Only in Macao could Sheldon Adelson report a 27% increase in profit and have it be called disappointing. For the first time in four years, Macanese action dropped last month, down 4%. Dollars to doughnuts, those missing patacas will turn up in the robust sports-betting sphere, which was expected to record heavy World Cup wagering. Las Vegas Sands was george enough to roll out a new bonus program for its employees but pushed them under the bus by partly blaming aforesaid bonuses for the lower-than-expected numbers. (Even so, industry-watchers expect Sands’ bonuses to force the other Macao concessionaires to follow suit or lose employees to Sheldon.)
Waving off competition, “Adelson, speaking on a conference call on Wednesday, attributed a 6 percent drop in VIP revenues due to factors including tighter liquidity conditions in China and the lucrative junket system, a slowdown in the country’s real estate market and caution due to an ongoing anti-corruption campaign.”
Adelson was understandably defensive, even brittle, noting that his numbers were up 12% in a market that was on up 5% in the quarter. Taking a now-familiar excursion onto Memory Lane, he said, “When I created my vision for the Cotai Strip, I was roundly criticized and belittled. Today, the market now knows that the future of Macao is the Cotai Strip.”
In addition to $3.6 billion from Macao, Sands booked $805 million from Marina Bay Sands (+9% and doing 22% ROI) and even Venelazzo provided a, by contrast, small contribution: $353 million (+2%).
None of this was enough to make Wall Street‘s day. J.P. Morgan analyst Joseph Greff led with, “Probably the best thing we can say about LVS’s 
2Q14 results is that they are in the rearview mirror.” Greff said they missed “fairly low investor expectations” with soft VIP hold partly to blame. The new, premium-mass Dragon’s Palace at Sands Cotai Central (above) “did not contribute much.” The St. Regis hotel tower proceeds apace but Parisian is tied up in red tape, of which there is no shortage in Macao.
Deutsche Bank‘s Carlo Santarelli “found limited silver linings” in the 2Q14 numbers. He was among those taken by surprise by the employee-retention bonuses. He characterized Venelazzo’s gambling revenues as “poor” and, noting recent good numbers on the Strip, concluded that this reflected well on MGM Resorts International instead.
It wasn’t the best day in Sheldon Adelson’s life, but he’s seen worse.
