VIP gross gaming revenue (GGR) in Macau fell by 29.0 percent year-on-year in the fourth quarter and 10.9 percent for the full-year of 2014, according to official data published on Friday.
It had already been announced on January 2 by the local gaming regulator that Macau’s total casino revenue had slipped 2.6 percent year-on-year in 2014, to the equivalent of MOP351.52 billion (US$44 billion), compared to MOP360.75 billion in 2013.
But investment analysts were waiting for official confirmation of the year-on-year trend in the fourth quarter, and the split between VIP and mass revenue, for any clues those data might give about the direction of the industry in the first and second quarters of 2015.
Several analysts had expected a fourth quarter fall in the range of 30 percent to 33 percent year-on-year for VIP GGR.
As it turned out, VIP revenue was MOP46.06 billion in the fourth quarter, compared to MOP64.89 billion in the final three months of 2013.
The high roller category produced MOP212.54 billion for the whole of 2014, compared to MOP238.52 billion in full-year 2013, accounting for 60.5 percent of total casino revenue.
The official tallies were published by the Macau government after Hong Kong Stock Exchange trading hours.
Macau’s mass-market segment – including slots – declined by 16.2 percent in the fourth quarter judged year-on-year, to MOP29.52 billion, compared to MOP35.23 billion in the year-prior period. For full-year 2014, mass, including slots, rose by 13.7 percent, to MOP138.99 billion, compared to MOP122.23 billion in full-year 2013.
Slot machine revenue judged individually slipped 17.0 percent year-on-year in the fourth quarter, to MOP3.13 billion, from MOP3.77 billion in the year-prior period. But for full-year 2014, slot revenue was up 0.4 percent, to MOP14.44 billion, from MOP14.38 billion in full-year 2013.
Macau gaming stock prices have had a downward correction of 42 percent since year-end 2013 – versus the benchmark Hang Seng Index’s 6 percent rise – said a note this week from Barclays Plc.
The decline in investor interest appeared to be linked to some degree to fears that China’s anti-corruption campaign and slowing economy could have lingering negative effects on the city’s casino industry.
Friday’s official numbers came from the local gaming regulator, the Gaming Inspection and Coordination Bureau, also known as DICJ.
In the second half of 2014 investors got used to the idea that VIP was facing an uphill struggle. But when the mass segment – including slots – started slowing year-on-year in October; it appeared to raise concerns among some investors that the fundamentals of the market were changing.
There was some brighter news on Friday from the electronic table games segment on the casinos’ mass-market floors.
So called ‘live multi game’ products – those featuring table-style games with live dealers but electronic betting and electronic bet settlement – produced 39.0 percent growth year-on-year in the fourth quarter. Revenue from such products rose to MOP595 million in the last three months of 2014, compared to MOP428 million in the year-prior period. For the whole of 2014, live multi game revenue rose 51.7 percent, to MOP2.26 billion, from MOP1.49 billion in full-year 2013.
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”We expect Okada [Manila] to add US$1.2 billion of GGR by 2019 to the overall market, capturing 32 percent market share”
Alex Poon and Praveen Choudhary
Analysts at Morgan Stanley