Chinese government. They are pretty careful to get the terms they want, or they just won't enter into a business agreement. They don't seem to feel any pressure for their people. If they got through the last two millenia without something, they figure they can last a few more years.

Sociedade de Jogos de Macau, the original gaming company operating in Macau since 1962 , is still the largest in terms of gaming revenue and number of casinos.
pacomartin
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October 25th, 2013 at 2:00:22 PM permalink
Gaming revenue for first 9 months of 2013 is 260,632 million Hong Dollars. That is roughly US$123 million per day, vs US$17.2 million per day for Las Vegas Strip.
Macau now has 7 times the Las Vegas strip (or 4 times the state of Nevada).

The rate of increase is still a phenomenal 20% so they should reach $1 billion per week shortly.
rxwine
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October 25th, 2013 at 3:59:57 PM permalink
Quote: pacomartin

Gaming revenue for first 9 months of 2013 is 260,632 million Hong Dollars. That is roughly US$123 million per day, vs US$17.2 million per day for Las Vegas Strip.
Macau now has 7 times the Las Vegas strip (or 4 times the state of Nevada).

The rate of increase is still a phenomenal 20% so they should reach $1 billion per week shortly.



I imagine it's the money laundering capital of the world now too.
There's no secret. Just know what you're talking about before you open your mouth.
pacomartin
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October 31st, 2013 at 12:35:36 PM permalink
Quote: rxwine

I imagine it's the money laundering capital of the world now too.



Stanley Ho (age 91) who had the license for gambling in Macau exclusively for 40 years has always been considered to be a mobster. But with a net worth of $2 billion, he is also the richest man in Macau. Ho has 17 children born to four women. In November 2010, Ho was awarded the Grand Bauhinia Medal the highest under the Hong Kong honors and awards system, reserved for those making a lifelong and highly significant contribution to the well-being of Hong Kong.

In 2010 NJ requested the right to investigate MGM Resorts' dealing with Pansy Ho, Stanley Ho's designated heir. Rather than risk their investment in Macau MGM Resorts agreed to sell their interest in the Borgota in 3 years. As typical with casinos, they failed to find a buyer who was willing to pay what they asked. At the end of three years, they petitioned the board to allow them to keep their share.

I believe the re-licensing is still under review.


Quote: A window on China: What an offshore gambling mecca reveals about business in China Dec 10th 2011 | MACAU | -The Economist


Many come to elude China's strict limits on the amount of yuan people can take out of the country. A government official who has embezzled state funds, for example, may arrange to gamble in Macau through a junket. When he arrives, his chips are waiting for him. When he cashes out, his winnings are paid in Hong Kong dollars, which he can stash in a bank in Hong Kong or take farther afield.

“There are many ways to launder money, more than we can think of,” says Davis Fong, an associate business professor at the University of Macau. Some bypass junkets and instead use pawnshops and other stores, where they buy an item with yuan and promptly sell it back for Macanese pataca or Hong Kong dollars—less, of course, a generous cut for the shopkeeper. No one can quantify how much money is laundered in Macau, but it'ssuch an obscene amount of money you would die, one resident avows.

beachbumbabs
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October 31st, 2013 at 11:25:26 PM permalink
Quote: pacomartin

Stanley Ho (age 91) who had the license for gambling in Macau exclusively for 40 years has always been considered to be a mobster. But with a net worth of $2 billion, he is also the richest man in Macau. Ho has 17 children born to four women. In November 2010, Ho was awarded the Grand Bauhinia Medal the highest under the Hong Kong honors and awards system, reserved for those making a lifelong and highly significant contribution to the well-being of Hong Kong.

In 2010 NJ requested the right to investigate MGM Resorts' dealing with Pansy Ho, Stanley Ho's designated heir. Rather than risk their investment in Macau MGM Resorts agreed to sell their interest in the Borgota in 3 years. As typical with casinos, they failed to find a buyer who was willing to pay what they asked. At the end of three years, they petitioned the board to allow them to keep their share.

I believe the re-licensing is still under review.


Quote: A window on China: What an offshore gambling mecca reveals about business in China Dec 10th 2011 | MACAU | -The Economist


Many come to elude China's strict limits on the amount of yuan people can take out of the country. A government official who has embezzled state funds, for example, may arrange to gamble in Macau through a junket. When he arrives, his chips are waiting for him. When he cashes out, his winnings are paid in Hong Kong dollars, which he can stash in a bank in Hong Kong or take farther afield.

“There are many ways to launder money, more than we can think of,” says Davis Fong, an associate business professor at the University of Macau. Some bypass junkets and instead use pawnshops and other stores, where they buy an item with yuan and promptly sell it back for Macanese pataca or Hong Kong dollars—less, of course, a generous cut for the shopkeeper. No one can quantify how much money is laundered in Macau, but it'ssuch an obscene amount of money you would die, one resident avows.



paco,

This is an amazing thread, full of terrific information. Seeing it for the first time today, it's like a time-lapse capsule of Macau growth factors and revenues. Thanks very much, and I encourage you to keep updating it.
If the House lost every hand, they wouldn't deal the game.
Tomspur
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November 28th, 2013 at 12:51:31 AM permalink
I'm not sure if this has been mentioned in this thread but I thought it may be of interest to some of you.

At the moment the Chinese government only allows very limited numbers of people to cross over into Macau to gamble. how they work it is through "territories" or "provinces". So I would imagine at this point there is probably about 10 to 15% of the Chinese population who are of gambling age that are aloowed to enter into Macau at any one given time. Another interesting thing about Macau is that the Chinese government limits the amounts of money that each person is allowed to take "in cash" with them into Macau. I think the limit is around $3400.

Obviously there are ways around this phenomena, like a watch shop on the caisno floor who will sell you a watch for $25 and give you the $9975 in change in cash. Or there is obviously the junkets that will wire your money into Macau for you and have it available there when you arrive.

Another interesting fact is that, on most weekends in operation the Rolex store inside Wynn Macau sells out its inventory. One young gentleman, around 25 years old bought 2 x $125k Rolex watches.........................

Next time you head out to Vegas try to quantify those numbers.
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pacomartin
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January 27th, 2014 at 10:03:17 PM permalink
Quote: Tomspur

Next time you head out to Vegas try to quantify those numbers.



Vegas Strip brought in $6.429 billion in gaming revenue in the most recent 12 month period. Overall income on strip casinos including gaming, rooms, food, beverage, and other attractions hovers just over $15.3 billion (up from $15.2 billion last year). Nevada state brings in $11.052 billion in gaming revenue. Visitor volume has not reached a final tally, but should be almost 40 million.

Macau casino gaming revenue (based on only 17 million visitors) surpassed $45 billion last year.

So the idea that less than half the number of visitors should lose 7 times as much money is difficult to wrap your head around. Either there are a lot of suicides, or it is the biggest money laundering operation on the planet.
endermike
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January 28th, 2014 at 6:37:39 AM permalink
Aren't there substanially different stakes on many of the tables? Or at least more consistent whale action?
nickolay411
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July 7th, 2014 at 9:08:36 PM permalink
I'll be there later this week. I heard from a friend that it's quite hard to find a minimum of 300 HKD even on the weekdays. That's roughly 38 dollars.

As far as big whale action, I've also heard the Government in Beijing is now making it pretty difficult for government officials to get to Macau. I'm not sure we will see a revenue dip though...
rxwine
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December 6th, 2014 at 2:58:40 PM permalink
Reuters story on Macua:

Quote:


Junket operators that connect China's wealthy punters to Macau's casinos are waiting as long as a year for gamblers to repay billions of dollars of loans, crippling the business model of an industry that sustains the world's biggest casino center.

These businesses, which lend to high rollers and operate private gambling rooms, normally collect within 30 days and charge interest rates as high as 3 percent per month on overdue balances, according to Macau-based junket consultant Tony Tong.

Now the junkets are on the hook for a surge in bad debts as China's economic slowdown and a crackdown on corruption chase some VIP gamblers away. With little access to credit and slow repayments, the money isn't flowing.

"The business model looks near-broken," said Philip Tulk, an analyst with Standard Chartered in Hong Kong.



More here
http://www.reuters.com/article/2014/11/30/us-macau-debt-idUSKCN0JE00N20141130
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pacomartin
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December 6th, 2014 at 8:40:52 PM permalink
Quote: nickolay411

I'll be there later this week. I heard from a friend that it's quite hard to find a minimum of 300 HKD even on the weekdays. That's roughly 38 dollars.

As far as big whale action, I've also heard the Government in Beijing is now making it pretty difficult for government officials to get to Macau. I'm not sure we will see a revenue dip though...



For the first 11 months of the year Macau has brought in 328.2 billion MOP - Macau Pataca (8 MOP to the USD) which is slightly more than the 327.3 billion MOP from last year.

But earnings have been dropping like crazy since February when revenue saw a 40% increase in year over year compared to February 2013. To drop from the high to nearly equal for the year was massive. Every month is doing worse than the previous month.

Gross Gaming Revenue from commercial casinos in USA for 2012 was $37.34 billion. So in some sense it is not shocking that Macau can bring in roughly $44 billion since it is the primary gaming center of a country that is four times the population of the USA.
nickolay411
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December 8th, 2014 at 6:10:20 PM permalink
yep i was wrong about it not dipping, definitely dipped. The crackdown affect on goverment officials losing boatloads of cash seemed to work well.

still huge profits like you said. a really huge tourist base from the guangdong province.
ShineyShine
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December 8th, 2014 at 7:43:07 PM permalink
pacomartin and nickolay, yous both seem very knowlegeable and clued up about about Macau. So, in your opinion, what do you think are the long term effects of this? The article mentions a broken business model... are they really that reliant on a few high rolling whales that are defauliting?
andysif
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December 8th, 2014 at 8:55:59 PM permalink
A side note.

Corruption in China is so bad that after a recent fall of a top military official they found so much cash in the basement of one of his house that the "police" cannot count it but had to measure it by weight.

It weights about a ton.

And presumably, that's only the part that he cannot smuggle out of the country.
nickolay411
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December 9th, 2014 at 12:33:06 AM permalink
Not just defaulting, but most of the whales were corrupt government officials who are now on a strict watch on entering macau so repeat whale business has totally dropped. Revenue is stabilizing though even without the whales because of the influx of recording breaking tourists and regular players... but revenues could continue to drop, while Macau builds itself a destination resort with entertainment.

Also junket operators are closing as they cant recoup most of the lost money, this will change how the casinos target their valuable players. We might see more traditional host relationships with players in the future as this right now is very non existent.

really i dunno :P
ShineyShine
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December 10th, 2014 at 4:22:27 PM permalink
Quote: nickolay411

Not just defaulting, but most of the whales were corrupt government officials who are now on a strict watch on entering macau so repeat whale business has totally dropped. Revenue is stabilizing though even without the whales because of the influx of recording breaking tourists and regular players... but revenues could continue to drop, while Macau builds itself a destination resort with entertainment.

Also junket operators are closing as they cant recoup most of the lost money, this will change how the casinos target their valuable players. We might see more traditional host relationships with players in the future as this right now is very non existent.

really i dunno :P



Thanks for the reply. It'll be interesting to see how it pans out.
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