Macau Gaming Revenue Hits Four-Year High, Win Totals $3.38B
Posted on: November 1, 2018, 07:23h.
Last updated on: November 1, 2018, 07:23h.
Macau casinos won 27.3 billion patacas ($3.38 billion) in October, a 2.6 percent year-over-year gain. It’s the highest monthly gross gaming revenue (GGR) haul in four years.
Last month was the industry’s highest GGR mark since October 2014 when the region won $3.5 billion. October 2018 was the enclave’s 27th consecutive monthly increase.
Year to date, casino win is at $31.16 billion, which is 14.3 percent ahead of where the gaming industry was at this time last year. If that pace holds, Macau is poised to win around $38 billion.
Analysts say the strong month, which included the Golden Week National Holiday, shows that the enclave is successfully appealing to both VIP and mass market visitors.
Those same analysts practically nailed the October GGR number. Japanese financial firm Nomura Group and US-based Sanford C. Bernstein both predicted around $3.34 billion. As for November, Bernstein says it expects Macau casinos to grow gaming win by two to four percent.
While October was Macau’s best month in four years, the 2.6 percent increase is the smallest gain in two years.
Bloomberg Business analyst Daniela Wei said of the numbers, “October’s result is the clearest signal yet that China’s slowing economy and the trade war Beijing and Washington is weighing on the outlook for the world’s biggest gaming center.
The result may not bode well for Macau since October is considered a peak month, traditionally showing higher gaming revenue because of the Golden Week holiday,” Wei concluded.
Casino operators began rethinking their marketing strategies in 2014 as China began cracking down on VIP junket groups that bring high rollers to the enclave. Resorts are now appealing to more of the mass market, and the recent opening of the Hong Kong-Zhuhai-Macau bridge will make Macau more accessible for the demographic.
Along with the mass market, the bridge should make Macau more appealing to Hong Kong and international businesses for conventions and meetings. The 34-mile bridge across the Pearl River Delta connects the casino hub to Hong Kong in just over a half-hour’s drive.
Casino shuttles are barred from using the bridge, but resorts have partnered with third-party charter companies that landed permits to traverse the crossing.
Shares of Macau’s six casino concessionaires traded on the Hong Kong Stock reacted positively to the October GGR report.
MGM China was the biggest gainer at 3.79 percent, followed by Galaxy Entertainment (3.18 percent), Sands China (2.65 percent), Wynn Macau (2.46 percent), Melco Resorts (0.6 percent), and SJM Holdings (0.5 percent).
The increases are much welcomed by investors. The Bloomberg Intelligence index of Macau casino stocks has plummeted in recent months due to China’s slowing economy and the ongoing trade war with the US. The index has dropped more than 40 percent from their May peak.
October was a dismal time for many industries around the world, and that includes gaming. However, strong third quarter revenue from MGM Resorts and a dividend increase issued by Sands recently delivered some good news to Las Vegas.