Mass-market plays overtake VIP sales at Emperor
A plunge in high-stakes play appears to have turned the tables at Macau casino investor Albert Yeung Sau-shing's Emperor Entertainment Hotel.
For the first time, gaming revenue from the mass-market tables at the Grand Emperor Hotel overtook revenue from its previously dominant VIP baccarat tables for the year to March.
The shift echoes broader trends in the Macau casino market. A credit crunch among high-rolling gamblers and their junket agents - who bring players to casinos, issue them credit for gambling and collect debt - continues to weigh on VIP revenue.
At the same time, revenue from mass-market tables continues to grow slowly but steadily as it depends less on big bettors and does not rely on credit-driven play.
'The VIP market largely depends on our credit control policy and we have been very cautious with lending these days,' said managing director Vanessa Fan. 'At the moment, our strategy is to be safe rather than aggressive. Competition is still very keen.'
Partly as a result of the more conservative credit policy, VIP chip wagers on the company's 10 self-operated high-stakes tables at Grand Emperor plunged to HK$19.4 billion in the year to March, down 60.57 per cent from HK$49.2 billion a year earlier. Attributable net winnings from VIP revenue totalled HK$274.6 million, down 62.16 per cent.
The decline in VIP play led to a 36.94 per cent drop in revenue across the company. Sales fell to HK$791.46 million from HK$1.26 billion.
Net profit plunged 85.75 per cent to HK$28.85 million from HK$202.46 million previously on falling high-stakes revenue and a HK$46.65 million accounting loss on property revaluations.
However, attributable revenue from mass-market play bucked the downturn by rising 13.44 per cent to HK$292 million, besting the VIP revenue by a margin of HK$17.4 million.
Emperor Entertainment recently restructured its revenue-sharing agreement with Stanley Ho Hung-sun's SJM Holdings, the licensed casino operator, to include a performance-based bonus on top of Emperor's traditional 40 per cent cut of gross gaming revenue.
Emperor's revised share worked out to be 42.33 per cent of mass-market gaming revenue in the six months to March, given the strong performance and incremental gains. The casino added seven new mass-market gaming tables during the period to bring its total to 59 units.
'Mass-market revenue is stable and we still have room to expand,' Ms Fan said.