Macao casino revenue grew ‘only’ 7% last month, which is bad … if you were thinking monthly, large double-digit increases (21% over the past five months) were a sustainable norm. “This is decent,” J.P. Morgan analyst Joseph Greff said of the $3.3 billion May gross, a near-record amount. For the remainder of the year and through 2013, Greff projects growth in the low double-digits. The softness of the Sands Cotai Central opening — “slower than expected” was how Deutsche Bank‘s Carlo Santarelli characterized its performance — may have retarded the May numbers and Greff doesn’t expect any serious “Oomph” (my term, not his) from Sheldon Adelson‘s newest pleasure palace until later this summer, when Phase II opens.
“Growth was going to have to slow at some point,” Greff writes of the market cool-off, noting that Galaxy Cotai opened to boffo biz a year ago, further dampening the year-over-year comparison. While junket operators are pushing deeper into China in search of high rollers, Greff doesn’t think we’re seeing a Chinese liquidity crisis but “VIP supply-demand equilibrium.” Also, the more profitable mass-market player base may be comparatively untapped.
Both Adelson and Steve Wynn like to huff and puff that market-share numbers are deceiving because market leader Stanley Ho has 28-%30% of the table-game market 
(Wall Street estimates vary) but shares that with VIP-room operators and such. That cuts both ways. It was recently reported that 30% of Sands China revenue is outsourced to what you might call sub-sub-concessionaires. Anyway, even with the Cotai Central opening, Adelson only had 16.5%-17.5% of market share — better than Wynn Macau, Melco Crown Entertainment or MGM Grand Paradise, but down from April. (Has Adelson finally spread himself too thin?) Meanwhile, Galaxy Entertainment is sitting pretty at 20%, still riding the Cotai wave, one year later.
Surrendering to the inevitable, Adelson is waving the white flag with regard to Cotai Sites 7 & 8. Besides, it’s hardly the time for Sands to be fighting City Hall when it’s got only 11 months (and no governmental approval) to develop Site 3 or possibly lose it, too. While the $100 million writeoff of Sites 7 & 8 is a drop in the Las Vegas Sands bucket, you have to wonder if the impeded development of Site 3 is the Macanese government’s attempt to precipitate a crisis whereby it can claw back still more land and repurpose it for non-casino expansion.
Set-to in Massachusetts. Since he’s got irons still in the fire in Macao, Madrid, Barcelona and maybe New York City, one can understand why Adelson might not want to concern himself with Massachusetts right now. Besides, what’s the likelihood he could avoid a repeat of the Sands Bethlehem cost-overrun embarrassment? Still, if we were to assume that Sheldon could build a Boston-area casino and not grossly overshoot the $500 million minimum budget, then his ‘I’m taking my roulette ball and going home’ harrumph may have been premature.
Y’see, Massachusetts Gaming Commission Chairman Stephen Crosby is talking about holding back one or more casino/slot parlor licenses. (Given the caliber of some of the applicants, I don’t blame him.) The MGC will meet next month and try to determine just how much casino gambling the Bay State can support. But don’t mistake this as an olive branch to Adelson. “Sands likes to go very big, but we have already something like five to 10 operators who seem to think the market looks good,” he said. Translation: “Don’t let the doorknob hit you in the butt, Shel.”
State Rep. Joseph Wagner (D, above) expressed considerable irkage over Crosby’s remarks but the latter has a point. Right now, it’s essentially Caesars Entertainment or nobody in the Boston area and even if Taunton voters don’t blow the Mashpee Wampanoags a raspberry in a June 9 advisory ballot, there’s no chance they can consummate a deal, get land taken into trust by the Interior Department and finalize a compact with Gov. Deval Patrick (D) by July 31. No way!
Given Crosby’s remarks about a plethora of potential operators, the western-region license is the likeliest to be rewarded, what with Penn National Gaming, Ameristar Casinos, Mohegan Sun, Hard Rock International and MGM Resorts International among those jumping at the bait. Meanwhile, the all-hat/no-cattle Aquinnah Wampanoag casino push in the southeast (right) is on its last leg, having been nixed by two-thirds of Freetown freemen. As for mystery partner KMD Consulting and its alleged advisory role in CityCenter, I ran that one by MGM’s Alan Feldman, who writes, “Looks like they may have been a millwork sub to another sub-contractor. Sometimes subs contracted out to other subs because they couldn’t fulfill their own contract scope.” Well, at least the Aquinnah know where they can get some Vegas-quality millwork done.
As for Sheldon, it’s just not his week. The National Labor Relations Board ruled in favor of security guards who are trying to organize at Sands Bethlehem. Expect Adelson to take this all the way to the Supreme Court, if possible. Failing that, he’ll sell the place. He’d rather eat dirt that allow one measly union on his premises.
