GGRAsia – No race to bottom for players by Macau ops: Galaxy COO

No race to bottom for players by Macau ops: Galaxy COO

Nov 15, 2023 Newsdesk Latest News, Macau, Top of the deck

“There’s something to” investor discussion regarding possible elevation in player reinvestment rates in the Macau casino market, said Kevin Kelley, chief operating officer (COO) Macau for Galaxy Entertainment Group Ltd, in comments to GGRAsia. Though the executive stated: “I don’t think that it’s a race to the bottom in terms of a price war.”

He added, referring to Macau’s six casino concessionaires: “I think everybody has amazing projects.”

Mr Kelley was speaking on Tuesday on the sidelines of the MGS Entertainment Show at the Galaxy International Convention Center (GICC), part of the Galaxy Macau casino resort.

All operators could be subject to “small anomalies in… performance,” that could make analysts “think or prognosticate in a certain direction,” stated Mr Kelley.

During third-quarter earnings season, several Macau concessionaires said – when asked by analysts – that they had not seen anything exceptional recently in terms of competition for mass-market players.

Brokerage JP Morgan Securities (Asia Pacific) Ltd had issued commentary on Friday that was bullish on the Macau casino market, despite a stock price correction that day among Macau casino names listed on the Hong Kong Stock Exchange, and the player reinvestment topic.

It described the latter as “industry jargon referring to ‘freebies provided to premium mass players’” as a percentage of each player’s theoretical ‘win’.

But the institution added that, as outsiders did not have access to each Macau operator’s data on their players, there was “no way” that outsiders could “accurately analyse the reinvestment rate”.

GGRAsia asked Mr Kelley about Friday’s market-wide stock price correction, which saw Galaxy Entertainment shares down 6.5 percent at HKD41.25 (US$4.29). The COO said that in general what he termed “big” participants in markets liked to “to try and create some updraughts, downdraughts in order to favour their own positions”.

He added: “We’re long on Macau, we’re fully committed [with] both feet firmly planted here…. You can see our Phase 4” at Galaxy Macau “coming out of the ground”.

Phase 4, scheduled to be completed in 2027, is to include “multiple high-end hotel brands,” as well as a 4,000-seat theatre, shops, and a water resort deck. “We will continue to adjust the development timeline in accordance with the market demand,” stated the company, in its third-quarter earnings update on November 9.

Asked about recent additions at Galaxy Macau of third-party VIP junkets, Mr Kelley told GGRAsia: “Some of the junket operators like the integrated resort facility [at Galaxy Macau]; there’s a lot more amenities for their customers to come and enjoy. So I think it gives us a bit of a competitive advantage.”