Sands Singapore Under Pressure To Produce VIP Results

Posted: March 27, 2012 in Uncategorized

27 Mar 2012   Tue

Specialist Commentary on local casino news

Marina Bay Sands' PAIZA Club (VIP) under pressure to produce the required business volume, but with increased collection problems

Professional Ground Decoder’s viewpoints:

(1)  Without big junkets as the high roller business drivers, Marina Bay Sands has to put pressure on its VIP entity PAIZA Club to perform.

(2)  In order to bring in the targeted VIP business (volume), PAIZA teams have to go out and grab whoever across the border (i.e. mainly Malaysians and Indonesians) to patronise its VIP casino programs.

(3)  However, the norms for these Southeast Asian players have been that the casino must credit to them, before they agree to come.

(4)  Therefore, the outcome is:  MBS has to put aside a huge sum of credit money to develop this specific VIP market.

(5)  And therefore, after some time, the credit exposure risk increases…

(6)  To compensate for the credit loss, MBS has cleverly “redeem” a certain percentage (%) up front as “commission” from the chips draw-down.  So long as the players agree to the terms.

(7)  In essence, what MBS is doing for churning VIP business is no different from the Las Vegas practice of “Rebate On Loss”.  The casinos (in Vegas) have to give back rebates to players who loss all their chips as a form of discount in order to maintain regular customer accounts.

Let see it takes how long before MBS were to switch their VIP business development strategy when the credit losses are pilling up… However, if this approach is sustainable by larger volume of VIP business going forward, then MBS would continue with it.

 

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