Sands China Bolstered Macau Leadership Last Year

While 2022 was a forgettable year for Macau’s gaming industry as gross gaming revenue (GGR) slid to multiyear lows, Sands China found ways to make the best out of a bad situation, gaining market share from rivals.

The Macau arm of Las Vegas Sands (NYSE: LVS) added market share across three key segments — mass, premium mass, and VIP — while other concessionaires in the special administrative region (SAR) struggled to keep pace last year.

For Sands investors, that’s an important fact for multiple reasons. First, the operator adding VIP shares against the backdrop of a collapsed Macau junket industry is impressive. Second, the company’s Macau bread and butter has long been mass and premium mass patrons, while some rivals depended more on VIPs.

Following the collapse of Macau’s junket industry, concessionaires’ ability to lure mass and premium mass bettors is crucial. Those players offer operators decent margins and often require less in the way of comps, meaning they spend on dining and rooms. Premium mass players typically play high-limit table games, though not at the stakes of their VIP counterparts.

Galaxy, Other Sands Rivals Lose Share

Due to the coronavirus pandemic and the punitive travel restrictions employed by the Chinese Communist Party (CCP), the past three years were unusual for Macau’s gaming industry.

Still, Santarelli noted that Galaxy was among the concessionaires that lost share as Sands China gained last year. In the case of Galaxy, a sluggish VIP demographic was one of the primary culprits. Melco and Wynn Macau also endured reduced market share in 2022.

Specific to Wynn Macau, analysts believe the operator has the ability to quickly shift from focusing on VIPs to an emphasis on premium mass players, which could drive higher market share as 2023 unfolds.

MGM, SJM Won Share, Too

In terms of won and lost market share among the six Macau concessionaires, 2022 saw an even split as three gained and a trio ceded share.

Beyond Sands China, the other operators in the positive column were MGM China and Daisy Ho’s SJM Holdings.

SJM’s performance is important because it’s the most financially fragile of the Macau license holders and has the most room for upside in terms of adding VIP clients.