LVS bullish on Macau
Las Vegas Sands’ eastern promise, Rank’s season to be cheerful, Lottomatica pre-close statement +More
Good morning. On today’s agenda:
Las Vegas Sands sees only upside in Macau.
Rank says it saw strong festive season trading.
Lottomatica and Sportech feature in earnings in brief.
Daddy’s gonna tell you no lie.
LVS sees Macau promise
Las Vegas Sands remains bullish on Macau with “the right customers” coming through the door.
Macau ramp on: Despite the Macau adj. EBITDA loss of $51m and FY22 operating losses of $792m (up 15%), CEO Rob Goldstein said: “If you’re looking for a negative comment on Macau, you’re in the wrong earnings call.”
The Macau losses were offset by the Marina Bay Sands in Singapore delivering $273m in adj. EBITDA.
But with Macau’s reopening expected to ramp up in H2, Goldstein said the recovery trajectory had been very promising so far.
“They’re spending on retail, gambling and it’s the right customers showing up,” Goldstein said. “It’s been really gratifying for us and typical of recovery situations: people who want it more are there first and it’s very encouraging
He added that Macau’s capacity and base mass market are “very different to the US, with opening hands starting at a couple of hundred US dollars”.
Planes, trains and automobiles: The ease with which visitors could access Macau was another factor that explained why the region was showing strong signs of recovery. Grant Chum, CEO of Sands China, said 40% of LVS’s Macau visitors had come from Hong Kong vs. 30% from mainland China since reopening on 8 January.
“Macau can support visitation via air, land and sea,” he said. “Let’s see how visitation develops, but so far the Chinese New Year pattern supports much stronger revenues (going forward).”
He added that it was important to not get too stuck on the visitation numbers and that the “overall quality of visitation during Chinese New Year had been very high” from its premium/mass target audience.
Goldstein confirmed the group’s ongoing interest in building an IR in Thailand, but discounted Japan and Korea.
No small time: Goldstein noted the group was looking at making a $4bn-$5bn investment in New York should it win its bid to build a downstate casino in Long Island. He said an LVS downstate casino “will be a full-blown resort with entertainment, restaurants, theaters – no small-time investment”.
New York represents “an extraordinary and unique opportunity” because it’s “a huge market with limited capacity”, he added.
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Rank’s happy Xmas
The casino to bingo group saw strong trading over the Christmas and new year period.
Vitality: The decent current trading came even as Rank reported half-year profits diving 83% to £4.2m. John O’Reilly, CEO, said the downturn in operating profits was “wholly” down to the performance of the Grosvenor casinos business, the health of which is “vital” to the group.
Group underlying revenue rose 2% to £337.4m, driven largely by a 9% rise in digital to £100.8m.
The company maintained its previous guidance that profits for the year would be at between £10m and £20m.
Summer loving: O’Reilly predicted that international travel trends boded well for a “much more positive summer” for Grosvenor.
Analysts at Peel Hunt said there was “not enough in today’s statement – barely six weeks since the previous one – to support an upgrade, but trading is encouraging”.
The ice storm: In bingo, O’Reilly noted the decline among its older cohorts. “The land-based bingo business is under considerable pressure,” he said. “Snow and ice is not good for bingo.” LFL NGR was down 20% on pre-pandemic levels in H12019/20.
Weak become zeroes: He noted there were “too many bingo venues in the UK”. “The strong venues are performing stronger and the weaker venues become weaker quite quickly.”
“Human connection is what makes us most happy and for many of our customers what makes them happy is their weekly visit to the bingo,” O’Reilly added.
Patient: On the UK government’s upcoming gambling White Paper, O’Reilly said the conclusion of the process “can’t come soon enough”. “I do expect publication in the coming week and then we need good progress on the secondary legislation,” he added.
He noted that the “most important” decision would be on the issue of machine harmonization.
Earnings in brief
Playtech: The company said in a brief trading update that the business has performed well in H2 and it expected EBITDA for the year to come in up 26% at £400m. FY results will be published on March 23.
Lottomatica: The acquisition of Betflag enabled Lottomatica to reach record Q4 handle and 11-15% EBITDA growth. Revenues increased 7% to €377m, while EBITDA is forecast to reach €115m-€119m.
GoldBet’s parent company said online divisions had accounted for ~46% of Q4 EBITDA growth.
It also highlighted the 17% rise in betting handle to a record €6.7bn (+11% excl. Betflag), with online divisions up 18% and sports betting up 17%.
FY22 revenues are forecast at ~€1.4bn and EBITDA of between €458m and €462m.
Lottomatica listing: Earlier this month reports emerged that Lottomatica had hired UniCredit to work on an IPO valuing the firm at €5bn.
Sportech: In its pre-close update Sportech said it expects FY22 adj. EBITDA to come in “ahead of market consensus”, with sports betting and food and beverage revenues performing strongly and operational costs reduced significantly. FY22 results will be published in April.
Monte-Carlo Casino parent company Société des Bains de Mer saw revenues for the nine-month period to the end of December rise 27% to €556.5m. The increase was achieved despite Q3 revenues falling 18.5% to €43.6m.
Analyst takes
Macquarie estimates that NFL hold came in at an above-average 11% for the week ending January 22. The divisional playoff games came in “under their respective total betting lines”, which generated strong margins on “game outcomes and single-game parlay bets”.
The analysts expect Q4 hold levels to be 50-100bps below the average of 8%, while the combination of SGPs, in-play, cash-out and lower promo spend will lead to ~20-30% NGR growth on a same-store basis.
Datalines
Mississippi casino GGR was down 5.5% to $211.5m in December, while sports-betting GGR was up 248.8% to $11.3m with handle rising 30.8% to $74.3m. Nebraska casino GGR increased 5.7% to $4.3m, Virginia casino GGR rose ~18% to total $53.9m, while New Hampshire sports-betting GGR increased 225% to $7.9m, with retail betting GGR rising 96% to $390k.
Newslines
The UK Gambling Commission has approved Allwyn’s £100m acquisition of Camelot UK Lotteries Limited from the Ontario Teachers’ Pension Plan Board.
AGS will supply its range of online slots to Caesars’ Sportsbook in New Jersey and Pennsylvania, while BetMGM has gone live with White Hat Gaming’s online slots suite in Pennsylvania.
Skywind-owned mobile gaming operator In Touch Games has been fined £6.1m by the UK Gambling Commission for social responsibility and money laundering failings, the third time the company has been fined in the past four years.
Diary date: XLMedia will hold an investor day on February 1.
In Compliance+More
The second issue of Compliance+More was sent earlier this morning. In this issue:
Skywind-owned In Touch Games hit with third UK Gambling Commission sanction.
VLTs complicate Indiana’s online casino bill.
Bet365’s Raynham Park deal in Massachusetts falls apart.
Swedish operators share intervention data.
What we’re reading
Skating on thin ice? NHL stars and gambling endorsements under scrutiny.
Calendar
Jan 25: Las Vegas Sands
Jan 26: Rank, BetMGM
Feb 1: Entain
Feb 2: Evolution, Penn Entertainment, Boyd Gaming
An +More Media publication.
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