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…