UBS said it has trimmed its second-quarter forecasts for EBITDA at Las Vegas Sands and MGM Resorts because of low VIP volumes and hold.
The firm said gross gaming revenues gained 6 percent in the second quarter compared with the year-ago period, but are down 11 percent from the first quarter. It expects VIP volumes to be down 6 percent year-on-year, while mass revenues forged ahead with growth of 33 percent from a year ago. It noted however, that premium mass is not entirely insulated from the weakness in the upper tier of the market, and that sequentially mass revenue probably declined 2 percent from the first quarter.
Las Vegas Sands is likely to have lost market share across all segments, with a shift of about 60 tables in Dragon Palace in early May to accommodate the opening of a new premium mass area, likely to have proved disruptive.
The company is likely to report the highest year-on-year EBITDA growth, up about 30 percent, UBS said.
Both Wynn Resorts and MGM had a “tough” second quarter. Wynn is likely to report a gain of 18 percent in EBITDA, with mass results improving, but the biggest sequential drop in VIP volumes.
MGM is likely to report a 4 percent gain from last year in Macau EBITDA, while sequentially it will see a drop of 11 percent. The company remains focused on maximizing yield, for example deploying five-seat baccarat tables in some areas, it said.
MPEL is likely to report in line with overall industry trends, while Galaxy Entertainment has been taking market share in VIP, it said.
UBS said the weakness in VIP volumes may be accelerating a shift to the mass market, with operators moving about 200 tables from VIP sectors, or 3 to 4 percent of total table capacity, so far this year.
LVS’s second-quarter EBITDA estimate was cut to $857 million from $885 million, MGM goes from $245 million to $229 million, while Wynn was raised to $342 million from $331 million.