Macau Casino Revenue Grows Two Percent in May, But Analysts Express Trade War Fears
Posted on: June 3, 2019, 10:28h.
Last updated on: June 3, 2019, 10:28h.
Casino revenue in Macau was up 1.8 percent last month, but gaming industry analysts are concerned over the ongoing US-China trade war and how it will ultimately impact the world’s richest gaming hub.
Gross gaming revenue (GGR) totaled 26 billion patacas ($3.2 billion) last month, a 1.8 percent year-over-year gain. However, that missed the general consensus projection from analysts, who were forecasting a three percent monthly increase.
May’s casino revenue report also follows declines posted in March and April. Through five months, casino win totals $15.58 billion – a 1.6 percent shortfall compared to a year ago.
Macau Gaming Outlook
Analysts are concerned regarding the Chinese Special Administrative Region’s economic standing.
Bloomberg’s Jinshan Hong writes, “Despite May’s gains, a full recovery remains elusive for Macau’s casinos. A slowing Chinese economy and trade war have loomed over the territory this year, ending more than two years of uninterrupted revenue growth as the high-roller segment has weakened.”
VIP play continues to decline throughout Macau. Morgan Stanley Asia analyst Praveen Choudhary estimates that high roller GGR fell 15 to 20 percent last month. The mass market – which has received more attention from the enclave’s six licensed casino operators in wake of China President Xi Jinping’s crackdown on junket groups – is fortunately growing and helping keep overall gross casino win around par.
The trade war between the US and China is casting unease over Macau. But MGM China CEO Grant Bowie opined last month that he’s confident the casino mecca can weather the storm.
There are always ups and downs in the marketplace,” Bowie explained. “We are still the largest gaming market in the world, and I think everybody in Macau should be very confident.”
Last week, Melco Resorts entered into an agreement to purchase a nearly 20 percent stake in Crown Resorts from the casino company’s founder and former CEO James Packer. The move by the Hong Kong-based Melco – which operates in Macau, the Philippines, and soon Cyprus – might hint that billionaire CEO Lawrence Ho believes further market diversification is in the company’s best interest.
Where the High Rollers Are
Macau might be better attracting mass market visitors, but the VIP of course remains a highly critical component to casino floors. While the enclave once was the go-to destination for mainland China’s wealthiest citizens, today there are other markets that are adequately poaching some of the business.
The two multibillion-dollar integrated casino resorts in Singapore have become more attractive to Chinese high rollers. Las Vegas Sands and Genting are collectively spending more than $6 billion to upgrade their respective properties there.
Junket group bigwig Suncity Group is in the process of building an ultra-luxury gaming property in Vietnam. And in the Philippines, casino operators continue to invest in large casinos – primarily in the Manila capital’s Entertainment City.
As a result of the varying economic factors, analysts believe Macau GGR will see single-digit growth in 2019.
Related News Articles
Related News Articles
January 5, 2022 — 7 Comments—
January 24, 2022 — 2 Comments—