Singapore Slows, Vegas Kicks, Macau still riding the China Bubble

Apparently a few LV Sands websites were the target of a cyber attack earlier this month. I just visited their corporate site and it was up long enough to get a look at their 2013 December quarter financial results.

As always (and combined with other quarters for 2013), they made for very interesting reading.

The one line summary of how each of the world’s 3 biggest casino towns fared during calendar 2013 could go something like this:

• Macau: the 1,000 pound gorilla somehow managed to gain a lot more weight
• Las Vegas: after a long slumber the original casino Mecca is kicking back into gear
• Singapore: either taking a breather, or running out of puff

Macau

This place just keeps on defying those who contend such a rapid rate of growth cannot last. Casinos in Macau took staggering $45 billion in 2013, almost 20% up on 2012.

This sizeable leap is reflected in LV Sands’ figures for their Macau properties which were in total 38% up on 2012 (2013: $7,969 million | 2012: $5,778 million).

Action from mass market punters surged with (Q4) year on year Non-Rolling chip drop increases of 87% at the Venetian, 80% at Sands Cotai and 44% at Sands Macau.

The VIPs didn’t slow down either with Rolling Chip volume increases of 32% at the Venetian, and 72% at Sands Cotai.

The sixty billion dollar question: Can Chinese players pump another 20% or so more through Macau’s casinos in 2014?

There seems to a growing list of very smart people (eg George Soros) voicing concerns that the increasingly wobbly deck of cards that is China’s unprecedented credit bubble may soon come crashing down. In January financial markets shuddered at the prospect of the Credit Trust Co. defaulting on a $496 million debt and starting the wave. A mystery white knight bailed out investors at the 11th hour.  A couple of weeks ago a $US50 million coal-mining bond did fail to repay its investors…this time no white knight. The scary thing is there is $US 875 billion worth of similar debt products maturing in China during 2014.

If China pops Cotai may see quiet casino floors for the first time ever.

Las Vegas

According to Nevada’s Gaming Control Board, casinos on the Las Vegas Strip took $6.5 billion from punters during 2013, a 5% increase from 2012. Not exactly a Macau-like increase, but pretty good for a market that has been pretty stagnant since 2008.

Taking a look at the LV Sands number from their Las Vegas casinos, it looks like they were responsible for a good chunk of this growth. They collected $583 million from their casino floors in 2013, against $510 million in 2012 for a healthy 14% increase. Almost all of the $73 million increase came in the December quarter which was up 72% on the same quarter 2012. Now that is a Macau-like increase!

Singapore

Global gaming’s other golden child had an off year in 2013.

Whether just a hiccup on the road to bigger and better things, a reflection of authorities refusal to embrace the VIP Junket market with the same enthusiasm that Macau does, or perhaps a portent of a broader slowdown, the fact is this market lost steam. Marina Bay Sands took $2,362 million in 2013, against $2,270 million in 2012. What’s more, quarterly revenues trended down during the year: Q1 $640 million; Q2 $590 million; Q3 $628 million; Q4 $504 million.