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Macau Casino Revenue Up 29% to $2.9BN in July

August 1st, 2017 Author:

Macau Casino Revenue Up 29% to $2.9BN in JulyHaving experienced 26 months of decline, Macau returned to growth in August of 2016. Since then, China’s only legal gambling resort has seen its revenue increase every month compared to the previous year, with July’s result no exception. According to the latest financial figures released by the Gaming Inspection and Coordination Bureau, Macau posted a 29% rise in revenue to $2.9 billion in July versus the same month in 2016, also marking its biggest percentage gain since February of 2014.

While the Chinese government’s ongoing anti-corruption campaign and attempts to prevent capital outflows continues to hit the island’s casino industry, VIP business has started to improve once again, while mass market visitors have also noted an uptick in numbers. In fact, the second quarter of 2017 has seen the high roller segment grow by an impressive 35%, while the recreational gambler market, too, has reported an 8.1% improvement in its recovery. Commenting on the positive development, DS Kim from JPMorgan Chase & Co. stated:

“VIP segment, for now, continues to see broad recovery across big and smaller junkets, a trend admittedly well above what we had envisioned.”

The positive trend has also been reflected in a 20% increase in casino stock prices so far this year, with Wynn Macau shares up by 37%, and Galaxy Entertainment Group Ltd higher by 43%. Despite 12 months of increasing year-on-year revenue, however, some analysts are still warning of challenging times ahead, and as Jamie Soo from Daiwa Capital Markets Hong Kong Ltd, explains:

“Risk of heightening enforcement and potential policy pressures we had flagged have certainly not gone away. Some of the pressure on the gaming revenue does take time to manifest itself, and the seasonal impact of stronger mass numbers for summer months may very well smooth out the potential negative impact of this in the near term.”

Looking ahead, Senior Analyst Vitaly Umansky at Sanford C. Bernstein & Company LLC is predicting a gross gaming revenue increase of between 22% and 25% in August, compared to the same month last year.

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