A new insurance bet recently implemented on some baccarat tables at MGM’s Macau integrated resorts, MGM Macau and MGM Cotai, is already being seen to enhance hold rates, according to a note from Citigroup.
While analysts George Choi and Ryan Cheung first wrote about the bet’s potential in January, shortly after its introduction, they observed its effectiveness in action while visiting MGM Cotai’s Supreme Room during the recent Chinese New Year holiday.
Referencing one particular premium player, the analysts explained, “This player placed a HK$20,000 bet on Banker. After the four initial cards were revealed, Banker had a total of 6 points [and] Player had a total of five points … this triggered the insurance bet option with the screen at the table notifying the player that insurance bet on a Player win was available at a 2.5 to 1 payout.
“This player placed a HK$8000 bet on the Player insurance … after the third cards were dealt, Banker became the winner. The player was paid HK$20,000 for his original bet but he lost his insurance bet – this means the player was effectively paid 40% less on his winning hand.
“If this insurance bet is perceived by players as an effective way to minimize losses, and gains popularity among players, this will enhance hold rates.”
Citi also confirmed that Chinese New Year appears to have been hugely successful for operators, with Choi and Cheung observing a new high in total premium mass wagers of HK$23 million, highest premium mass player count (777) and highest premium mass table utilization (48%) since Macau’s reopening.
They added that, while there were 16% fewer players witnessed than in a similar survey conducted during Chinese New Year in 2019, total wager of HK$23 million was 49% higher.
“This implies that the quality of the players we saw when we conducted our survey remains extremely high,” they wrote.
“The average wager per player of HK$29,624 dollars is 77% higher than that of Chinese New Year in 2019 and merely Hong Kong HK$9 less than October 2023’s HK$29,633.
“Based on the survey results, we expect the increase in Macau’s visitation during the Chinese New Year Golden Week did not materially dilute the quality of the premium mass players.”
