Melco Crown Profit Driven by Premium Mass-Market Gamblers

Premium mass-market gamblers are perfect for casinos because they wage large amounts without demanding comps from the house.

Melco Crown, the Macau casino venture of Australian billionaire James Packer and local Lawrence Ho beat revenue estimates for the first-quarter of 2014, pulling in pre-tax revenue of $387.5 million.

While Macau poker rooms and casinos are associated with junket-provided VIP gamblers, Melco Crown and competitors MGM and Wynn Macau have found recent success by pulling in “premium mass-market gamblers.”

This demographic represents a sweet spot for casinos, as they wager much more than the average mass marketer but don’t demand the comps provided to VIP visitors. In short, they spend money without being coddled.

Macau market becoming increasingly competitive

Chinese gambling laws prohibit the activity on the mainland, so Macau has become the favored destination of gamblers across China and the Asian continent.

Melco is currently Macau’s leader in attracting premium mass marketers, but in a city full of great gambling venues, it’s growth potential could still be limited, said Praveen Choudhary of Morgan Stanley.

However, next year the casino giant will open its third resort casino, which will augment its ability to serve VIPs and premium mass marketers.