Description

Bored of losing money on Alibaba and Tencent and looking to add yet another bet on the rising Chinese middle class and the benevolence of the Chinese Communist Party? Look no further. 

This name has been written-up on 13-Jaunuary-2020 by rc197906. It was a good write-up, but I felt that some additional context may be helpful to the VIC community. 

Summary: Galaxy is a land-based Casino operator in Macau in a competitively advantaged position with a multi decade long growth runway. Returns on capital are attractive and are very likely to stay that way with a meaningful opportunity to reinvest at those attractive returns, the balance sheet is net cash and management/ controlling shareholder are honest and shareholder friendly. On pre-Covid (2019) numbers, Galaxy trades at 14.4x EV/ EBITDA and 13.4x PE (excl. cash and investments). Mid-term (until 2025), I believe earnings will almost double compared to pre-covid on the back of capacity expansions; and I would expect the market to revalue the business in line with – already depressed – recent historical average of 15.4x EV/EBITDA for an expected 2.2x return (19% IRR over 4.5 years until Q1 2026 when the new capacity should be fully onstream). 

This opportunity exists because the market fears heavy handed regulation will greatly reduce Galaxy’s returns, but I believe Chinese authorities recognize that such an approach a) would only lead to migration of the industry into neighbouring countries reducing economic growth and Chinese Communist Party control and b) does not further the Chinese Communist Party’s goal of growing Macau into a world class tourism hub. 

Macau Long-term growth opportunity 

I think over the next 15 years the profit pool for Macau Casino’s will increase 5-10x. Why?

1. Increase in visitors from Mainland China 

1. Visitation has grown strongly over the last few years and in 2019 Macau received about 39 MM visitors. At first glance this seems in line with Las Vegas which received about 42.5 MM visitors (about 5.7 MM of which are international visitors). However, Macau has a much bigger potential pool of customers (i.e., the Chinese population) than Las Vegas. What is the potential upside to current visitation numbers? Let’s do a back of the envelope calculation: Las Vegas received about 37 MM domestic visitors in 2019 compared to a US population of 328 MM. Applying the same ratio of about 110k visits per 1 MM of inhabitants implies 157 MM annual visitors for Macau or about 5.6x the current visitation. Is that realistic? Not in the short-term, because the infrastructure is nowhere near the required level to handle this many people. However, from 2009-2019 visitation grew by about 6% annually and I think going forward higher growth numbers will be possible on the back of recent infrastructure investments (integration of Macau into China’s high-speed railway system and the new Hong Kong – Macau bridge) which are not reflected in the current visitor numbers. 6% growth implies 2.4x over 15 years and about 96 MM visitors in total and would mean that Macau becomes the most visited city in the world.

2. In addition, it is worth noting that pre-Covid 3-star+ occupancy rate was very high (averaging over 90%) which meant that on busy weekends you could not get a room leading many customers to stay in Mainland China and cross the border each day and counting each time as a visitor and thereby inflating visitor numbers. I cannot quantify the magnitude of this effect, but if you look at the number of hotels right across the border, I think there is reason to belief it is meaningful. 

3. Given the proximity, many customers pair a visit to Hong Kong with a visit to Macau. 2019 Hong Kong visitation was muted due to the political protests with a corresponding negative impact on Macau

2. Higher share of mass market 

1. Mass market gambling (definitions vary wildly, but typically gamblers who wager less than US$1,500 per day) is still a small share relative to Las Vegas: Mass market accounted for 42% vs. 58% for VIP pre COVID currently it is probably even more skewed to VIP. I have not seen comparable numbers for Las Vegas. However, one can get a sense by comparing average gambling spent per day pre-Covid of US$1,300 per day in Macau vs. c. US$150 per day in Las Vegas i.e. the vast majority of gambling in Las Vegas is mass market gambling. As Chinese consumers get more affluent, I would expect that mass market gambling will come to dominate Macau as well as middle class visitation increases. And indeed, over the last few years the mass market segment in Macau has grown much faster than the VIP segment. 

2. Why does it matter? The EBITDA margins of mass market are 2-3x (depending on the exact definition) higher than VIP gambling. Therefore, as the split shifts towards mass market, profitability increases (see Background on Macau Gambling for additional detail on the difference in profitability).

3. Higher proportion of non-gambling revenues 

1. Non gambling spent in Macau in 2019 was about 20% in Macau vs. 60% in Las Vegas 

2. The Macau government is very focused on increasing non-gambling revenues and some casino operators have commented that investments in this area are part of the license renewal discussions. Galaxy is for example currently building an event facility for concerts, conventions, etc. Moreover, there are plans to develop a neighbouring Island (Hengqin) in Mainland China which is expected to include a significant portion of non-gambling facilities as gambling is not legal there.

3. Over a 10–15-year timeframe, a doubling of this revenue stream from 20% to 40% seems possible given that it starts from such a low base.  

4. Longer average stay 

1. Average length of stay is about 1.2 days in Macau vs. 3.4 days in Las Vegas

2. Part of the explanation is the shortage of rooms as discussed above. However, the current non-gambling entertainment offering in Macau is very modest making it a somewhat challenged family holiday destination. With the growth of the non-gambling offering, this should change over time (and has changed already admittedly from a very low base over the last few years). I would not expect that average length of stay gets anywhere near Las Vegas levels with its world class entertainment even over a 10–15-year timeframe, but achieving half the level of Las Vegas or about 1.7 days per visit seems entirely plausible primarily on the back of increased room supply which is currently severely constrained. This implies another upside of maybe 25-30% (realizing that spending will not be linear to length of stay).

5. MICE (Meetings, Incentives, Conferences & Exhibitions) Opportunity 

1. Still nascent in Macau. In Q4 2019 only 0.7% of visitors were attending MICE events vs. about 9% in Las Vegas. Spending of MICE visitors is about 1.5x the spending of non-MICE customers

6. Lifting of Capital Controls 

1. Capital controls currently limit the spending by Chinese customers. The most noteworthy rule is the ATM withdrawal limit of 10,000 yuan per day (About $1,500 depending on the exchange rate). A relaxation of the limits would be a significant positive for casino operators and while there are some signs that a rule change might be coming (Government of Macau hinted at the possibility of the introduction of the digital yuan in Macau), the ultimate outcome is too hard to handicap (and could turn out to be net negative depending on how it is implemented).

Why Galaxy? 

1. Mass-market focus: As explained above, there are in my opinion reasons to be optimistic about the relative growth outlook of mass market vs. VIP. Galaxy, Las Vegas Sands (LVS) and SJM (post the recently newly opened casino) have the biggest share in mass-market 

2. Management: 

1. Galaxy is effectively run by Francis Lui. The 66-year-old son of the controlling shareholder Lui Che-woo. He is numerically literate (studied structural engineering at UC Berkeley), frugal (instead of using a helicopter to commute from Hong Kong to Macau - which is not uncommon among the local tycoons - he uses the public ferry that ironically is operated by a competitor) and rational. The LVS management team, which is very good as well, occasionally points to Galaxy as a competitor they respect and indeed they started out as partners in Macau before parting ways pre-financial crisis over investment levels and leverage 

2. Lui Che-woo, the controlling shareholder, cares about public perception as shown by his extensive philanthropic efforts. This by no means guarantees that he would not exploit minority shareholders but reduces the probability in my opinion

3. The Lui family owns about a third of Galaxy, Francis personally owns about 1.2% which at current prices is worth about $270 MM. This should create some alignment with minority shareholders 

3. Product: US backed competitors (LVS and Wynn in particular) have relied on capital intensive attractions to draw traffic essentially recreating US style properties in Macau. Galaxy has I think been very successful at creating similar traffic without spending the same amount of capital. How? Through a mix of tailoring the experience to local tastes and better execution than local competitors. Example: Dining is very important culturally in China. Galaxy has built a lot of restaurants into their properties (they operate about 120 restaurants for a current 4,420 room capacity, vs 150 restaurants for a current capacity of 12,000 room at LVS) which draw traffic as effectively as building attractions, but a at much lower capital outlay  

4. Leverage: Galaxy is net cash and at the height of the pandemic they said they could survive without revenues for five years (how many companies outside Silicon Valley can say that?) 

5. Significant Mid-term Growth Opportunities: 

1. Galaxy is currently expanding its capacity from 4,420 rooms to 7,420. The additional rooms are expected to come on stream by 2023/2024, with the first portion (450 all-suite Raffles) expected to open early 2022

2. Longer term Galaxy owns a substantial 2.7 square kilometre land bank in the neighbouring island of Hengqin, which the Macau government is planning to integrate into Macau (there were recent press articles that Hengqin, despite being legally in Mainland China, will effectively be administrated by the Macau Government, and many Macau tax laws will be extended to Hengqin. Note though that no gambling will be allowed in Hengqin)

3. Galaxy had a JV with a Filipino casino company to open a casino on the high-end tourism friendly island of Boracay, and had been issued a provisional license by the local gambling regulator. Plans were dropped after Philippine’s President Duterte opposed the plan, but that opposition has recently weakened, increasing the likelihood that the project comes to fruition after all 

4. Regional expansion: Galaxy is one of a few Asian casino operators with significant scale, strong relationships with Chinese customers and a good reputation (which is important in licensing processes). As such they are a desirable partner for future projects 

6. US-China Tensions: There are six main players in Macau. Three locally listed subsidiaries of US casino operators (Wynn Macau, MGM China and Sands China) as well as three local players (Galaxy, Melco and SJM). There are differences in valuation within each group, but no meaningful difference in valuation between the two groups in my view (if anything the US players trade at a premium). Given the rising US-China tension and Macau’s ability to disadvantage foreign companies in the licensing process if they so choose, I think a local player is preferable. In fact in might even benefit local operators if Chinese authorities decided to crack down on the US backed companies

Why are returns on capital high and should stay high? What is the moat?

1. Gambling is a commodity business in the sense that it is an undifferentiated service. However, it is unlike other commodity businesses as it is much harder to compete on price. Why? Because the price is baked into the game probabilities and changing the game would burden with customers with the necessity to learn a new game or at least a new variant of a game. There is also an element of self-selection. The numerically savvy customer who shops around for a good deal is much less likely to be a heavy gambler as they will appreciate the negative expected value of gambling (the Ed Thorps of this world are an exception in my view). 

2. Casinos cluster (readers may be familiar with Hotelling’s game in game theory), so attractively positioned real estate becomes a source of competitive advantage and abnormal returns 

3. Casinos these days have sophisticated CRM systems. This customer data is tremendous advantage vs. new entrants, as it reduces customer acquisition costs which are high in Macau (commissions to the junkets are around 40% of revenue after tax for VIP players for example)

4. There are some scale advantages in customer acquisition. Building attractions (which I would argue is a form of customer acquisition) that stand out is easier the larger your market share. Advertising in Mainland China is subject to some restrictions, so the name recognition of a large player is helpful in customer acquisition as well  

Valuation 

Base case: 

• Note that I tried to simplify the below discussion to make it mental math friendly. To do that I made two simplifying assumptions: 1. Galaxy owns a small non-Casino business for historical reasons (business produces building material and has effectively little local monopolies where it operates), which I lumped together with the casino business 2. I equate EBITDA to free cash flow. Sounds wild but note that the vast majority of taxes are above the EBITDA line, maintenance capex is undisclosed but likely to be modest as LVS disclosed US$425 MM per year requirement and has a portfolio that is bigger and much more elaborate (indoor Venice replicas, live size Eifel towers and floating infinity pools vs. relatively straightforward luxury hotel for Galaxy) and I would be surprised if Galaxy spent half that amount, and working capital is modest as well. In any case, if you want to flesh this out as a model it is fairly easy to do 

• Over the 5-years before December 2019, Galaxy traded at 15.4x EV/ EBITDA. That multiple has been depressed by political unrest in Hong Kong, and the Chinese Government’s crackdown on conspicuous consumption, and growing anxiety over the license renewal during that period, so I would argue that it is too low. However, as some form of political instability seems to be a feature of the region, 15.4x EV/ EBITDA seems like a sensible starting point 

• I believe that while it may take a year or two, eventually leisure traveling will resume on a comparable level to pre-covid 

• In 2019, Galaxy generated HKD 15 Bn of EBITDA while having 4,420 rooms or about HKD 3.4 MM per room. By 2025 Galaxy is expected to have 7,420 rooms operational. I assume that there is a linear relationship between number of rooms and profitability, which might seem like a bit of a leap, but a) most customers gamble in the hotel they are staying b) this implicitly assumes constant EBITDA margin and there is as discussed earlier reason to believe that margins should trend upwards over time and c) if you look at the last capacity expansion 2014 the relationship between EBITDA and hotel room was not exactly but approximately linear. Using this framework, I get to HKD 25.2 Bn EBITDA by 2025 with an EV of HKD 389 Bn at 15.4x EBITDA. To cross check CapIQ has consensus numbers until 2025 and I am 10% higher than those (but there are only two analysts in there and perhaps not the best ones) 

• Cash flow 2021-2025: Galaxy is currently EBITDA positive at 55% capacity utilisation for the main hotel complex. I assume no cash flow for 2021 and 2022 and for 2023-2025 I assume a return to pre-covid (2019) profitability which I believe is conservative given the pent-up demand and larger capacity vs. pre-Covid. EBITDA is roughly equivalent to free cash flow excl. expansion capex. Cash flow should therefore equal about 3x 2019 EBITDA or HK 45 Bn

• Expansion capex (new hotel capacity): Historically, Galaxy planned about HKD45-50 Bn for the capacity expansion. However, at the time this number was floated the plan entailed a larger number of rooms which has since then been scaled back by a quarter. However, Galaxy has not disclosed an updated capex estimate as far as I am aware. In addition, while construction has visibly progressed it is unclear how much they have spent to date. Let’s conservatively assume that HKD 50 Bn is the right capex number and that 100% is yet to be spent

• Gambling license: Galaxy paid the Macau Government HKD 16.9 Bn for the 20-year gaming license when it was originally acquired in 2002, which equates to about USD 100 MM per year. It seems likely that the Macau government will require a payment for the extension as well, but it seems likely to be lower as a) SJM and MGM licenses were recently extended by two years for US$ 25 MM per year and b) public comments by Macau government officials suggest that investment and increase of non-gambling revenues will be more important in the licensing renewal than financial considerations. However, let’s conservatively assume no reduction in licensing fee meaning a HKD 16.9 Bn payment or little over 1x EBITDA for a new 20-year license (in reality it is likely to be shorter in which case I would expect the licenses to be proportionally cheaper)

• Cash & investments: As of 30-Jun-2021 Galaxy had HKD 23.7 short term investments, HKD 22 Bn in long term investments (mostly bonds + a 5% stake in listed US casino operator Wynn Resorts) and HKD 11.8 Bn in debt i.e. HKD 33.9 Bn assets net of debt 

• Other: The 2.7 square kilometre land value and the JV for a development of a casino in the Philippines have substantial value in my opinion, but it is hard to pinpoint timing and magnitude, so I value them at zero 

• Summary: Fair enterprise value of HKD 389 Bn, fair equity value of HKD 401 Bn for a per share value of HKD 92 which is about 2.2x the current price (which equates to an IRR of about 19% over 4.5 years until c. Q1 2026)

Upside case 

• The implicit assumption in the Base Case is that revenues are a function of the number of rooms while EBITDA margin remains constant. However, as I outlined above there is reason to believe that over time margins will drift upwards from disintermediation of junkets and faster growth of the higher margin mass-market segment. Pre-Covid mass market was 42% of gross gaming revenue in Macau vs. 58% for the VIP segment. The proportion of both segments move slowly, but if you assume 0.5% shift per year (which is consistent with the experience of 2017 to 2018) then you would expect to see mass market gain 3% by 2025 compared to the 2019 base line. That 3% of revenue has 2-3x the EBITDA margin of the VIP segment 

• Realistically, expansion capex is very likely lower than assumed in the Base Case due to the spending to date. Cash flow is likely to be higher due to pent-up demand and 2022 does probably not need to be written off from a cash flow perspective either. I could see both effects contributing HKD 40-50 Bn in cash flow cumulatively until 2025 under more optimistic assumptions 

• The real game changer however could be the development in Hengqin or a regional expansion, but it is hard to come up with any sensible numbers given how little is known about Galaxy’s plans 

Downside Case 

• The Macau Government could decide that it wants to curtail gambling in Macau. How could that look? Perhaps like 2016 when similar curtailment measures were implemented. At that point EBITDA was HKD 9.6 Bn. Let’s assume the same for 2025, which seems like a harsh assumption to make because capacity in 2025 will be almost twice the 2016 level and the mix between mass market and VIP should be much more favourable. How would the market value Galaxy if the view was that these difficult conditions would persist indefinitely? At a 0% growth rate and an assumed cost of capital of 10% would imply about a 10x EBITDA multiple (EBITDA being essentially equivalent to free cash flow). At that lower level of profitability cash flow 2023-2025 would be HKD 28.8 Bn meaning that HKD 21.2 Bn of the construction costs for the capacity expansion would have to be funded from cash reducing net cash and investments to HKD 12.7 Bn for a fair value of equity of HKD 108.7 Bn or about HKD 25 per share. Note that I assume that the Macau Government would not in addition extract a payment for the gambling license in light of the lower profitability. 

What is the market concerned about? What are the risks? 

1. Tutoring was yesterday, Casinos are next 

1. Concern: The Chinese Government will shut down/ significantly curtail casinos in line with recent actions in the education space 

2. Comment

1. If the Chinese government did shut down the Macau casinos, gambling volume by Chinese customers would likely only marginally decrease over the long term as it would migrate from Macau to say the Philippines or some other neighbouring jurisdiction. This would also mean that gambling is being transformed from a China internal redistribution of capital (from players to the Macau Government to the casinos and their employees) to a capital outflow; and in addition, reduce the Chinese Governments control which seems all important recently 

2. Macau is perceived by the CCP as a “good student’ compared to Hong Kong. There have been no protests, calls for more democracy etc., so there is also a desire to reward Macau for its good behaviour. Shutting down Macau’s only industry is not exactly furthering that goal 

3. There is probably some desire to shield the “local champions”. I would be much more cautious with the US casino operators (Wynn, LVS, MGM)

2. Recent Macau Government announcement on changes to the legal framework 

1. Concern: On 14-Sep-2019, the Macau Government announced a) a requirement for preapproval of dividend payments by casino operators to ensure sufficient cash to fulfil license requirements (i.e. invest) and b) the government will appoint permanent supervisors to each of the casino operators to ensure compliance with license requirements. As a result, market participants fear that operators will not be able to return capital and will be forced to make uneconomical investments 

2. Comment 

1. Even before this announcement the Macau/ Chinese government had plenty of tools (license renewal process, gambling regulatory frame, visa restrictions etc) to force any capital allocation policy they deemed desirable on operators. The existence of these new tools is therefore a non-event 

2. The announcement only matters if you believe it reveals the intention of the Government to act against the economic interests of operators. I don’t think so. Why not? Same arguments as the previous point on tutoring vs. the casinos 

3. Macau government can expropriate Casino shareholders 

1. Concern: Upon gambling license expiry/ revocation casinos must hand over gambling equipment to the Macau Government without compensation. It is not clear whether this would just include slot machines etc. or the entire hotel, but I would assume that in a worst-case scenario full expropriation without compensation is within the law and a possibility

2. Comment: Expropriation is very unlikely in my view. The Macau and Chinese Governments have ambitious plans for the expansions of Macau. These plans require capital and a lot of it. Expropriating any of the casinos would making raising capital very difficult and is therefore not in anyone’s interest. 

4. New licenses will be less favourable 

1. Concern: New licenses will be short, uneconomical for casino operators. Additional licenses may be added 

2. Comments 

1. Term: It is likely that the new licenses will be shorter than the previous 20-year licenses. While I think the certainty of long licenses is desirable, shorter licenses should be manageable esp. if there is some clarity around how extensions work which will reduce uncertainty 

2. Number of licenses: Over time additional licenses will be granted. Genting, the Malaysian casino operator, for example has no current operations in Macau but owns a significant land plot in Macau. When and how many, no one knows.
   The restricted number of licenses is clearly beneficial to the current license holders making the introduction of additional licenses a negative. However, as the example of Las Vegas shows even without restricting new entrants through a licensing regime, existing casinos can be very successful. I think the same is true for Macau esp. considering how long it will take new entrants to build sufficient scale 

3. Less favourable terms: Similar argument to the point on expropriation above. In addition, the Macau Government is well funded and gambling taxes are already among the highest in the world 

5. Investor perception has changed permanently 

1. Concern: Following the recent crackdowns the market will permanently value the business lower 

2. Comment: Entirely possible, but unlikely. There have been previous episodes where Macau casino’s fell out favour (SARS, the 2016/17 government crackdown on graft and conspicuous consumption). Each time the concerns faded, and the market revalued the businesses in line with historical norms. I believe this time is no different 

6. Governance and fraud concerns 

1. Concern: Many Hong Kong stocks have governance issues and heightened fraud risk. Part of the reason the market trades cheaply 

2. Comment: 

1. The Lui family, the controlling shareholder, cares greatly about its public perception as evidenced by the significant philanthropic contributions reducing somewhat the probability of governance issues 

2. The Macau gambling regulator audits casinos for tax purposes and publishes audits (in Portuguese) creating an additional layer of checks compared to unregulated businesses 

7. Galaxy does not own the real estate 

1. All land in Macau is leasehold, mostly on 50-year terms from the date of the handover of Macau from Portugal to China (1996) this does include private residential properties as well 

2. No one knows what will happen in 2046. It is possible that the Chinese government will take possession of all property in Macau as would be their right. However, it coincides with the likely integration of Macau into Mainland China (the promise the Chinese government made to leave Macau a separate territory expires concurrently) and I think the Chinese Government will likely be keen to avoid the political disruption a blanket expropriation of real estate would cause. I therefore think the base case is that real estate ownership rights will be extended at the time of the handover perhaps for a nominal fee. Note that Galaxy depreciates real estate incl. land straight line to 2046. If an extension of ownership rights as outlined came to pass, the D&A recorded by Galaxy would be too high and current profitability understated 

8. Online Gambling 

1. Concern: Online gambling is legalised in China and takes share from land-based casinos in Macau

2. Comment:

1. Legalizing online gaming seems not to fit well into the current policies of the Chinese Communist Parties. Online gaming – playing online i.e. without monetary stakes, think Fortnite – has been branded “spiritual opium” by government owned Chinese newspapers. If anything, online gambling should be perceived even worse 

2. If, however online gambling legalization were to materialize I would consider this thesis at least partially broken 

Appendix 

Background on Macau Gambling 

Most investors esp. US based investors use “Chinese version of Las Vegas” as their model for Macau and that is fine up to a point, but there are differences between Las Vegas and Macau which are important to understand:

1. Regulation of gambling in China

1. Gambling with very few exceptions (a state-run lottery, some sports betting in Hainan) is illegal in China. Online gambling is illegal (but there are some offshore operators esp. in the Philippines). Gambling debts are non-enforceable by law 

2. Capital controls limit the daily amount a Chinese player can withdraw at an ATM in Macau to about US$1,500. To circumvent this limitation many customers play on credit. Given that you cannot enforce gambling debts intermediaries are often involved called “junkets”. The junkets lend players cash in Macau, organise trips to Macau and get a commission from the casino based on how much “their” customers gamble. Many of the junkets are rumoured to be controlled by the Chinese mafia (given that gambling debts are unenforceable the ability to be highly “persuasive” is important) and while I have no insight into whether that is true many of the executives associated with the junkets are unsavoury.  Some of the junkets run their own gambling operation inside of established casinos and pay the casinos a share of the revenue or a rent. There has been a recent push by the Chinese government to reduce the importance of junkets and criminalize some of the practices

2. Macau is physically small: 115 square kilometres vs. 367 square kilometres for Las Vegas while having similar sized populations. This land scarcity increases the incumbent real estate advantage 

3. VIP gambling in Macau is much less profitable for casinos than mass market: I am not aware of any of the operators breaking out profitability by VIP vs. mass market customers. However, there are plenty of sell-side estimates around. I have seen Morgan Stanley estimate VIP EBITDA margins at 10-15% vs. 30-40% for mass market. Why is the difference so big? The key reason is the commission that goes to the junket which is around 40% of the gambling revenue less taxes. In accounting terms, that means that for every dollar a casino records as revenue (players losses – player wins), 40 cents go to the government as tax, of the remaining 60 cents, the junkets get 24 cents leaving 36 cents for the casino operators. However, those 36 cents support staff salaries, operating costs etc. implying relatively low margins for the casino operators 

4. Gambling licenses 

1. Gambling licenses in Macau have a fixed term. The current licenses which were granted for 20 years expire in 2022

2. The previous licenses had to be acquired for a one-time payment. The terms of the new licenses are not clear yet, but it is very likely that the term will be shorter than 20 years 

5. Taxes in Macau are high vs. the rest of the world 

1. Gambling taxes are at 39% of gross gaming revenues in Macau vs. I believe 6.75% in Las Vegas and importantly while unenforceable gambling debts are excluded from the calculation in Las Vegas they are not in Macau (which is part of the reason casinos engage intermediaries)

Catalyst

Capacity expansion (2024)

Clarity on license extension (2022)

Return to pre-Covid acivity levels (2023)