LVS Vegas, Macau, Singapore gaming results

Las Vegas Sands Corp. (“LVS”) have just posted their 2013 September quarter results.

As the only casino business with a major finger in each of the world’s three big casino pies their results always offer a great barometer on the changing face of global gaming. Those pies being the US (primarily Las Vegas) where the Sands have their foundation properties, Macau where the Venetian Macau, Sands Macau and Sands Cotai Central command a 23% market share and Singapore where, in the Marina Bay Sands, they have one of the only two casino properties in town.

Since 2007 the global casino gaming story has been one of decline in the US (Atlantic City especially…hence the push for online licenses) and rise in Asia…lead by Macau and Singapore.

Looking at the LVS Q3 results this story doesn’t seem to be changing through 2013.

A look at the results…a record quarter for LVS

If you’re interested you can find the full results at the LVS financial info page. Below are the key takeouts.

1. Overall there was a big increase in casino revenues.
   Across all properties, casino revenues (ie excluding all non-gaming revenue) rose to a tick under $3 billion compared with $2.2 billion in Q3 2012. That’s a lazy 36% increase, despite all the talk of global economic slowdown!
2. All of this increase came out of the Asia.
   Sand China Ltd, which encompasses all of the Macau operations, recorded a 43% increase in net revenues from $1.64 billion in Q3 last year to $2.34 this year. Net revenue includes all resort revenues, but as is the way in Macau the vast majority (approx. 90%) of this is casino revenue.
   In Singapore, the Marina Bay Sands enjoyed a 33% increase in casino revenue from $471 million (Q3 2012) to $628 (Q3 2013).
   Meanwhile casino revenues dropped across Las Vegas properties ($171 million to $168 million) and were pretty much unchanged  ($113.1 million to $113.9 million) at the Bethlehem in Pennsylvania.

Despite it’s name, Las Vegas Sands is becoming less of a Vegas business and more of an Asian business by the day. Their American casino business now represents less than 10% of overall casino revenue. In case the numbers don’t spell it out clearly enough the layout of the results statement with Macau and Singapore up front, America out the back, tells you where the company’s focus lies. A future move into Japan, described by president Michael Leven as, “the most expensive investment we’ve ever made from a single property standpoint“, certainly isn’t going to change this.

One more interesting observation is the growth in mass market gaming in Macau compared with the VIP junket market. Across all their Macau properties, the increase in Non-Rolling Chip Drop (mass market play) was significantly higher than increases in Rolling Chip Volume (non-negotiable chips wagered by the VIP players).