The rate of year-on-year decline in Macau VIP gaming revenue could slow in November and December, suggests a note from analyst Karen Tang of Deutsche Bank AG in Hong Kong.
“For November and December, we expect [VIP] GGR [gross gaming revenue] year-on-year decline would be smaller (down 15 percent to 18 percent year-on-year) because of slightly easier comps,” wrote Ms Tang.
That’s a reference both to the sequential ramp up in levels of year-on-year decline in VIP seen since June this year, and – for the coming November and December numbers – easier comparisons with the year prior period.
The bank notes Macau casino operators’ hold in the VIP baccarat segment was “very high” in October 2013, at 3.3 percent, while November 2013’s VIP hold was “low” at 2.9 percent and December that year “normal” at 3.1 percent.
In the third quarter this year VIP revenue fell by an aggregate of 19.1 percent year-on-year according to data from the local regulator, the Gaming Inspection and Coordination Bureau.
Between June and September, Macau GGR as a whole shrank year-on-year by 3.7 percent, 3.6 percent, 6.1 percent and 11.7 percent according to government data. The September aggregate numbers were hit by the quickening decline of VIP.
In the third quarter, VIP’s contribution to total GGR dipped to below 60 percent (56.4 percent of all revenue from casino games of fortune).
Union Gaming Research Macau Ltd described VIP’s contribution to the third quarter as “…the lowest VIP mix – by a wide margin – since the liberalisation of gaming in Macau,” which occurred early in the previous decade.
Ms Tang said in her note: “For the first quarter of 2015, we expect [VIP] GGR will still decline [but] at a lower rate (down 15 percent to 17 percent year-on-year).”
“As such, we think October will mark the trough of the GGR year-on-year decline down-cycle,” she added.
