Las Vegas Sands executive: 'She wins every day...and she
affected the numbers.'
By Ese Erheriene
A mysterious gambler whose winning streak was blamed by Las
Vegas Sands Corp. for denting profit at its newest property in
Macau is proving elusive.
Sands earlier this year said its $2.9 billion Parisian casino --
fronted by a half-size Eiffel Tower replica -- had made far less
money per mass-market gambling table than anticipated.
"One particular customer, she wins every day and she's doing
very well and she affected the numbers," Sands Chief Operating
Officer Robert Goldstein said on a January call with U.S.
investors. Mr. Goldstein didn't provide more specifics about the
customer or disclose the size of her winnings.
But on two recent visits to the Parisian, about three dozen
managers, security guards, dealers, cashiers and gamblers
interviewed by The Wall Street Journal said they hadn't seen or
heard of the lucky gambler beyond media reports that circulated
after Mr. Goldstein's remarks. Investors too have queried the
impact a single gambler could have.
"Mr. Goldstein was simply using an anecdote that came to mind
from his most recent visit to Macau," said Ron Reese, a spokesman
for Las Vegas Sands. The company declined to comment further.
Macau's gambling revenues have seen a small revival over the
past seven months, following a long decline triggered by a
corruption crackdown by the Chinese government. But Sands China,
the local subsidiary of Sheldon Adelson's Las Vegas Sands, hasn't
caught the same wind of fortune. It posted a 2.5% fall in revenue
and a 16% drop in net profit last year from a year earlier.
The Parisian, which opened in September, is the fifth property
opened by Sands in Macau, the only place in China where casinos are
allowed. The former Portuguese territory mushroomed from a
one-casino resort in the 1990s to become seven times bigger than
Las Vegas in terms of revenue by 2013, driven by rising numbers of
high rollers from China enriched by the nation's economic boom.
Officials in Beijing, which curbed money outflows from China
through Macau to stem corruption and prevent depreciation pressure
on the yuan, want the city to become more of an entertainment hub
like Las Vegas. Sands's latest resort is part of a wave of openings
in response to that edict and casinos are now fighting for
middle-class gamblers. Wynn Resorts Corp. spent $4.2 billion on
Wynn Palace, which opened in August last year. Fourth-quarter
earnings for Wynn's new Macau operation beat analysts'
expectations.
VIP gamblers made up about two-thirds of Macau's gambling
revenue in 2013, but that fell to 44% last year, according to data
from Union Gaming, an advisory firm.
The Parisian's "win percentage" on mass-market table games -- or
the ratio of revenue retained by the house from wagers -- was 18%
in the fourth quarter out of a total of $895 million. At The
Venetian, which is also owned by Sands, the figure was 25% out of
$1.7 billion. At Wynn Palace, the win percentage was 22% out of
$725 million.
"When you drop $900 million and you hold only 18%, you kind of
say to yourself you lost $25 [million to] $30 million right there,"
Mr. Goldstein said on the investor call. Mass table games generated
50% of Sands's profit in Macau last year, compared with VIP tables
which contributed 10%, according to company data. Bets at the
tables start at around $25, compared with more than $1,000 dollars
at VIP tables.
Mr. Adelson also weighed in on the issue during the earnings
call, admitting the company hadn't maintained a sufficiently high
hold rate.
"We estimate low hold in mass tables, particularly at the
Parisian, impacted our Ebitda negatively," he said, referring to
earnings before interest, tax, depreciation and amortization.
The probability of a gambler at the mass tables influencing a
casino giant's earnings is low, said Angela Han Lee, an equities
researcher at China Merchants Securities Co.
"It was very good marketing for the Parisian," she said of the
account of the lucky gambler. "I've got many people, including
clients, messaging me asking about it."
Other casino operators in Macau either didn't return requests
for comment or declined to comment on the gambler.
Investors worry the problem lies in the venue itself.
"I think the design of the Parisian is not helping," said Alex
Wong, director of asset management at Ample Capital Ltd., which
holds 2.7% of its $100 million portfolio in Sands China. "The
attractions are not [enough], and it's like a maze... There are
some shortfalls in the design." Mr. Wong added that the Parisian's
layout made it more difficult to navigate than other Macau casinos.
Sands China didn't respond to requests for comment on the
layout.
Sands has previously run into trouble over publicizing lucky
punters. In 2011 it removed webpages announcing winners at its
Marina Bay Sands resort after the Singapore government said it
would take action against the company. Casino operators there are
prohibited from publicizing the winnings of patrons.
At the Parisian's French-Asian Market Bistro restaurant,
assistant manager Jim Ung said the reports about "Lady Luck" -- as
the gambler is nicknamed -- had piqued his interest, so he had
asked colleagues at the venue about the woman. He couldn't track
her down.
--
Anjie Zheng
and Julie Steinberg contributed to this article.
Write to Ese Erheriene at ese.erheriene@wsj.com
(END) Dow Jones Newswires
March 04, 2017 02:47 ET (07:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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