pacomartin
pacomartin
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April 17th, 2010 at 2:45:33 PM permalink
The first quarter 2010 gaming revenues are posted in Macau and they are represent over 60% growth from the same quarter of last year.

Gaming revenue was US$5.32 billion dollars for the first quarter of 2010. That's compared to US$5.55 billion for the Last Vegas strip for the entire year 2009.

Wynn Encore in Macau is scheduled to open this month. I think we know what happened in Philadelphia. If Macau is now four times the revenue of the strip, Steve Wynn's advisors simply told him that to mess around in a market like Philadelphia just distracts the company from the gold mine.

Macau revenue is 89% baccarat. Las Vegas strip is 20.2% baccarat up from 13.5% a few year's earlier.
Malaru
Malaru
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April 17th, 2010 at 6:04:11 PM permalink
$%^&% that is a lot of money. So will companies that own casinos in both markets 'share the wealth' to keep the other markets going good- or still be forced to make changes (chapter 11/13) to the not so well off markets. Id imagine a combination.
"Although men flatter themselves with their great actions, they are not so often the result of a great design as of chance." - Francois De La Rochefoucauld
pacomartin
pacomartin
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April 17th, 2010 at 6:32:46 PM permalink
Quote: MalaruSo

will companies that own casinos in both markets 'share the wealth' to keep the other markets going good- or still be forced to make changes (chapter 11/13) to the not so well off markets.



What is really amazing about Macau is the rate of growth since they lifted the 40 year monopoly in 2002.
Year US$billions
2002 $3.0
2003 $3.9
2004 $5.6
2005 $6.1
2006 $7.4
2007 $10.8
2008 $14.2
2009 $15.5



Sands and Wynn still have the tax advantage of Vegas which motivates them to try and bring the biggest whales over to the USA to play at the much lower rate. But as long as people are flying in charter aircraft you are talking about highly volatile returns. It's expensive to bring them here, and whales can sometimes win big.

There are two commercial nonstops from Seoul, Korean (with a pickup in Inchon) per week. So it is possible for someone to fly here from Asia for $1700. Although there are a lot more flights going in non stop from Europe (particularly London and Manchester), Vegas could benefit from some more nonstop flights to Asia.

But I just think that there will become more and more competition. Hard Rock intends to build the biggest casino in Europe with 1,264 hotel rooms, 6,000 slot machines, and 400 gaming tables within an easy drive of the Budapest, Vienna, and Bratislava. You can expect more competition in Eastern Europe, and possibly on the southern coast of Spain.

Even some of the muslim countries with more liberal governments like Morocco may embrace gaming.

I don't think it is a question of chapter 11, so much as them closing down north strip and not rebuilding it. No new construction projects for 10 years. Possibly station casinos never getting out of bankruptcy.
pacomartin
pacomartin
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April 21st, 2010 at 2:18:59 PM permalink
Steve Wynn is opening his Encore hotel today in Macau. The discrepancy between Vegas and Macau Wynn resorts is growing.

Slot revenue is about the same, but table revenue is almost 5 times higher in Macau. And remember that Vegas has both hotels open for over a year, while Macau has only the single Wynn resort.

However, the gaming revenue only went up in Vegas by 2.2% when they opened the Encore.

Steve Wynn is still planning on opening a 3rd resort on Cotai Strip ( a section of reclaimed land on a different island).

Wynn Macau opened on September 6, 2006. In 2007 operating income for Vegas and Macau was about the same. Vegas lost money in 2008 and 2009. Steve Wynn told reporters he may move the corporate headquarters to Macau.

He moved to Vegas in 1967 when he was age 25. Who knows, maybe he will sell the money losing Vegas resorts.
Ayecarumba
Ayecarumba
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May 16th, 2011 at 6:34:32 PM permalink
I came across this old article on Wynn Macau's hold rate, which was higher than expected for nine straight quarters (at the time the July 2009 article was written).

Theoretically, the baccarat hold should come in at 2.85%, but Wynn did 3.6% in the first quarter of 2009, which translated into $80.25 million above expectation. It was interesting in the article to hear the banking/gaming analysts attribute this streak to, "luck", and even issue warnings that the win percentage was, "supernormal". There is an interesting description of how Chinese high rollers credit is handled, and a statement that basically says the Wynn may just have dumb players who bet abnormally on "tie".
Simplicity is the ultimate sophistication - Leonardo da Vinci
pacomartin
pacomartin
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May 16th, 2011 at 9:20:22 PM permalink
Quote: Ayecarumba

I came across this old article on Wynn Macau's hold rate, which was higher than expected for nine straight quarters (at the time the July 2009 article was written).



That is an interesting article, but I am not sure I understand how "hold rate" is calculated in Macau. In Vegas "win rate" is simply if you cash in $10,000 at the table and leave with $9200 that records as an 8% win rate. But there is no overt measure of how long you played, how many hands you played. In Vegas baccarat win rates vary from 3.5% to 24% but average closer to 10% or 11%. Large fluctuations are often described as luck, but I think it is usually how long the players sit at the table which is the primary determinant.

So I don't understand exactly what they are doing in Macau. I'll check the SEC documents and add a note if I find something.
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