Afternoon, welcome to Las Vegas Sands Corp. second quarter 2013 conference call. I will now turn the conference over to Daniel Briggs.
Thank you. Before I turn the call over to Mr. Adelson, let me remind you that today's conference call will contain forward-looking statements that we are making under the safe harbor provisions of federal securities laws. The company's actual results could differ materially from the anticipated results in those forward-looking statements. Please see today's press release under the caption Forward-looking Statements for a discussion of risks that may affect our results. In addition, we may discuss adjusted net income and hold adjusted adjusted net income, adjusted diluted EPS and hold adjusted adjusted diluted EPS, and adjusted property EBITDA and hold adjusted adjusted property EBITDA, all of which are non-GAAP measures. A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures are included in the press release. Please note that this presentation is being recorded.
We also want to inform you that we have posted supplementary earnings slides in our investor relations website for your use. Finally, for those who would like to participate in the Q&A session, we would ask that you keep one question and then one follow-up question. With that, let me please introduce our Chairman, Sheldon Adelson.
Thank you, Dan. Good afternoon, everyone, thank you for joining us today. We're extremely pleased with our financial results, which continue to reflect our outstanding strategic positioning, strong execution, and position of leadership in integrated resort development and operation. We delivered strong growth in revenue, cash flow, and earnings per share, with hold-adjusted diluted earnings per share increasing 41.2% to reach $0.72 per share. Our results continue to reflect strong execution against our core principal strategic objectives. We're both confident and evident successful execution against these strategic objectives will both extend our industry leadership and maximize shareholder value. I will provide a brief progress report on those four objectives before we move to your questions. Our strategic objectives are, first, maximizing organic growth from our property portfolio. Second, deliver additional growth by making new investments in our current markets.
Third, identify and nurture new integrated resort development opportunities in geographic areas outside our current markets. Fourth, continue to increase the return of capital to shareholders. I like that last one a lot. It's a personal favorite of mine. Focusing on organic growth, we again delivered an all-time record performance in Macau, where our industry-leading investments and the unrivaled scale of our properties have again enabled us to deliver robust, market-leading growth in the world's largest and most profitable gaming market. We welcomed a record 14.6 million visits to our Macau properties in the quarter, an increase of 40% compared to the second quarter of 2012. Adjusted EBITDA across our Macau property portfolio expanded 53.2% to reach a record $657.2 million. What's that? Must be a ghost. Adjusted EBITDA across our Macau property portfolio expanded 53.2%, to reach a record $657.2 million.
Our mass table win in Macau for the quarter was up a whopping 61.1% to a record $930 million. Our growth for the quarter was twice as fast as the Macau market in the most important and most profitable segment in Macau. Also impressive is our rolling volume growth in Macau, which was up 25.7% this quarter to a record $42 billion. That represents VIP market share of approximately 17.4% of Macau market rolling volume, compared to just 14.8% one year ago. Our growth for the quarter was nearly two and a half times faster than the Macau market in the VIP segment. The Venetian Macao delivered the strongest quarter in the property's history. The Venetian Macao leads the Macau market in visitation, business and leisure tourism field. Last but not least, the generation of EBITDA, which reached a property record $361 million in the quarter.
The Venetian's non-rolling chip drop increased 56.1% to reach a market-leading property record of $1.59 billion for the quarter. Sands Cotai Central continues its steady rise, with strong growth on display across the board. Our mass table slot and ETG win per day increased over 158% this quarter compared to the period last year, reaching over $3.51 million per day. Visitation to Sands Cotai Central exceeded 40,000 visits per day during the quarter, an increase of over 142% compared to the year-ago period. EBITDA generation is also improving meaningfully, and despite low hold, reached $146 million for the quarter. Had we held normally at Sands Cotai Central, the property would have generated approximately $170 million in adjusted property EBITDA during the quarter. Turning to Marina Bay Sands in Singapore. Rolling volume was up over 24% compared to last year's second quarter, reaching $14.4 billion.
On a hold-adjusted basis, we produced EBITDA of $396 million this quarter at Marina Bay Sands, which was up about 6% compared to the same quarter last year. Turning to our U.S. operations. Hold-adjusted adjusted property EBITDA was up nearly 8% in Las Vegas and grew nearly 10% in Sands Bethlehem. We're pleased to be generating growth in both the largest gaming market in the U.S., Las Vegas, and the fastest-growing gaming market in the U.S., Pennsylvania. Let's turn to strategic objective number two, development growth in our current markets. The Parisian Macao, our fifth integrated resort property on the Cotai Strip, and our sixth in Macau overall, is now under construction. Piling work is now well underway, and the substructure work in the podium and hotel tower areas has commenced.
Based on our current construction schedule, and subject to timely government approvals, we are targeting the opening of The Parisian Macao for late 2015. We're extremely enthusiastic about The Parisian, which will be a themed, aspirational destination integrated resort featuring replicas of iconic Parisian landmarks, including a 50% scale replica of the Eiffel Tower. The Parisian's offerings have been designed to appeal to a wide range of consumer tastes, including the business and leisure traveler or family that is visiting Macao's attractions for the very first time. The dining, shopping, and entertainment offerings of The Parisian reflect the tremendous experience and the lessons learned in our 10-plus years of integrated resort development and operation in Macao.
The Parisian Macao will be seamlessly integrated with our other Cotai Strip properties, The Venetian Macao, the Four Seasons Macao at The Plaza Casino, and Sands Cotai Central, increasing the property portfolio's critical mass and business and leisure tourism appeal while enhancing the total returns of our Cotai Strip portfolio. We are also advancing our plans to sell shares in a co-op fashion to prospective buyers of Four Seasons-branded properties in the apart-hotel on the Cotai Strip. On June 5, 2013, the latest approval in the development process was published in Macao's official gazette. The eventual sale of apart-hotel units has always been a fundamental component of our Cotai Strip development strategy of monetization of core assets. Moving on to strategic objective number 3, the development of integrated resorts in new markets and geographic areas.
In Asia, activity levels in Japan have increased, and we are pursuing the potential for integrated resort development with great enthusiasm and optimism. Korea has also shown increased activity, and we're looking forward to the potential development opportunity. We've also been investigating opportunities in other parts of the world. With respect to Madrid, there are a variety of steps left in the development process. Any investment would be subject to the receipt of government approvals and the finalization of aid grants and incentive package that would enable investment as well as success in a competitive tender process. I have a vested interest in pursuing only the highest-value projects that will maximize shareholder returns. As the company's largest shareholder, my interests are aligned with yours. Finally, let's review strategic objective number 4, the return of capital to shareholders.
We have now returned nearly $4.5 billion of cash to our shareholders through dividends and stock repurchases over the last 18 months, including over $3.7 billion to Las Vegas Sands shareholders and nearly $700 million to the non-LVS shareholders of Sands China. It is gratifying that we have built our businesses and expanded our cash flow to the degree that we're able to return to the shareholders such substantial sums while retaining a strong balance sheet and ample liquidity to fund future growth opportunities. We have every intention of increasing the recurring dividend at both Las Vegas Sands and Sands China in the quarters ahead as our business and cash flows continue to grow. We are also pleased that the board of directors of Las Vegas Sands authorized on June 5, 2013, a $2 billion stock repurchase program
Repurchase program will complement our previously established recurring dividend programs at Las Vegas Sands and Sands China. It will provide another avenue for the company to return capital to shareholders. I'm pleased to report that we're able to complete the establishment of the program during the quarter to repurchase 883,000 shares of stock at an average price of $52.74 per share, returning nearly $47 million to shareholders. We believe the repurchase program will enable the company to enhance shareholder returns in the future. In summary, we are executing on all four of our strategic objectives. I also wanted to point out that our leadership team is doing an outstanding job across the board. With our industry leadership, outstanding strategic position, strong operating momentum, and the disciplined, experienced leadership team we have in place to execute our strategy, I couldn't be more confident about our continued success in the future.
Let me turn the call over to the operator to begin our Q&A session.
At this time, if you would like to ask a question, press star, then the number 1 on your telephone keypad. Your first question is from Shaun. Your first question is from Shaun Kelley with Bank of America. Please go ahead with your question.
Shaun. Hi. Good afternoon, guys. Just wondering if maybe you could start with either Rob or Sheldon giving a little bit more color on the ramp-up that you're seeing at Sands Cotai Central. It seems like the VIP side is very strong there. You saw some pretty big sequential growth in mass as well. We did notice that the hotel occupancies dipped from last quarter. How you see the hotel side ramping up, and what you're seeing out of the player behavior there would be really helpful.
Sure, Shaun. It's Rob. I'll just discuss the gaming issue for a second. Really pleased where SCC is going. The big driver, obviously, was mass tables. We grew from $30 million Q2 2012 to $114 this quarter, so terrific growth there. We're seeing, obviously, the VIP segment is leading our portfolio, so very positive there. Sheldon referenced on his opening remarks, the lack of hold percentage, which is actually evident across the whole group of segments in SCC, so we actually hold adjusted about $170. We've always felt this is a $1 billion-dollar property. We think that run rate will be achieved at some point. I'm not sure this year, but certainly in 2014. Very, very pleased where it's going. The cross traffic between SCC, The Venetian, continues to build.
I think SCC, as we've always said, it's built for the best market segment in Macau, that being the mass market. That mass market segment is fueled by sleeping rooms. We've got 6,000 keys, along with The Venetian. We have 9,000 keys between The Venetian and SCC. Really bright days ahead in the gaming piece of this building. Really, really pleased, especially about the mass ramp there. Across the portfolio, our mass ramp grew from almost. It went from 577 last year across all four properties to 920 this year. I think the staggering growth in Macau continues, and we're the leaders in the mass segment. We're approaching $4 billion of top line there. Very pleased where SCC is going. Very pleased about the future. Think the rooms drive it. As you get more retail occupancy, that'll help the gaming piece as well.
I guess my follow-up would be to maybe switch gears on the strategic side. You did get another approval for moving ahead with the Four Seasons co-op sales. Could you just talk a little bit about possible milestones behind that, and then also what that might mean for development of the St. Regis or perhaps the last set of the fourth tower over there at Sands Cotai Central? That would be really helpful.
That fourth tower is the St. Regis, and that's a combination of a few hundred rooms, about 450, 500 rooms, plus about 300 apartments. The government has informed us that once the precedent is set with the apart-hotel. By the way, the St. Regis, we've been sitting with an approval to go forward with the St. Regis. Since we didn't have the approval to sell the apartments on a co-op or any other scheme, we decided not to go. We still have the building permit. I don't know what you mean by milestones leading up to that.
What I mean by, I guess what I'm getting at is, what's next? Can you guys begin to pre-market condos at the Four Seasons right now, or do you need any additional approvals before you can do that?
Oh, no, we're all set. We're lining up the project management and the sales team, and we don't need any further approvals. There are some minor things to resolve, such as how many of the apartments are going to be put in a rental pool, or the alternative, how many
Will be held aside to rent. Those are minor negotiating points that we have to finalize with the government. However, as far as being able to sell them, we have that approval, and it's been gazetted.
Thank you very much.
Thanks, Shaun.
Your next question is from Joe Greff with JPMorgan. Please go ahead with your question.
Hello, everyone. Obviously, a big topic of late for all of us on this call has been concerns about a slowing macro picture in mainland China and whether or not that's going to have some sort of impact in Macao. It doesn't appear to have any impact on results in the 2Q in Macao or Singapore for that matter. Can you talk about what you're seeing more recently, if there's any change in consumer behavior, any kind of impact, any changes in junket liquidity, I'll keep it as broad as that and have a follow-up. Thank you.
Let me tell you, the consumer behavior is going in the right direction as far as we're concerned. There are more people coming in spending more money. The macro view about China is not affecting the visitation to Macao. If anything, the visitation is increasing. Well, not if anything. I can't give you a projection, let me leave it at that. If anything, if there's any impact, the visitation is increasing. This has been going on for nine years, since 2004, since we started. Every time there is some journalist decides to say something in the market and writes an article, typically without having the authority from the central government to state about how many visits one individual is allowed, or how many individual IVS, individual visit schemes. Everybody starts to scratch their head and wonder if there's anything to it.
To our knowledge, if there is anything to a macro slowdown in China, it is not affecting Macao as far as we're concerned. It's just the opposite of what people are suggesting.
Joe, to amplify Sheldon's comments, if you turn to page 11 in the investor deck. This slide illustrates SCL's year-on-year growth in the most important segment in Macao, mass table games. SCL has grown 60% in the last year to $920 million from $577 million a year ago in this segment. The margin is still mid-40s, 45%, 46%, 47%. It's just a staggering market, and this segment is the growth engine. The segment has grown from $2 billion in 2005 to $13 billion this year in Macao. We have 1,000 games on the floor currently, doing $10,200 per day. Upside in this segment comes from the organic growth of the Macao market, specifically in Cotai. Our ability to leverage our hotel and retail asset base in Macao and Cotai in particular to drive much higher win per unit.
We're just in a unique position to improve dramatically and see SCL's mass table grow to $4 billion, $5 billion, $6 billion years ahead. We're in a very fortunate place in a very strong market. I think the numbers speak for themselves. That slide, to me, is staggering. The profit margin is equally staggering. This is the story in Macao. The consumption on the mass tables just grows and grows and grows.
Excellent. My follow-up is, you started buying back stock at the end of the 2Q. Have you bought anything since the quarter ended here in July? Also on this topic of share repurchases, can you review your strategy with regard to repurchases? Is it more programmatic, consistent, or is it more episodic, depending on valuation and depending to movements in the stock price?
It's latter. It's opportunistic buying. If we see the stock price down below where we think it should be, we're going to buy. Once we start to buy, we don't know whether or not people know we're buying, or we don't know, but as soon as we step in, the stock seems to go up. We can't state what we've done so far this quarter because that would be selective disclosure.
All right, guys. Good stuff. Thank you.
Thanks, Joe.
Your next question is from Cameron McKnight with Wells Fargo. Please go ahead with your question.
Great. Thanks very much. First question, can you talk to the hold percentage in Singapore? This has been the third quarter in a row where hold has been a little bit lower than expected, we've had a number of questions from folks just asking about that. If you could address that'd be great. I have a follow-up.
Sure. You're right. This is actually the fifth quarter we've been under where we'd like to be at, but still light to date since we opened the property. Hold percentage is about 2.65%. In the aggregate, if you add our competitors, the market's about 2.9%. No mysteries here. We've had a lot of amazing play. We're running a run rate of $60 billion-plus for the first time ever this year. Very encouraged by it. I have no concerns whatsoever. We take very large bets there. The swings are dramatic. The market's very concentrated. I have no explanation except in the end, the math always wins out. Across our portfolio worldwide, when you add up what we do here in Las Vegas and Macao and Singapore, numbers are just where we expect them to be, north of 2.85% on a rolling segment.
Total confidence in our team, total confidence that nothing untoward. Very confident in the end, the math will prevail. No concerns there at all.
See, just like the cards don't know how much money is being bet on them. The law of averages is not impacted by anybody's questioning whether the average were above average or below average. It always turns out the law of averages, like the law of physics, doesn't change. Over the long term, the number's going to be 2.85%. That's why they call it a theoretical average. To reach the average, you have to have some periods below and some periods above, and it all ends up at 2.85%.
Yeah, we did have a couple of exceptionally strong quarters back in late 2011, early 2012. We held 3.5, 3.6, but it's been a disappointing run, but one of these quarters will break out and hold 4.2, and life will go back to 2.85, so no concern.
Right. Got it. As a follow-up, Rob, we're hearing on the ground in Macau that some operators have been increasing the amount of credit they're extending to junket operators. Can you talk to the overall credit environment in Macau and also the VIP market there and conditions there?
Yeah. The VIP market, the numbers speak for themselves. The market has not been the growth engine it's been in the past. We continue to believe it's not driven by credit. It's driven by lack of back-end demand by the consumer. We're happy extending credit because our credit track record in Macau has been excellent. The fact is, when demand is there, we'll extend the credit. I don't think it's a credit-driven issue in Macau. The operators will give credit. It's demand driven by the consumer. To be really honest about it, we're happy to participate. We're very happy where we've gone in that segment in the last couple of years. From our purposes, the VIP issue is all about consumer demand. If demand is there, we'll extend the credit. Our junket partners will extend credit.
That story's been overwhelmed by the extreme growth in the mass side of the business. As much as we want to keep participating in growing our junket business, our year and this quarter is dictated by the ridiculously strong returns in mass tables.
Our junket business is better for us. Well, it's not junket business, but the VIP business is better for us in Singapore. One, because of the tax rates, and number two, because the junket reps themselves don't limit the amount of bets that the players can make. We can accept very large bets, up to SGD 1 million. The junket reps in Macau have too many customers, and they don't want to take that risk because if everybody bets $1 million a hand, and a hand, as you probably know, unless somebody twists the cards, takes about 30 to 60 seconds. We'd rather see that high-end business. Fortunately, we're paying very high commission for the players, but the tax rates help make up for that. We'd like to see more of that business, the million-dollar a hand business down in Singapore.
We're not doing anything to push it down there. It just happens to-
Right
to go there.
Okay, great. Thanks very much, guys.
Thank you.
Your next question is from Felicia Hendrix with Barclays. Please go ahead with your question.
Hi, good afternoon. Rob, I wanted to talk about your mass table yields in Macau a bit. You've been increasing the number of mass tables, and your mass table win per day has been going up. In the quarter, it was flattish, which is pretty impressive. I just wanted you to speak to what you're doing to drive those strong results, and then I have a follow-up.
It is flattish in the win per unit basis, but in the aggregate, it's growing up because obviously we have more tables on the floor. It's pretty simple. It's yield management, and we're looking at our junket yield versus our mass table yield. This story, as you know, Felicia, this industry just doesn't have any place where you can make $10,000, $11,000, $12,000 win per unit per day. It's beyond comprehension for me. When I go to Macau, it's shockingly strong and growing across the entire market. We're simply, as managers, looking to get the most yield we can out of table. As long as junket performance stays on par, we'll stay with junkets. It's an important segment. The reason we're moving more tables to mass floor is evident to you by looking at our numbers. We increased over 1,000 mass tables.
We may go 1,100 mass tables. We'll just keep riding the wave. When you realize what's happening in mass tables, to think about the fact that win per unit in the market have grown to as high as $12,000-$13,000 at 45% margins, how do you not do what we're doing? It's the only intelligent thing we do as managers, and that's to yield up. We do that in Pennsylvania. We try to do it in Las Vegas, where it's possible. No place is like Macau. As you well know. It's just extraordinary, and we're very fortunate because we may be somewhat overrepresented in one segment, and we'll adjust accordingly. I'm not concerned about our win per unit. You're right. It's down from $10.2 to $10.1. The aggregate win is up significantly.
We keep adding more, and we'll keep doing it because we believe that mass table business, as long as it's 20%-30% growth, we're the biggest beneficiaries. The primary growth resides on Cotai. That's our biggest representation of tables. When you see the kind of numbers we're getting out of The Venetian and SCC, it's very, very gratifying. That's our direction as managers want to yield up, we'll keep doing that.
Great. Just moving then to the slot side, kind of similar conversation. The numbers of the slots and ETGs have been declining, but the slot win per day has as well. I was wondering if you could discuss that.
Exactly. We keep changing the mix there, and we're big fans of slot ETG. I mean, the margins are breathtaking, 50%-plus. I'd like to see that business grow across the board, not just for our company, but in Macau, it's somewhat flattish, and that growth is somewhat surprising to me. I think, as you know, as you yield up on mass table games, you're pushing a segment of the market where the consumer can't participate. I think the real value to our slot ETG program, especially ETG, is it offers a place for the customers not betting HKD 2,000 get a place at the table, so to speak. We're complete believers, and we have I mean, one of the things we did very well, when Sheldon built The Venetian, people were shocked at the sheer size of the building.
In the end, it was a great trade because that real estate now, which a lot of people felt was wasted space, can now deploy a massive ETG slot strategy. To be honest with you, a lot of customers are pushed out of the market. The table yields are pushed up, the numbers so high on the minimum bets that customers are looking for an alternative, and that's what ETGs do. I'm surprised it's not growing faster in our portfolio, but we have a lot of confidence. It's a great segment. I still believe that they will do $1 billion of slot ETG in the aggregate across our portfolio. Not as exciting as mass tables for this quarter, but still a really nice segment to be in and one we're very committed to.
Great. Thanks a lot.
Sure.
Your next question is from Carlo Santarelli with Deutsche Bank. Please go ahead with your question.
Guys, good afternoon.
Carlo.
Just as you look at kind of the cadence of share in the market, as the mass market continues to grow, obviously your presence in that market should be a net benefit with respect to share. Over the last few quarters here, as Sands Cotai Central's ramped, we've kind of seen a flat line at about 21%, and I know you guys are trying to optimize that. Is there anything here on the come in the future where you think there's some low-hanging fruit and an opportunity to start to take a bigger share of the wallet over there?
Yeah, I do. I think we're in the pole position to do just that. I mean, if you look at our ramp this quarter, you think about growing from five something, nine something year-on-year. What business in the world grows 60% at a 45% margin? Yet, to your point, Carlo, we're exactly positioned to do that because we're on Cotai. I mean, we developed Cotai with the idea, it's the mass market machine, hotel rooms, fabulous retail opportunities. To your point, I think we have a lot of growth ahead of us. I think $4 billion, $5 billion, $6 billion, who knows how high it goes. We're positioned very well because we have the tables, we have the sleeping rooms, we have the retail, we have the whole show, and no reason why we think we can't keep yielding up materially.
I think SCC is going to be a big surprise to a lot of people as it goes beyond $1 billion of annualized EBITDA. I think The Venetian has upside potential. We've struggled at The Four Seasons to get there. We're going to get there in terms of the right yield per table. If our story is about this ridiculous growth in mass tables, it's primarily a Cotai story. We are the biggest Cotai provider. I think our story is just beginning. We're in the infancy of this growth. The story is just starting to be told now.
Thanks, Rob.
I think the vision that Sheldon built in Cotai, this never could have happened without Cotai. You don't have the physical space to build these big places if you're stuck in the peninsula. The vision here 10 years ago to build Cotai is now really being fulfilled. The vision is really starting to occur where I think our properties are going to grow and grow in this critical segment.
Carlo, just to clarify what Rob said, I mean, he's talking about mass the whole way, and we've gone in a year from 24.3% of the mass market for tables to 29.9%. That's what we're focused on, not the revenue number that includes the
Right
11%, 12% margin business.
Right.
We're always going to be focused on that piece.
You have to remember that SJM, that maintains the leadership and the gross gaming revenue, has 19, what I call sub-licensed casinos. 19. They're each picking up a piece of business, and they're just sub-licenses that have been there for many years that the government allowed Stanley Ho and now SJM to sub-license their license and their ability to operate casinos to 19, 20 other people, and yet they're only two or three percentage points ahead of us. We're operating five casinos. If you separate five and six, and The Plaza, The Venetian, and The Sands. There's only five. They're operating over 20 some odd casinos.
Yes, sure. That's it. That's not forgotten. Thank you, guys. That's really helpful. Then just quickly on the Four Seasons, I know, Rob, you mentioned it a little bit there. Obviously, the mass hold was a lot lower this quarter than it has been running, but on better drop in volume. Is there anything structurally there that's changed maybe that would make us think about it differently going forward?
No, nothing at all. I mean, let's not go into the whole cage drop issue, but it's not worth talking about. The Four Seasons is a work in progress. We're not happy where we're at right now, that we can do a lot better, and we repositioned that. We're in a transition period, Carlo. I think we all know that. As we move more into this premium mass business there, I think numbers will get better, and hold percentage will be what it's going to be. We know with that kind of volume, the hold percentage pretty much stays flattish when it's all said and done.
When we sell out the 300 apartments at the Four Seasons, that'll bring us in a lot of direct premium or premium direct at the high end. Because anybody spending several million dollars from the top is going to play at the Four Seasons. There'll be direct play or there'll be premium mass. That's one element that's going to contribute to an increased gross and increased EBITDA number.
Appreciate the color, guys. Thank you.
I would just like to emphasize, we have never been an advocate of gross gaming revenue. I know you have to start somewhere, but you got to start off at the top line somewhere. Where you end up at the bottom line is the most important thing. Every single quarter since 2004, we have done more than anybody else in Macau, and we continue to do more, and nobody's even close to us. You could bring in a lot of these guys that are doing a lot of business are only doing it because they're trying to be competitive with us, and they are trying to increase their gross gaming revenue because they think that that's the bottom line. I never saw anybody deposit in the bank gross gaming revenue, only net profit. The teller doesn't take GGR.
Thanks, Carlo.
Your next question is from Steven Kent.
You listen to him.
Hey, Steve.
Tell us I'm going to get insulted.
Steve Kent?
Steve?
Mr. Kent, your line is open.
Can you hear me now, Dan?
Yes, we can.
Yeah. Two quick questions. One, as much as people focus on the hold percentage for Singapore, the volumes have been very strong, especially at the high end. I was just wondering if you could give us some indications as to what's driving maybe some of that incremental volume. Because at one point, there was a question about that. Also on that same, on Singapore, the slot play also volume was very high, and whether there's some early thoughts from that that might be part of your strategy in other parts of the world. Then one final thing, CFO search, if you could just give us an update on that.
Sure.
I'll just tell you that the fact that we're taking up to a million-dollar bet is contributing to a very big top-line rolling number. That doesn't mean every bet is a million. Some guys just want to have the right to bet a million if they want to bet it. It's a matter of ego. They boast to their friends, "Oh, I could play $1 million a hand if I want to." The CFO search, we've retained I think, an executive search firm, and we're looking so far as I know. Mike is involved with that. Mike?
I'm here. Can you hear me?
Yeah, we can hear you. Did you?
Yeah, we're in the process of the final selection of search. We've done all our specifications. We're reviewing our alternatives and doing specific situations as to how the job should be really put together. In the meantime, our team is doing very well. As you know, Ken is still there, so we're in good shape there. We expect that we'll have something happening in the next three to four months.
Sheldon, just on the Singapore, the amount of volume there, besides the propensity for people to make big bets, what I guess I was asking was, were you seeing more people from different parts of the world? Because, again, that was one of the strategic focuses to go deeper into Southeast Asia to bring more and more customers into Singapore, and are you starting to see that?
Hi, Steve. It's Rob. Frankly, the answer is it remains the same sources. That being, we've always said it's concentrated. It's certainly mainland China is the primary driver, Hong Kong. Singaporeans who are PRs, permanent residents in Singapore, are important as well. Indonesia. The region really hasn't changed a whole lot. We still see some business from Tokyo and Korea, but the principal drivers in the last two quarters have been, A, mainland China/Hong Kong, B, permanent residents living in Singapore who may be Chinese nationals, and then C, Indonesia. Again, this remains a highly concentrated market. I don't think we've seen a whole lot of difference in terms of previous quarters, and I think it will remain highly concentrated, and hopefully we'll grow it. We're pleased to see ourselves getting in the $60 million, $60 billion annualized run rate area. The challenge remains the same.
Sheldon referenced the high nature of the betting. We take the highest bets in the world there, and our team is committed to keep trying. I can't tell you something really changed from the last year, fundamentally, in terms of that. Your reference to slot ETG, I think you know the story there. Everyone knows that the government's more restrictive vis-à-vis Singaporean local play. We are outsourcing, or I should say we are growing our business outside of Singapore, both premium mass, primarily table, slot to a lesser degree. The slots have been challenging because primarily slot business in any market
is regional, depends on the region you're in. Less visitation by Singaporeans has been more than offset by increased visitation by non-Singaporeans. Indonesians, Malaysians, Chinese, et cetera, have helped our business there. We remain confident that there's growth ahead of us in the win per unit per days and the mass table, non-rolling, as well as slot ETG. We're kind of flattish this quarter overall. The blend's around four, five, and change. We'd love to get back to our ambition two years ago, is to approach $5 million a day. We haven't seen growth Q1, Q2, but we're lapping last year's. It happened second quarter of 2012, the pullback by the government. We grow our business outside of Singapore, remain confident there's some growth there as well.
Okay, thank you.
Sure.
Thanks, Steve.
Operator.
Your next question is from Thomas Allen with Morgan Stanley.
Hi. You talked earlier about the improvement in visitation to Macau that's played out the past few months. What's your view on what's driving the increase, and do you think it's sustainable? There appears to have been a number of infrastructure improvements, but the past couple of months also had easy comps. Just wanted to hear your thoughts on it. Thank you.
I'll start off with the first comment. It's the infrastructure. There are more high-speed trains coming from Guangzhou. There's more and more trains are coming from the north, from Fujian Province. The further out their tentacles reach with the high-speed rails, the more visitation they'll get. There's more and more infrastructure coming in. They'll be able to move around with the light rail system a lot faster. I understand that while we were talking at length about this yesterday, once the bridge, the Hong Kong-Zhuhai-Macau Bridge, opens in three years, hopefully earlier, it's going to be Katy bar the door. It's going to be incredible numbers of visitation because instead of having just a Macau airport, you got the Hong Kong airport that's already bringing in 50 million, give or take, passengers a year.
If somebody says, "Okay, I can either go to Hong Kong Island, which takes 45 minutes, or I can go to Macau, which takes 20 to 25 minutes. Once I leave the airport, I go to the right, I'm going to Macau. I go to the left, I'm going to Hong Kong." When that opens, it's like I said, Katy bar the door. There's going to be incredible. It's the infrastructure that is holding up a significant increase in potential attendance.
Last year there were around 28 million visitors to the market. You've said the past two quarters you've had around 14 million visitors to your Cotai properties. Do you have numbers around where you think that'll go maybe in 2016 when the new supply opens? Thanks.
I don't think that anybody could say. It depends how many trains they put on the high-speed rails, how far out they're going to go that people can travel. What used to be eight hours is now two or three hours, and people go for one-night stays in Macau instead of going eight hours in each direction and take quite a while to travel. I don't think anybody could read that crystal ball. One thing I feel very confident, that's why we're building another lot three, we're building The Parisian to over 3,000 rooms. I don't see any reason to limit the number of people. You're talking about Macau having two airports, the Macau airport and the Hong Kong airport. As a matter of fact, it'll be just as quick to get into Macau, quicker to get into Macau than Hong Kong.
They say that they're talking about 45 million visitors, I think, to Macau. Sorry, to Hong Kong. We had 28 million visitors last year. Based upon our comps in our properties on a same store basis, we're looking at significant increases in attendance. I can't get into much further, but when I say significant, it's more than 5% or 10%. A lot more.
Very helpful. Thank you.
Your next question is from Harry Curtis with Nomura Securities. Please go ahead with your question.
Can you give us any updated thoughts on development in Japan or casino legislation in Japan given the LDP's recent victory?
Listen, we've been lobbying there for 5 years. We've had a very strong presence there. We know everything that's going on. The Restoration Party, headed up by Hashimoto in Osaka, who was alternately governor of the state of Osaka and mayor of the city of Osaka, going back and forth. The former mayor of the Tokyo metropolitan government, and/or just Tokyo. It's kind of like the city and the state, just like New York, New York. They wanted to submit the bill in June, but they didn't have the clout, they didn't have the number of votes to carry it. Right now, it appears as though November is the anticipated date that the bill will be submitted. The problem with the bill, there's good news and bad news. The good news is they're finally going to submit the bill to legalize full casino gambling.
The bad news is it's going to take a couple of years. The other guys wanted to do it, put a limit on it. It looks as though two years is the outside limit. It could get done a lot sooner. It's not that the various candidate cities have to wait two years, but it has to be done within two years. We don't have any more inside information.
Let's move on to the second, which is kind of the genesis of LVS Vegas. Most of the metrics there were better, slot, table, and REVPAR. Is there a better tone there, or do you think it's a head fake?
A head fake.
Like a good quarter.
I don't know. Listen, as long as President Obama doesn't say you can't take taxpayers' money and go to the Super Bowl or to Las Vegas, we stand a chance of going back up again. I don't know if that's dead, anybody could say there's any significant turn for the better or significant turn for the worse. I think it's just neutral.
Harry, I think you know it's a challenging place in terms of it's got to grow ADR to improve, obviously, the non-gaming side. That's going to be the challenge in this town, that'll come first out of the convention segment. We're hoping for a turn there in 2014. On the gaming side, truth is, we are very dependent on high-end premium Asian players who come here. Although we've participated, we've done very well in that segment, we're happy to be in it, the entire town doesn't share equally in that. On the gaming side, slot and mass tables continue to be mediocre. The premium segment is very strong on the Asian side, but that's the tale of Las Vegas today.
I wouldn't call it a head fake as much as it's just a challenging market that will slowly get better, I wouldn't look for rapid improvement the next few quarters.
Look, I think the issue, Harry, is that there are two companies that own about 20-some-odd properties on the Strip, on the Strip or just off the Strip, they're really controlling the room rates. During our growth years, our first decade, we had the highest grossing hotel room income for almost even for small to medium-sized chains. The Venetian proved itself as the most profitable hotel ever. Now we have two major holding operating companies, Caesars and MGM, both of which have significant debt, they don't have a big way to pay them off. Caesars has got $22 billion, $24 billion, I guess their income just barely pays their debt service, or maybe it exceeds it by a bit. They're trying to fill up all their rooms and get more bodies in to play the slots and to play in their casino.
I don't necessarily blame them. I suppose if I were in their position, I might do the same thing. They need bodies in their casinos, and they need bodies in their beds. The only way to get them is to buy the business by reducing the price, and that brings down my friend Steve Wynn's and our higher-end properties, where they're undercutting us by large amounts. Of course, they don't have the quality. Well, the Bellagio is a good property. They don't have the number of rooms that we have at the high end of the market, so obviously, people who want a better property, they'll pay more for us. The sucking sound that we hear is their room pricing and trying to fill up their properties so they can do something to help pay off their excessive debt.
They don't have the business model we do to sell off non-core assets and pay down all our debt. We could be totally debt free by selling off just our malls. Not necessarily the apartments, but just the malls. We could be totally debt free. That's an opportunity that we have that others don't have, and as long as they're in that position, they're going to keep the room rates down. Hopefully, they get out of it.
Operator, we have time for one more question.
Yes, sir. Your final question today is from Ian Weissman with ISI Group. Please go ahead with your question.
Yes, good afternoon. You guys gave timing on the opening of The Parisian. Was there any update on the table allocation and any concern about competing with four or five other projects going at the same time and labor shortages, and getting those projects built on time?
Well, the government would not have given building permits if they didn't think that they could allow the labor. Right now, there's been no change in our estimate. As a matter of fact, we're moving a little fast because we're practicing the follow-on trades practice like you do in building high-rises. As soon as you finish the structure, you come in with the MEP, and you drill through the floors, et cetera. Then you have one trade following another sequentially. We're doing that in the pilings. We have both bore pilings and driven pilings. What we're doing is taking a corner of the pilings, and we're putting the piling caps on as each of the pilings are completed. So we're starting off It's sort of a foundation. You put the pile caps on, and then you start the structure on top of that.
We're taking advantage of the opportunities to keep the foreign labor that we have and trying to get it done even quicker.
That's helpful.
There is no new news on table allocation. Every company I've ever run in my lifetime, I've always been competitive. I could touch wood, except my table is not wood. It's now stone.
That's helpful. One last question. Given the enormous success of the mall at Marina Bay Sands, it's sort of in the early stages of the cycle of the mall, maybe you could talk a little bit about the re-leasing spreads as leases are coming due or you're turning tenants over. What type of rent uplift are you getting?
Well, I don't think I can answer that. I'm not sure. The last time I talked to our head of leasing, he was optimistic that because the people who wanted more space, they want multi-level space. Chanel started off with two or three floors and put large identification, large signage, and there are other tenants doing that, Prada and other tenants. The Crystal Pavilion with Louis Vuitton is doing over $120 million in sales, $120 million-$140 million. It's one of their best shops in the entire chain. Our retail is going very well. I'm certain that, look, we're getting a base rent plus percentages, there are other developers that get base rent plus a 2% or 3% percentage on top of the base rent, they charge a very high base rent. We charge up to 18% percentage rent.
Whether we get it new or we get it by increasing upon when leases expire, doesn't make any difference because we're getting a percentage. We're doing very well. I'm very happy we could sell that mall. Look, pay off almost the entire cost, not just the mortgage.
Okay. Thank you very much.
You're welcome.
Ladies and gentlemen, that does conclude today's conference call. Thank you for your participation, and you may now disconnect.