A-Max delivers with focus on VIP play

PUBLISHED : Thursday, 20 December, 2007, 12:00am
UPDATED : Thursday, 20 December, 2007, 12:00am

Macau casino investor A-Max Holding's VIP junket venture launched operations with a bang over the weekend, delivering record levels of high-stakes play to Melco PBL Entertainment's struggling US$583.6 million Crown Macau casino hotel.

Crown relaunched on Saturday following a makeover that devotes almost 80 per cent of the gaming tables to VIP-only play.

Analysts said the move by Lawrence Ho Yau-lung's joint-venture firm was similar to the strategy by his father, gaming magnate Stanley Ho Hung-sun. 'In essence, Crown has been re-positioned to mainly target VIP junket business, similar to the original Lisboa,' JP Morgan gaming analyst Billy Ng wrote this week in a research note.

A-Max raised HK$2 billion in share placement earlier this month that will be used to purchase and re-sell VIP gambling chips to junket agents serving the Crown. The deal will attempt to boost table turnover by providing junkets additional liquidity - which they will in turn extend to their customers by lending them chips to gamble with.

'We are like a central bank that the junkets will tap for funds,' newly appointed A-Max chief executive Ted Chan Ying-tat told reporters in Macau yesterday.

In its first 36 hours of business following Saturday's launch A-Max's junket venture sold nearly HK$4 billion in VIP gaming chips to customers representing almost 25 per cent of last month's total turnover at the Taipa Island-based casino, Mr Chan said.

In a deal finalised this month the Crown casino agreed to pay a higher-than-average 1.35 per cent commission on VIP gaming chips sales to AMA International, a firm 80 per cent controlled by A-Max.

In return, analysts expect some nine junkets contracted by AMA will deliver somewhere between HK$50 billion and HK$80 billion in monthly VIP chip sales to customers at the Crown.

'Over the last few months, Melco PBL has been hit by a string of failures that has led to the poor stock performance that we have witnessed,' Citigroup analyst Anil Daswani wrote this week in a research note.

'The arrival of AMA is clearly a transformational event,' he said.