MGM Macau (formerly MGM Grand Macau) is taking firm measures to correct its laggardly performance in the VIP table segment, according to Asian Gaming Intelligence sources.
The joint venture between MGM MIRAGE and Pansy Ho has decided to draft in help from the traditional Macau junkets that have done much to improve the VIP table performance of Wynn Macau, Sands China and Melco Crown Entertainment, following their relatively slow start in that market.
An industry source told AGI: “The Western marketing guys have had their chance. Now Pansy [Ho] is bringing in the local junket guys to help with marketing. And from what I hear, they have MGM’s blessing.”
Given the recent run-ins between MGM MIRAGE and the authorities in New Jersey over the thorny issue of Pansy Ho and just how close she is to her father, Dr Stanley Ho, and his VIP rooms and alleged triad links in Macau, one might have thought Macau junkets would be a delicate topic for the Las Vegas-based company. But the other overseas-founded operators have been using them for several years now in Macau without any negative feedback from their home regulators. As usual, the devil is in the detail of how it’s done. The traditional modus operandi of Dr Ho’s holding company, STDM, during the monopoly years was pretty much to hand over the keys to a VIP room at one of its casino premises and walk away, creating in effect a casino within a casino. As long as STDM got its cut of the action, it didn’t get too involved in the details. That kind of approach doesn’t wash in the modern era, especially among Western regulators with their focus on anti-racketeering, anti-terrorism and anti money-laundering policies.
Some of the people involved in the VIP marketing rescue mission for MGM Macau are, according to AGI‘s sources, the same SJM-linked people who rode to the rescue of Lawrence Ho’s Crown Macau (now Altira) when it teamed up with junket consolidator AMA back in December 2007. It’s difficult therefore to argue the case—as MGM MIRAGE did with New Jersey officials—that Pansy Ho is completely free of any influence from her father or her father’s business interests. But then, in Macau, who isn’t rubbing shoulders with someone with SJM connections?
MGM Macau certainly needs something to kick start its high roller operation. The USD1.25 billion property on the Macau peninsula has been performing well in the mass market—especially in slots. And a small number of slot VIPs are now dropping hundreds of thousands of US dollars on a single visit, but MGM Macau has been underperforming in the high roller table segment ever since it opened back in December 2007. And with around 70 percent of Macau’s gross revenues coming from VIP baccarat, that weakness has been holding back the property, keeping it bottom of the class in the revenue league table quarter after quarter.
In June, SJM had around 30 percent of Macau’s casino gambling market by revenue, with Sands China in second place at 22 percent, followed by Wynn in third place with 17 percent. Melco Crown Entertainment was in fourth spot with around 13 percent, Galaxy Entertainment Group was fifth with 10 percent and MGM Macau was trailing well behind with only 8 percent, according to figures that are an amalgam of data from Macau’s gaming regulator, the DICJ, and analyst estimates.
