CASINO

Q3 lifts Las Vegas Sands, Galaxy Ent. Group

TAGs: Galaxy Entertainment Group, Las Vegas Sands Corp, Macau, Singapore

q3-2010-sands-galaxyQ3 numbers continue to roll in, and Las Vegas Sands (LVS) Corp. is happy to be wearing a little extra fat as we head into the winter months. Sands earned $168m in Q3, compared with a loss of $123m in the same quarter last year, while revenue was up 67%. LVS’ Macau operation produced $1.08b in revenue, a 28% gain over 2009’s tally, while Singapore’s Marina Bay (which wasn’t open in 2009) kicked in $486m. In a turnaround from the recent narrative surrounding Nevada, the Venetian Las Vegas and The Palazzo were also up some 27% over 2009, helped by an increase in table games win percentage from 12.2 to 17.1.

Thankfully, Hong Kong-listed Galaxy Entertainment Group (GEG) are happy to conform to the norm that Macau means ‘wow’. GEG posted a whopping 115% increase in Q3 earnings before interest, taxes, depreciation and amortization – the company’s eighth consecutive quarter of growth. Q3 revenue rose 88%. Meanwhile, GEG is promising that its new Galaxy Macau operation is on target to make its ‘early 2011’ opening date. Some analysts figure this is a tad optimistic, considering the abrupt ‘resignations’ earlier this week of Galaxy Macau’s COO and Snr. VP of Marketing.

Another ‘analyst’ taking issue with GEG is LVS chairman Sheldon Adelson, who believes GEG may be entangled in a ‘commission war’ in Macau – offering choice terms to junket operators to boost market share. Junket operators funnel high rollers from mainland China to the casinos, and also offer them credit, but since gambling debts aren’t recognized under Chinese law, collecting on these losses can be problematic. Galaxy spokespeople deny engaging in this practice, but Adelson, speaking on an earnings call, made the comment that “Under these arrangements, the operator may actually receive as little as 3% of gross revenue, but they use 100% of the gross revenue to determine their market share.” Meee-owww, Macau…

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