Macau Casino Growth in January the Highest in Four Years

Macau’s casino market has started the year in style after posting a huge 36.4% year-on-year revenue increase to $3.3 billion for January compared to the same month in 2017. Not only did that figure represents its biggest growth spike since February of 2014, but it was also well in excess of the 27% rise forecast by seven analysts surveyed by Bloomberg.
After suffering more than two years of revenue declines, last year Chinese President Xi Jinping eased off on the anti-corruption campaign which had instigated and caused so much economic damage to Macau’s casino market. In August 2016, the gambling resort then began to emerge from the doldrums, eventually growing by 19.1% to $33.02 billion by the end of 2017.
Despite the hugely positive numbers, however, Macau’s casino market is still significantly lower than the $45.2 billion in gaming revenue it generated in 2013. Nevertheless, the market is increasingly trending higher each month, with gaming analysts now predicting that the industry will likely surge to even greater heights by 2019.
That said, Fitch Ratings also expect the growth rate to fall from 19% to around 11% in 2018, with the mass market expanding by about 14% and the VIP segment by just 8%. Elaborating further, Alex Bumazhny, senior director for corporate finance at Fitch Ratings, stated:
“The VIP segment continues to grow, but the growth rate began to decelerate in the fourth quarter last year. Fitch’s cautious position on the VIP reflects its inherent volatility and the potential for an economic slowdown on mainland China.”
Likewise, Sophie Liu, associate director at S&P Global Ratings, was quick to point out that January’s growth rate, which completes 18th months of gains, was well above the 6-12% range forecast by the firm. The associate director then highlighted that Macau’s casino market still remained susceptible to a variety of factors with the potential to negatively impact it, including policy changes by the Chinese government, adverse economic conditions, as well as pronounced seasonality.
Finally, Macau’s casino market is expected to receive a further boost next month after the $3.4 billion MGM Cotai (photo) opens its doors for business, complete with 1,390 hotel rooms and 125 gaming tables.