GM Grand Macau, a venture between the Las Vegas-based company and billionaire Stanley Ho’s daughter Pansy Ho, will increase its VIP tables by 70 to 150, Chief Executive Officer Terrence Lanni said on a conference call today.
Macau earned almost 70 percent of gaming revenue from VIP gamblers, defined as those who spend more than us$ 124,000 every trip. That’s higher than the 67 percent share in 2006, even as the city’s government sought to slow growth in the number of high rollers coming to the only place in China were casinos are legal.
“We have determined it would be important to add more VIP tables," Lanni said. “On balance, we’re not pleased with the past performance of our property in Macau, but we believe that we are taking the necessary steps." The casino, a block from Wynn Resorts’ only property the city, has 366 gaming tables. Lanni said the casino will add about 22 VIP tables this month.
MGM Mirage said second-quarter profit fell 69 percent to us$ 113.1 million as cash-strapped U.S. gamblers spent less at its Las Vegas casinos. MGM Macau, opened in December 2007, had a quarterly operating loss of us$ 5 million on earnings before interest, tax, depreciation and amortization of us$ 23 million.
The move to bring in more VIP gamblers, partly through junket operators, helped raise MGM Macau’s market share to 9.5 percent in July from 8 percent the previous month, Lanni said. Junket operators bring wealthy gamblers to Macau casinos, collecting commissions based on how much their clients bet. “Since we have incorporated MGM Mirage marketing in June this year, we have doubled our VIP in-house business and we think that can continue to grow," he said.
Crown Macau casino, run by a venture between Australia’s richest man James Packer and Pansy Ho’s brother Lawrence Ho, implemented similar changes since opening in May 2007. The casino converted some mass gaming halls into VIP rooms and signed an agreement with a company representing junket operators.
“Macau’s mass market lagged people’s expectations," MGM Mirage Chief Financial Officer Daniel D’Arrigo said in a phone interview. ”The VIP business is growing at a faster pace right now and that’s why you’re seeing a shift in the focus for operators right there."
Macau this month cut the maximum time mainland Chinese travelers may stay in the city while en route to other destinations by half to seven days, as China tries to curb high- roller gambling growth in the former Portuguese enclave.
The government of China’s adjoining province of Guangdong in May limited travel by its residents to Macau to once a month. Mainland gamblers make up about 60 percent of Macau’s visitors, with Hong Kong and Taiwan contributing most of the rest.