Macau Casinos Rebound With 4.4 Percent February Gain, Win Totals $3.14B
Posted on: March 1, 2019, 09:55h.
Last updated on: March 1, 2019, 09:55h.
Macau casinos bounced back from a disappointing January with a 4.4 percent gross gaming revenue (GGR) win in February.
Casino win across the enclave totaled nearly $3.14 billion. The month followed a five percent loss to begin 2019 that saw gaming floors keep a little more than $3 billion.
Through the first two months of the year, Macau casinos have won $6.22 billion, a negligible 0.5 percent decrease. Analysts aren’t overly concerned.
On a combined basis, January/February 2019 was flat year-on-year,” Sanford C. Bernstein analysts Vitaly Umansky, Eunice Lee, and Kelsey Zhu said in a note. “The January/February 2018 period saw year-on-year growth of 20 percent setting up a difficult year-on-year comparison.”
February featured the all-important Chinese New Year holiday, a weeklong festival that largely affords mainland citizens time off from their jobs. The Macau Government Tourism Office (MGTO) said over 1.2 million people traveled to the world’s richest gambling hub during the Spring Festival.
Analysts had predicted a wide two percent to 15 percent GGR growth in February.
The economic climate in Macau is cloudy, as many concerns hover over the Special Administrative Region (SAR). All six of the region’s casino operators – Sands, MGM, Melco, Wynn, SJM, and Galaxy – will see their concessions expire over the next three years.
The ongoing trade tensions between the US and China pose threats to the gaming industry. Three of the permit holders are American-based companies. The International Monetary Fund (IMF) suggested recently that escalating relations between the two world powers could hamper those three casino operators from making continued investments in the enclave.
The People’s Republic additionally lowered its economic growth projection for 2019 to six to 6.5 percent. In Macau, IMF analysts believe 5.5 percent growth will be experienced.
The mainland’s ability to influence Macau’s economy is of utmost concern. Regulatory conditions such as President Xi Jinping’s implementation of a crackdown on VIP junket groups in 2014 can have grave consequences.
Macau casinos have focused on growing mass market tourism. As a result, after three years of GGR declines, the enclave has recorded back-to-back increases, with total win coming in at $37.85 billion last year.
But trepidations regarding the trade war, slowing mainland economy, and weakening yuan all continue to cast doubt over the year ahead.
Macau officials want the enclave to reduce its reliance on gaming and VIP high rollers. It’s a concept that the mainland federal government shares.
In February, China issued guidelines to Macau that detailed developing a “Greater Bay Area” around the Pearl River Delta. The 2018 opening of the 34-mile, six-lane Hong Kong-Zhuhai-Macau Bridge now drastically shortens automobile travel time between the two SARs.
Macau is the only area in China where gambling is legal. The region was returned to the People’s Republic in 1999 after being controlled by Portugal for more than a century. 2019 marks the 20th anniversary of Chinese governance of the enclave.
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