Casino gross gaming revenue (GGR) in Macau fell by 0.4 percent year-on-year in March, to MOP25.84 billion (US$3.20 billion), according to data from the city’s regulator, the Gaming Inspection and Coordination Bureau, released on Monday.
The monthly result had exceeded market expectations, due to “high VIP hold” rates for the casinos, said a note from brokerage Sanford C. Bernstein Ltd soon after the government’s announcement.
“March was better than feared… thanks to solid mass demand and favourable VIP luck,” stated analyst DS Kim of JP Morgan (Asia Pacific) Securities Ltd in his institution’s Monday note on the March GGR result.
Several investment brokerages – citing industry sources – had last week anticipated year-on-year GGR decline for March of between 3 percent and 6 percent, attributed mainly to a softening in demand for VIP play by Chinese high rollers.
The latest monthly result puts the market’s accumulated 2019 year-on-year decline at 0.5 percent, at MOP76.15 billion. January casino GGR registered the first year-on-year monthly decline since 2016.
February had seen 4.4-percent growth in GGR, buoyed by the Chinese New Year holiday period. According to some commentators, that festive season typically sees not only a higher volume of visitors to Macau, but also more Chinese consumers that are willing to test their “luck” – via gambling – as a perceived indicator of their well-being for the following 12 months
In other developments that could have an impact on Macau GGR in 2019, Macau’s weather forecasting service recently warned that another category-10 “super typhoon” could affect the city this year.
Even a relatively milder category 8 typhoon results in closure of public transport in Macau even when the casinos run normally. Investment analysts say the suspension of links in and out of Macau to mainland China, Hong Kong and beyond can shave fractions of a percentage point or greater from Macau’s daily casino revenue tally during the storm-affected period.
Macau casino entrepreneur Lawrence Ho Yau Lung, chairman and chief executive of local operator Melco Resorts and Entertainment Ltd, said last week that 2019 was “not going to be as great as 2018″ – a period that saw a 14-percent growth year-on-year in Macau GGR – but he remained upbeat about the Macau market.
(Updated 3.05pm, April 1)
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”There are likely to be cancellations of some Chinese New Year casino and junket parties and events [in Macau]”
Vitaly Umansky, Eunice Lee and Kelsey Zhu
Sanford Bernstein analysts