Forecasts by several market analysts hint that Macau’s casino industry’s gross gaming revenue (GGR) is likely to continue on its trajectory of growth in November as well.
The casino hub saw a positive revenue trend in August for the first time ever in 27 months since the Chinese authorities launched an anti-corruption crackdown targeting VIP gamblers and money laundering in Macau’s casinos.
Investment firm Sanford C. Bernstein Ltd in Hong Kong has forecasted that Macau’s GGR in November is likely to grow year-on- year by around 13.9 – 15 percent.
The growth rates in previous months have been more modest–August saw growth of 1.1 percent, September registered 7.4 percent while in October it was at 8.8 percent. The last time Macau’s GGR grew over 15 percent was in February 2014 when the growth rate went up to 40.3 percent.
In a statement, Vitaly Umansky, Zhen Gong and Yang Xie analysts of Sanford Bernstein, said
“According to our channel checks and our estimates, Macau’s GGR… month-to- date (November 1 to 27) is approximately MOP17 billion [US$2.13 billion]. Assuming an average daily rate of MOP580 million to MOP640 million for the remainder of this month, November GGR would be in the range of MOP18.7 billion and MOP18.9 billion.”
According to the firm, the casino that has seen the best performance this month is the Wynn Macau. Others like Melco Crown, Galaxy Entertainment and MGM China have all witnessed some amount of decline. The observations are based on channel checks conducted by the brokerage firm. The analysts have however cautioned regarding the growth trend saying that breakdown between VIP gaming and mass-market gaming numbers is critical to understand the health of the market which so far isn’t available.
Christopher Jones of the Buckingham Research Group Inc has also said that the growth momentum in Macau would continue in the coming month. He has attributed it to increased hotel capacity, higher average spend per customer as well as modest improvement in demand. There have been two major casino openings in Macau’s Cotai region in the past few months – the 1,700-room integrated resort Wynn Palace and the 3,000-room Parisian Macao from Sands China Ltd.
Another analyst firm, Telsey Advisory Group LLC has a less optimistic view, projecting a growth of 8 percent in November revenue. The firm’s analysts have said that after the strong showing in October mostly due to the Golden Week holiday, the trend is likely to soften in November.