Macau

Two of Galaxy Entertainment’s Macau resorts have won accolades from the 2014 China Travel and Meeting Industry Awards. Galaxy Macau got best resort of the year (Hong Kong/Macao) for the first time, while its StarWorld Hotel retained the title of Best Service Hotel of the year.

G2E Asia, the biggest event in the show’s eight-year history, wrapped up on Thursday with one clear message from participants -- Macau is likely to retain its crown as the world’s top gambling destination for years to come and the recent spate of negative news is likely to have a minimal impact.

Resorts on Macau’s Peninsula are regaining favour over their larger and more diversified peers on the Cotai strip, according to Galaxy Entertainment’s chief marketing officer, Kevin Clayton. Citing a study done last year, along with MGM China, Clayton said the research had identified a move by the “more discerning” customer away from Cotai and back to the peninsula. Clayton was speaking at a panel study at G2E Asia on Mass Marketing and how to reach target segments. He was responding in particular to a comment that some of the peninsula properties now seemed dated.

The slot gaming business in Macau is likely to pick up in coming years, boosted by a massive increase in supply, but also helped by an increased effort by suppliers to tailor games to the Asian market, according to a panel session at G2E Asia. Galaxy Macau vice president of electronic gaming Peter Johns said it has taken 10 years to get the proper games to the market. “Now we are starting to see true Asian graphics and real machines for the Asia market, with the right colours and designs. We are seeing fantastic growth in these products,” he said.

Sands China said in a regulatory filing that it has granted certain employees stock options. The board of directors said the employees will be able to subscribe for shares of US$0.01 each in the capital of the company. The options relate to 2,723,800 shares in the company and are valid for a period of ten years. The closing price of the stock on the day of the grant was $57.75.

Galaxy Entertainment said its Q1 adjusted EBITDA rose 38 percent, driven mainly by Galaxy Macau. EBITDA was $3.8 billion, while revenue jumped 33 percent year-on-year to $20.2 billion, largely in line with expectations. Galaxy Macau saw a 44 percent year-on-year gain in adjusted EBITDA, while StarWorld Macau rose 26 percent year on year. Total gaming revenue grew 33 percent from the prior year to $20.2 billion as total mass table revenue increased 37 percent to $5.1 billion and total VIP revenue grew 32 percent year-on-year to $14.6 billion.

An increasing focus on the premium mass market is likely to fuel a more consistent growth rate in Macau and will provide the impetus for casinos to diversify their attractions as the customer base expands, according to executives speaking at G2E Asia in Macau. The market has already seen a significant shift with the share of VIP Baccarat as a total of gaming dropping to just over 63 percent last year, compared with its peak a few years ago. While the revenue stream from the mass market is not as high, the sector is three times more profitable.

Casino executives with some of Macau’s largest operators say they are confident in the future of Macau, dismissing recent news reports that have sent casino company shares tumbling as not something operators focus on. Scandals involving the junket operators that bring in China’s high rollers, slowing growth in the Chinese economy and reports of a clampdown on illegal money transfers have all unnerved jittery investors.

Macau table-only gross gaming revenue was MOP19.2 billion ($2.4 billion) through May 18th, with a 15 percent run rate year-over-year, according to Sterne Agee, which maintained its forecast for GGR growth for the full month of between 12 and 17 percent. Average table GGR was MOP 920 million, down slightly from MOP 1.3 billion the prior week. The firm said that it continues to speak with operators regarding the fallout from the government’s smoking ban and that feedback continues to show the impact will be benign.

Asia’s biggest gambling show, G2E Asia, kicks off in Macau on Tuesday and is expected to be the biggest so far in the event’s eight-year history in terms of visitor numbers. Organisers are forecasting more than 6,400 visitors to the three-day show, with more than 161 exhibitors. More than 60 percent of those attending will have come from abroad and 95 percent of major casinos from around Asia will be present.

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