As mentioned earlier this week, we need to start giving credit where it’s due (pardon the pun) to MGM Macau. Although we are still skeptical it can be sustained, we are impressed that the growth numbers are looking up while margins are widening. Ebitda of US$83m for the third quarter was basically just back in line with previous performance on a normalized win-hold (2Q was down on 1Q due to luck), but the October numbers indicate the property’s fourth-quarter result should be significantly better. And it doesn’t appear that they are giving away the shop, either. For now, at least. We don’t yet know what will happen when win-hold changes direction, and in which rooms it will change. That is the thing about having a mix of rolling-chip and revenue-share rooms for a major junket on the same property.

However, it’s not just in the VIP rooms that progress is being made. As MGM Resorts CEO Jim Murren said on the earnings call with analysts, he thinks smarter decisions are being made everywhere in the Macau property. We can see it on the mass gaming floor, too. Things are definitely looking up for the IPO, if it ever gets out the door. Given that no one really wants to buy the Vegas-laden stock listed in the US just to participate in the Macau play, the carving out of those assets with a HK listing ought to benefit both shareholders in the joint-venture. So much so, in fact, that they are cashing in already, sucking US$125m each out of it ahead of the listing. Nice work if you can get it.

We also note Grant Bowie’s assertion (yes, he’s still there) that the company will get its pre-allocated plot of land on Cotai soon. How MGM Macau will fund its Cotai development is still a mystery, given the debt load being carried on the peninsula and the apparent desperate need for cash of its shareholders. And we also have to empathize with Sands China executives, who cannot say anything publicly about anything in Cotai before the government has announced it, and yet Bowie and Steve Wynn can fire away happily to the media. Go figure.

Used with permission & copyright IntelMacau