Apr 15, 2016 Newsdesk Latest News, Macau, Top of the deck  
Mass-market casino gross gaming revenue (GGR) in Macau – including mass table games, slots and live multi game – fell 4.8 percent year-on-year in the first quarter this year. In the first quarter of 2015, such revenue had fallen 27.0 percent year-on-year.
VIP baccarat GGR also showed a slowing in the rate of decline for the segment, albeit from a depleted base. Such GGR slipped 19.3 percent in the first three months of 2016 compared to the prior-year period, show data from the city’s gaming regulator released on Friday. In the first quarter of 2015, VIP baccarat GGR had declined 42.1 percent year-on-year.
It had already been reported by the Gaming Inspection and Coordination Bureau on April 1 that total casino GGR for the first three months of 2016 had contracted by 13.3 percent year-on-year. Friday’s figures gave the breakdown of revenue per gaming product segment.
Mass market GGR for the first quarter of 2016 was just over MOP25.79 billion (US$3.23 billion), compared to nearly MOP27.11 billion in the prior-year period.
VIP baccarat revenue for the period was MOP30.38 billion, versus MOP37.67 billion in the first quarter of 2015.
VIP play as a proportion of all casino GGR stood at 54.1 percent, compared to 58.2 percent in the first quarter of 2015.
Mass-market baccarat accounted for MOP19.01 billion, or 33.8 percent, of all casino GGR, meaning live dealer baccarat of all stripes accounted for 87.9 percent of all Macau casino gaming revenue.
Slot machine GGR for the first quarter 2016 stood at nearly MOP2.86 billion, compared to nearly MOP2.91 billion in the prior-year period, a decline of 1.7 percent.
Live multi game – a category of electronic table games using a live dealer but electronically recorded betting and bet settlement – recorded a year-on-year increase in GGR of 1.9 percent, to MOP547 million, from MOP537 million in the first quarter of 2015.
‘Reclassification’ issue
Brokerage Union Gaming Securities Asia Ltd said in a note on Friday it estimated that when adjusting for “table reclassification” in the Macau market it was likely that mass-market casino GGR actually grew year-on-year in the quarter.
“Table reclassification” is a reference to tables being redesignated as ‘VIP’ rather than ‘mass market’ in order to allow smoking at tableside; under Macau’s current smoking regulations as they apply to casinos. Despite such reclassification, the players placing bets at such tables are often doing so in multiples more commonly associated with the so-called “premium mass” market segment rather than the traditional VIP segment, and on a cash-only basis rather than the credit-based rolling chip system used for traditional VIP gambling. Some investment analysts have said this clouds matters in understanding the true breakdown between mass-market and VIP play in Macau.
Union Gaming’s analyst Grant Govertsen said: “Given that table games reclassifications have understated mass performance by 700 basis points to 1,000 basis points since late 2014, we estimate that after adjusting for this effect, mass/slots GGR actually grew around 3 percent to 4 percent year-on-year in first quarter of 2016. This would represent the first quarter of year-on-year growth for mass market since first quarter of 2014.”
“We are looking for this trajectory to continue through 2016 and we remain biased to the upside as it relates to our forecast for 7 percent to 8 percent mass market GGR growth in 2016,” added the note.
In the first quarter 2014, mass-market casino GGR – including live dealer table games, slots and live multi game – rose 35.2 percent year-on-year, according to the gaming bureau. The bureau does not indicate in its data whether table reclassification is factored when arriving at tallies for VIP table gaming versus mass-market play.
Union Gaming said, referring to the first quarter 2016 data: “Baccarat ‘only’ accounted for 88 percent of total GGR in first quarter 2016, representing the fourth consecutive quarter at this level. Prior to this, baccarat always accounted for 91 percent or 92 percent from 2010 onwards. This suggests to us a slightly more diverse customer base.”
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