An Interesting Quarter for Resorts World Sentosa

Posted: August 16, 2010 in Uncategorized

RWS 2nd Quarter Surge – Any Unknown Factor?
Contributed by:  Professional Ground panelists
16 Aug 2010

The most hot topic in Macau recently has been the fantastic second quarter performance of Genting Singapore stock price, based on its Singapore property Resorts World Sentosa.

The stunning figures reported by the press are:

(1) 1 million visitors in one single month to the RWS.

(2) S$860.8m in total gross revenue.

(3) Ebitda of S$503m.

(4) S$9.6m in daily sales.

Other than the broad brush numbers been reported in the press, there is no further division of gaming and non-gaming revenue, win/table/unit at casino, VIP vs Mass revenue, daily casino pax etc.

Unlike Macau, the Singapore casino regulatory authority does not release any clue on the statistic of casino performance.

In that light, let’s try to “figure” out what else have not been mentioned in the overall figures abovementioned. This will, at least provide an intelligent guess work on whether such “outstanding” numbers are really sustainable in the next few quarters and or in the longer term.

To put it simply, is the “pie” really that big and still has potential to growth?

In the relevant context, the reported numbers may be translated as follows:

(a) Assuming that 75% of the 1 million visitors to the Resorts World Sentosa would actually place some bets at the casino, it works out to 25,000 casino player pool daily.

(b) Assuming that the split between Slots/electronic games and Tables is 40:60 (40% play Slots, 60% at table games), it is an average of 15,000 pax actually betting on table games daily.

(c) Further to assume that the casino obtained  75% of total revenue of S$860m and the split between Slots and Table games contribution to gross revenue is 35% (Slots) and 65% (Tables). In that case the table games gross revenue would be approximately at S$419m and Slots having S$226m.

(d) Based on the above guess work, it is possible that the casino’s averaged daily Win per Table = S$11,750 (assuming 400 open-tables), with the Slots/electronic taking very high daily Win per Unit = S$1,666 (assuming 1,500 Slots).  This is possible as compared with Macau’s low Slots interest and over here, RWS claims 2/3 of casino players are from overseas.
(e) The only remaining question is “What’s the Split between VIP gaming and the Mass”?  Based on our hypothesis of what Macau’s average low-mass Win on table games these days, it is possible that RWS’s  VIP gaming gross revenue contribution is at least up to 55% of table games revenue if not more, and that is approximately at least of S$230m. It is assumed (not surprising) that some degree of “churning” of VIP turnover through huge credit by casino here, taking advantage of the low gaming tax regime especially on VIP gaming.

We opine that RWS’ 2nd quarter performance can be further summarized into,

* Casino contribution to overall topline is estimated at S$645m (75% of total income).  It could be more at S$689m (80% of total income).

* Of which it is probable that Slots are performing much better than table games betting, that it could achieve up to 35% of casino revenue and hence, contributes significantly to a great Ebitda margin of 58% overall.

* With the hypothesis that total table games revenue at S$419m with an average of S$11,750 Win/Table and therefore, overall Split of casino revenues would be approximately,

VIP Gaming  –  36%

SLOTS – 35%

Mass Table Games  – 29%

Daily per head contribution to casino (Mass gaming)  –  averaged S$138   (HK$745)

* At this rate, it can be safely concluded that RWS has taken up close to 60% of the total potential casino market share, leaving Marina Bay Sands desperately trying to recover from their shortcomings.

  1. Pete Giguere says:

    This is a great post and may be one that should be followed up to see what goes on

    A pal e mailed this link the other day and I’m desperately waiting your next write-up. Proceed on the world-class work.

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