Las Vegas Sands relies on Macau mass to offset VIP slowdown


las-vegas-sands-macau-mass-marketCasino operator Las Vegas Sands relied on its Macau mass market strength to overcome a slump in VIP gaming in the first quarter of 2019.

On Wednesday, Sands reported revenue of $3.65b in the first three months of 2019, a modest 1.9% rise over the same period last year. But operating income slipped 16% to $971m and net income tumbled 54% to $744m, although it should be noted that Q1 2018 benefited from a one-off $670m benefit thanks to Donald Trump’s generous US tax cuts.

Interestingly, Sands noted that its results were negatively impacted by a “nonrecurring legal settlement,” which appears to be a reference to the settlement in March of Sands’ long-running court battle with Richard Suen. The amount of the settlement went undisclosed at the time, but the Q1 report suggests Sands paid Suen around $96m.

Getting back to the results, the all-important Sands China division reported revenue up 8% to $2.33b, adjusted earnings up 8.7% to $858m while net income was flat at $557m.

Sands’ Macau operations relied heavily on mass market gaming, which reported win up 10.2% year-on-year to $745m, while the ‘premium mass’ win rose 15.9% to $774m, a new quarterly record. Tellingly, Sands didn’t offer up overall numbers for its VIP operations in Macau, although individual property numbers were less than impressive, reflecting the overall market trends in Q1.

VIP rolling chip volume was down 4.9% at the company’s flagship property the Venetian Macao, while the Parisian fell 14.8% and Sands Cotai Central was off by 19.2%. The Plaza Macao and Four Seasons Hotel fared better, with VIP turnover up nearly 47%, while Sands Macao improved 34%. Overall VIP revenue was down 14% from Q4, despite Q1’s Lunar New Year celebrations.

In Singapore, the Marina Bay Sands resort generated revenue of $544m, down 16.6% year-on-year as VIP turnover dipped 3.3% and VIP win rate slipped to 3.13% from the outsized 4.77% rate the property enjoyed in Q1 2018. Mass market table drop and slots handle also reported negative growth during Q1.

In Las Vegas, Sands’ two casinos saw overall revenue dip 1.3% to $471m thanks to declines in both the gaming and convention/retail/other columns. In Pennsylvania, the nearly-sold Sands Bethlehem enjoyed a modest 2.2% revenue bump to $137m.

Speaking of Sands Bethlehem, Wednesday saw Pennsylvania gaming regulators slap the operator with fines totaling $230k for 11 different instances of allowing underage patrons to gamble and consume alcohol, while Sands was also penalized for awarding excessive amounts of free slot play.

Sands boss Sheldon Adelson has long claimed that online gambling is evil because it offers access to children, while a brief glimpse of this site will uncover repeated fines of this nature imposed on Adelson’s land-based operations. Draw your own conclusions.