Best Sunshine Live, “a small temporary casino with 48 gaming tables that opened last year in a duty-free mall on the U.S. Pacific territory of Saipan, generated more profit in the first half of the year than Melco Crown Entertainment, operator of four large casino complexes in Macau and Manila,” Nikkei Asian Review reports.
According to the source, Imperial Pacific International Holdings, parent company of Best Sunshine International, reported a half-year net profit this week of HKD837.3 million (USD108 million) on HKD3.99 billion in revenue from Best Sunshine Live, which cost $25 million to set up.
By comparison, the Review noted, Melco Crown “reported $70.6 million in net profit for the same period, while rivals Wynn Macau and SJM Holdings each earned HKD1.1 billion and MGM China posted a net gain of HKD1.3 billion.” Imperial Pacific’s Hong Kong-listed shares nevertheless fell 1.3 percent to 15 cents in trading Tuesday after the results announcement.
Some 95.7 percent of Imperial Pacific’s revenue came from Best Sunshine’s VIP gambling tables. Company officials said that around 500 VIPs from mainland China, Hong Kong, Macau and South Korea had paid 600 visits to the casino during the half-year. VIP betting volumes hit a high of $3.19 billion in April due to what an official called “one-off” visits by a couple “super VIPs.”
“We think we have already hit maximum,” said Shen Yan, president of global capital markets at Imperial Pacific, quoted by Nikkei Asian Review. With hotel rooms currently hard to come by in Saipan, especially for top-end visitors, Best Sunshine converted a few private homes for use as guest villas and also acquired five yachts. “The utilization rate of our [gaming] tables is very high,” Shen said. “Our accommodations – villas, boats, etc. – are almost full. We have no more room to grow.”
Best Sunshine’s peers in Macau are suffering from the opposite problem, with VIP tables going unused and hotel occupancy falling. Wynn Macau, MGM, SJM and Melco Crown each reported a decline in VIP betting volume of more than 20 percent in their latest results, noted the Japanese news outlet.
“Because of the yachts that [the VIPs] are staying on, the staterooms, having the private 24-hour chefs and other service, staying at the villas, this is what took [our] numbers to the next level,” he said. “It’s just the overall experience of fishing and scuba-diving and snorkeling and sky-diving, all of the things that go with a beautiful island,” said Mark Brown, chief executive of Best Sunshine International, credits his casino’s success with VIPs on its services in Saipan.
Another key element in Imperial Pacific’s profit performance, noted by Shen, is fewer taxes. While Macau casinos have to pay 40 percent of gross gaming revenues to the government, Best Sunshine pays no gaming tax though it does pay regular business taxes and other fees.
While most VIP players gamble on credit, company officials downplayed concerns they might have difficulty collecting on gaming losses. Shen told Nikkei that, “76 percent of Best Sunshine’s VIPs are backed by guarantors who have made cash deposits with the casino.” MDT
No Comments