Several brokerages have given what they say is a breakdown for February of the Macau gaming market performance by product segment.
On Tuesday the Macau government announced the aggregate numbers for February’s casino gross gaming revenue (GGR). The tally was 0.1 percent down from the same month a year earlier, at approximately MOP19.52 billion (US$2.44 billion).
Deutsche Bank Securities Inc said in a Thursday note, using unofficial industry returns, that it estimated mass-market table GGR was down 1.7 percent year-on-year in February, a period covering the Chinese New Year holiday. It calculated that slot machine GGR was up 4.8 percent on the same period in 2015.
The institution further said it estimated that VIP revenue was up 0.6 percent year-on-year. VIP rolling chip volume for junkets-only – another measurement of VIP table games’ performance and which accounts for most VIP play in Macau – was likely down 15.7 percent from the prior-year period said the bank.
Daiwa Securities Group Inc said in a Thursday note that it estimated Macau’s February VIP GGR was down 1.0 percent year-on-year, while mass-market GGR was flat compared to the prior-year period.
“The VIP daily rolling run rate declined by 19 percent year-on-year and increased by 16 percent month-on-month to HKD8.4 billion [US$1.08 billion] per day in February,” suggested Daiwa analysts Jamie Soo and Adrian Chan.
“Accounting for table reclassifications, we estimate that VIP revenue was down 1 percent year-on-year but up 13 percent month-on-month,” they added. That was a reference to ‘premium mass’ tables that have been reclassified as ‘VIP’ because the Macau government currently only allows gamblers to smoke at ‘VIP’ tables provided the area is physically separate from the main gaming floor. Given that many of Macau’s casino table gamblers are also smokers, casinos like to offer them easy access to tables with smoking. Jurisdictions that introduce blanket bans on casino smoking typically see a fall in GGR, say a number of investment analysts.
Daiwa said that – also accounting for table reclassifications – the Macau mass segment’s run rate was down 3 percent year-on-year and 4 percent month-on-month.
Analysts Vitaly Umansky and Simon Zhang of Sanford C. Bernstein Ltd said in a Friday note regarding the breakdown of February GGR: “While the data become more murky due to VIP to mass reclassifications, we estimate VIP GGR -4 percent year-on-year (+9.5 percent month-on-month) and mass GGR +4 percent year-on-year (flat month-on-month).”
February market share
Deutsche Bank also gave a breakdown on February revenue market share for the Macau operators.
It said the league table was, in descending order: Sands China Ltd, with 24.6 percent (a month-on-month increase of 142 basis points); Galaxy Entertainment Group Ltd with 22.4 percent (up 40 basis points from January); SJM Holdings Ltd with 20.2 percent (up 110 basis points); Melco Crown Entertainment Ltd at 14.5 percent (down 216 basis points); Wynn Macau Ltd with 10.9 percent (up 111 basis points); and MGM China Holdings Ltd with 7.4 percent (down 187 basis points).
The bank forecasts Macau’s GGR will fall by 10.1 percent year-on-year in March. It expects a 13.6 percent year-on-year fall in VIP revenue and a 5.5 percent decline from the prior year in the mass-market segment.
“If the market is recovering then sequential/seasonal trends should be improving,” noted the institution’s analysts Carlo Santarelli and Danny Valoy.
“This is difficult to see in looking at February alone and the January/February combined two-year stack shows just modest improvement from the prior period two-year stacks,” they added.
Lionel Leong Vai Tac, Macau’s Secretary for Economy and Finance, told reporters on Wednesday that it was “still too early to tell” if Macau GGR would continue falling year-on-year during 2016.
He made his remarks in China’s capital, Beijing, where he was attending the National People’s Congress as a member of the Macau delegation.
“We need to constantly monitor the situation, especially the neighbouring regions, customer sources and capital flow,” Mr Leong added, quoted by Macau Business Daily.
Ambrose So Shu Fai, chief executive of SJM Holdings – and a member of Macau’s delegation to the Chinese People’s Political Consultative Committee also taking place in Beijing – said on the sidelines of his meeting that SJM Holdings had seen a slight improvement in the business performance of the mass market at its properties and some VIP rooms. He added however that it was too early to call the improvement a trend.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia