Macao’s loss is Vegas’ gain

There is discernible evidence that the anti-corruption crackdown in China is redounding to Las Vegas‘ benefit. According to a report by Deutsche Bank‘s Venetian MacaoCarlo Santarelli, “we do see a relatively compelling empirical case that supports the view that anti-corruption crackdowns have, at the very least, temporarily diverted VIP flow from Macau.” For one thing, international traffic into McCarran International Airport is up 13% for April through July — coinciding with the anti-corruption push. This also parallels a 6% dropoff in rolling chip volume (the primary metric of VIP play) in Macao, as VIP rooms see less action.

“Beginning in April, when VIP drop decelerated significantly but remained positive, we saw a sharp uptick in Las Vegas Strip baccarat drop,” Santarelli adds. Cash-flow losses in Macao, he says, have been accounted for by increased action on the Strip. “Thus, it can be argued that roughly 37% of the Macau drop shortfall has shown up in Las Vegas.” We’ll see if Santarelli’s thesis holds true when August’s Las Vegas revenue numbers are released.

* Detroit casino revenue was flat year/year last month. That’s good news for a market that was expected to lose business to Toledo. In a ‘What’s wrong with this picture’ turn — but not an unpleasant one — Greektown Casino was the sole gainer, up 3%. That more than made up for a 2% drop at MotorCity and an incremental slippage at MGM Grand Detroit. Besides, with a 42% market share (compared to Greektown’s 25%), MGM execs probably aren’t losing any sleep.

* The administration of New Mexico Gov. Susana Martinez (R) is understandably piqued that the Pojoaque Pueblo tribe wants a new gaming compact that would allow it to cut off revenue-sharing with the state and lower Martinezthe gambling age to 18 (from 21). Martinez is further irked that the Pojoaque are negotiating directly with the Interior Department for a new compact. Unfortunately for her, the courts don’t share her umbrage and are allowing compact talks with Washington, D.C. to proceed. The case is a critical precedent for Martinez and the State of New Mexico. If the Pojoaque prevail, the administrations current and future will be dealing from a position of weakness in compact negotiations.

The tribe, for its part, claims Martinez is not negotiating in good faith. In a solomonic move, Senior U.S. District Judge James A. Parker denied the injunction but expedited the trial date, much to the state’s gratification.

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