Macao’s incredible jackpot; Execs on the move

Grand-LisboaIf you think the emergence of Macao as the gambling capital of the world has been amazing, you ain’t seen nothin’ yet. That’s the essence of a new report from Nomura Securities. It predicts that the Macao market has the potential to double, reaching $80 billion a year. I repeat, $80 billion a year. Why? In part because so many Chinese have yet to visit the enclave. As pundit Shuli Ren writes, “in an under-penetrated market, supply drives growth. As more casinos become available in Macau, the pie will expand with a multiple effect.” Nomura calculates that Macao has a very low penetration rate and that last year’s visitation numbers could increase twelvefold before the market reaches maturation. That’s 217 million Chinese (and others) having a fiddle in Macao’s casinos. Consider this: In Macao, there is a ratio of one gaming position to every 1,900 people. In this country, it’s one position to every 200 people.

venetianmacaoNomura likes Las Vegas Sands best for its “underutilised asset base.” Melco Crown Entertainment and relatively undervalued (11 times cash flow) Sociedade de Jogos de Macau is identified as the “dark horse.” Basically, the greater the exposure to mass market play, the better the value. The good news doesn’t stop there. J.P. Morgan analyst Joseph Greff is projecting a 24% increase in February revenues so far. Sands China has elbowed its way to the forefront, capturing the most market share — 25%. With Galaxy Entertainment having a strong February (22%), SJM slips to third place, although still well into double digits.

doubledown-jim-veevaertThe seats of DoubleDown Interactive founders Greg Enell and Cooper DuBois didn’t have time to get cold before International Game Technology filled them with Zynga refugee Jim Veevaert. Lucky dog, he gets to work from Seattle, not Las Vegas. His portfolio centers on developing new DoubleDown strategies and games. Zynga having sunk from first place in social gaming to third, Veevaert picked a good time to board IGT, which is trying to capture first place from Caesars Interactive. Veevaert’s bounced all over the game industry and IGT’s biggest challenge may be keeping him in place for more than a couple of years.

After three years at Affinity Gaming, CEO David Ross is calling it quits. “A natural inflection” Mitchellwas his description of his departure — scheduled for July — from the former Herbst Gaming. Ross’ tenure was marked by some dramatic changes in the company, including swapping slot routes to Golden Gaming in return for a foothold in the Colorado casino industry. He also was responsible for changing the all-too-apt name of Terrible’s Casino to Silver Sevens, a moniker with considerably more appeal. Ross’ brief at Affinity had been to reorganize the bankrupt company and now he plans on taking a sabbatical from gaming (or is being held to a non-compete clause).

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