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AGB Part 1: Alidad Tash on winners of 2023, and expectations for 2024


Face to Face: Alidad Tash – winners of 2023, expectations for 2024

By Kelsey Wilhelm - January 12, 2024


The year 2023 proved a heady mixture of anticipation, relief, giddiness, and ever-present dread, as Macau fought its way back to its worldwide gaming crown. 2NT8 Limited’s Managing Director Alidad Tash points out the clear winners and losers for the year – highlighting underdogs such as MGM.


The strong results are likely to continue into 2024, as operators move to get their mix right, negotiating their way through the new mass-market normal.


We’re joined today by Alidad Tash, Managing Director of 2NT8 Ltd. Thank you for joining us in this new year.



Kelsey Wilhelm: It’s been an exciting time, you know, we saw that 2023 was finally the big ramp-up in particular for Macau. Could we delve into Macau a little bit? How did that go? Were you expecting what had happened within 2023?


Alidad Tash: Well, first of all, we started the year – we were not sure until January 8th that the borders were going to open. If you recall, we ended with a disastrous December 2022 in COVID. But suddenly, the gates opened January 8th, things looked good, and all the analysts went from pessimistic to more optimistic.


The challenge was that most analysts expected the growth maybe to return to 35 percent, maximum 40 percent, of what gaming revenues were in 2019, before the pandemic. And it was just astounding to see Macau did 63 percent: far higher than anybody predicted in 2023. So, it was a spectacular success story, given the very doom and gloom at the beginning of the year.


Kelsey Wilhelm: Well we were both here throughout that whole process. So, it’s even more exciting for us being based here in Macau to see that kind of growth and the resurgence of tourism and the optimism that comes along with it. Do you think that that optimism is then going to continue?


Alidad Tash: I’m more of an optimist for this year, there are some factors that may slow the growth down. It could be that the current economic downturn in China may spread to Macau. It is possible that there may be a little bit more of a crackdown on where this money is coming from. But I don’t see those factors as the likely ones.


I actually think that this resurgence of mass is going to carry us forward. The beautiful thing about it is that unlike before the pandemic, where Macau was – towards the end – something like 60 percent mass 40 percent VIP, now it’s something along the lines of 85, maybe 90 percent, mass which is a much healthier mix; which is what the government has been asking for. The government has also been asking for non-gaming. And that’s also something that’s very healthy there. The six gaming operators are really trying to become non-gaming operators. And actually, that’s very healthy.


Kelsey Wilhelm: It was a tough year for the gaming operators in general when they started off 2023 because they had just gotten the new licenses, you know, which started on January 1st, they had to go through that whole massive tendering process, not really always understanding exactly what the government wanted, there was the idea that Genting could possibly come in to compete with everybody else. And then finally on January 8th, once the licenses had already been implemented, then we started to see that there was a possibility for this to actually revamp.


Aside from what the analysts were thinking, just personally for you, were you expecting that it was going to grow that much and really see that much demand being here on the ground here in Macau?


Alidad Tash: No, I did not. As I said earlier, I don’t think that we were expecting it to be this good this fast. However, some of the operators –  one for our operator in particular – did prepare for this during the pandemic when everybody else was trying to cut costs.


They spent wisely. They retooled, they went and obtained the right group of sales hosts. They revamped.


It’s almost as though they knew that the starting gun of the race was going to sound off and they heard it or they knew it was coming. Everybody else was just kind of laying on the ground, with their shoelaces untied and these guys were up and ready. And the minute the government said “Go”, they started running far ahead of everybody else.


Kelsey Wilhelm: And that operator would be?


Alidad Tash: MGM, both in the peninsula – they cleaned up all those closed satellites, they basically scooped up all that business, which is why they’re so far head and shoulders above everybody else in the peninsula. And in Cotai, take their two years pre pandemic, they only opened February 2018, add that experience if three years of suffering like everybody else, and suddenly you had a little bit more of a more mature team ready to go. Their readiness got them off the starting gates faster than anybody else.



Kelsey Wilhelm: Well, it’s interesting also to look at the components of MGM: Pansy Ho is the daughter of the Macau gaming King Stanley Ho, and has quite strong political connections as well. But then the company was the only one who was able to get an increase in their table allocation. They moved up to 750 tables. How do you think that that impacted what happened over the course of the year?


Alidad Tash: There are multiple factors for MGM’s success. A lot of the people who kind of (got) left behind started looking for excuses. Instead of saying “Hey, they beat us, they beat us fair and square.” They started whining:  “Oh, we didn’t get tables.”


Well, getting tables wasn’t just a lucky draw. They decided, they evaluated the amount of money in terms of reinvestment and commitments that it’s going to cost, and they said: “Yeah, we’re gonna go and make the necessary reinvestment so that we could obtain it.” Other people didn’t think that through, they thought that this is not going to happen,  they didn’t spend the money. So that’s already a concept of strategy, not just a lucky draw.


It’s also not as superficial as the bubble tea and popcorn, which is (what) some of the very luxurious properties thought that was the case.


It was a combination of multiple factors, a young team and enthusiastic team, optimism about the future additional tables, throwing things at the wall and seeing what sticks instead of being very cost conscious, like some of the other properties are the ones a little bit more CFO driven, I think they are much more conservative.


This was not the time to be conservative. When the gates open. It’s whoever runs fastest that goes and accumulates the largest plot of land or whatever it is that you’re trying to fight off, instead of being too cautious. And I think some of the other properties were a little bit too cautious and they lost ground.


Kelsey Wilhelm: They do tend to be pretty much the only operator which does have a foot completely in both camps. They’ve still got the MGM United States link and then Pansy, who is coming from the legacy of the Stanley Ho era that was here in Macau. They did so well, despite having:  Sands has got like 1680 tables, SJM is 1,250 Galaxy has 1,000, MGM has only got 750 but they still managed to steal that market share in particular from Galaxy and SJM. Let’s look at the winners first. So we’ve looked at MGM, is there another winner that comes? And then let’s look at some of the losers who lost market share within 2023.


Alidad Tash: The biggest winner was obviously MGM. I think Galaxy did it did quite well. Galaxy did lose market share but the good news for Galaxy is that the market share their loss was in the least profitable of all segments. The most profitable segment in terms of profit margin, the amount of money you can bank at the end of the day is mass and premium mass then premium direct and then junkets.


Galaxy lost the most in junkets which is the least valuable. The typical junkets dollar –  only 10 cents,  10 percent, you get to get to keep. Basically everything else is spent in commission and taxes and other expenses. Not so far mass. Anywhere from 30-35 out to 45 percent, depending on how you count it.


So technically you could lose $4 million dollars in junkets. $4 million lost in junkets can be compensated with a $1 million gain in mass. And that’s what Galaxy did.


In terms of total revenue, they may have lost market share because they lost junkets. Junkets are not what they used to be. But collectively in terms of EBITDA, in terms of profit, in terms of all the other factors, they did quite well.


Kelsey Wilhelm: We don’t have the results yet for the fourth quarter individually from the operators. But we do know that overall December 2023 GGR was MOP18.5 billion, that’s up 433 percent yearly and actually down only 18.7 percent compared to 2019. Full year 2023 was MOP183.05 billion, down only 37 percent compared to 2019. That last quarter looks like it’s going to be quite good once we see the results coming out. What are your expectations for that?



Alidad Tash: Well, the (fourth quarter) results did not come out for the operators. But collectively what is absolutely amazing to me – I think one of the most interesting stats of last year is that – the fourth quarter of 2023 in terms of mass – forget junkets they’re dying or they’re in an intensive care unit – if you look at mass alone, the fourth quarter generated more mass than any quarter in Macau’s history (in terms of mass), even higher than the heyday in 2019 or the good old days in 2013, more mass was generated.


That is what’s so amazing about it, that’s why I think 2024 is going to be really good. Just take the fourth quarter and annualize it. Just take the fourth quarter and multiply it by four. That already puts you way ahead of the game before you add all the additional infrastructure, all these additional hotel rooms, all these other goodies that are going to come into play. So, I think that’s why I’m much more of an optimist for 2024.

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