Macau casino operators MGM China Holdings Ltd and Melco Resorts and Entertainment Ltd “continue to gain share” in VIP gambling business in the city so far this month, suggests a Monday note from Japanese brokerage Nomura.
“Based on our latest operator checks, we do not believe that all Macau operators have been negatively impacted by low VIP volumes/hold in March. We believe buy-rated MGM [China] and Melco [Resorts] continue to gain share,” wrote analysts Harry Curtis, Daniel Adam and Brian Dobson.
Nonetheless the institution thought that market-wide, a softening of average daily VIP gambling volume so far in March compared to February – down by as much as 17 percent to 19 percent – was likely to contribute to a decline in Macau’s March casino gross gambling revenue (GGR) of between 3 percent and 5 percent year-on-year.
GGR is a different way of measuring industry performance as compared to VIP volume – the latter is also sometimes referred to as rolling chip volume.
“Assuming GGR per day settles at approximately MOP800 million [US$99 million] to MOP850 million for the final week of the month, we estimate March GGR will be down around 3 percent to 5 percent year-on-year,” stated Nomura.
Brokerage Sanford C. Bernstein Ltd said in a Monday memo that its “channel checks” indicated Macau’s average daily GGR for March so far this month was MOP795 million, down 12 percent compared to February’s MOP906-million average, and down 1 percent compared with January’s MOP805-million daily average.
The institution added that so far in March, average daily GGR was down 5 percent year-on-year on the MOP837 million average per day in March 2018, although the firm’s analysts said large-scale events by junkets for their customers this time last year, had held “elevated” VIP GGR in March 2018.
“As a result of weaker than expected trend in March, we are lowering our March estimated GGR growth to -6 percent to -5 percent year-on-year,” wrote analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu.
They also noted that sequentially, compared to February – a period that included the Chinese New Year holiday – the decline was -4 percent to -3 percent.
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"There’s a huge amount of possibilities out there and in the case of Macau, it seems that some of these issues should be considered or we may lose the epithet of gambling capital of the world"
Macau-based lawyer and senior partner at law firm Rato, Ling, Lei and Cortés