Following last Thursday’s opening of Sands Cotai Central Phase 2A, we wanted to provide some additional thoughts following our observations after walking the casino floors on each of the past five days. What has become apparent to us is that the physical hardware of the Pacifica casino is quite differentiated relative to legacy Sands product and to the market in general, and what has become increasingly obvious is the growing presence of electronic table games (ETGs) throughout the Sands China portfolio.
Union Gaming Research Macau released the following note on 24th September:
Pacifica casino
We previously commented on the amount of supply housed within the new Pacifica casino at Sands Cotai Central. We would also like to touch on the physical attributes of the casino, which we feel is quite distinct now that we’ve had a chance to spend more time on the floor. The new casino has a much more modern feel to it, and is generally much brighter / more spacious than its peers. It generally isn’t compartmentalized like most Macau casinos (e.g. even if a traditional Macau casino doesn’t have physical segmentation via walls / columns / walkways, the ceiling often demarcates the casino floor) but is much more free-flowing. While it will take some time for the property to ramp and for its full potential to become known, we think this styling is likely to hold notable appeal – not unlike Galaxy Macau’s mass market floor (also quite different than traditional Macau casinos), which we believe will generate in excess of USD300mm in EBITDA this year (prior to contribution from VIP). We also believe the completion of the overhead air-conditioned walkway between Venetian and Sands Cotai Central should be a meaningful driver of cross-property foot traffic (per our proprietary Cotai foot traffic survey, we estimate that Sands China already has a 2/3rds share of Cotai foot traffic).
Electronic table games
As we’ve walked both of the casino floors at Sands Cotai Central (Himalaya and Pacifica), as well as the floors at Sands Macao and Venetian, it has become very clear to us that there is a significantly larger number of ETGs relative to our market-wide census conducted just a few months ago. In fact, we estimate that the number of ETG seats operated by Sands China has increased by 48% since May, from just over 900 seats to nearly 1,350 today. These incremental seats, when assuming an average of about 8 seats per traditional table game, would represent the equivalent of adding about 55 traditional live tables to the floor. We would expect to see more of these ETGs put into operation over the coming months – both at Sands China and at the balance of the operators (in fact, we note even MGM China is operating a small ~50-seat stadium installation). The dominant ETG player in Macau remains LT Game (Paradise Entertainment – 1180.HK, unrated), which has a 40% share of approximately 4,000 market-wide ETG seats, and virtually a 100% share of multigame stadium-style installations.
RelatedPosts
