Macau Casino Revenue Up For 21st Consecutive Month in April

In April, Macau’s casino market generated MOP25.7 billion ($3.18bn) in revenue, higher by 27.6% compared to the same month a year ago, according to the latest results released by Macau’s Gaming Inspection and Coordination Bureau.
The stellar growth rate beat the expectations of analysts who had been forecasting a rate of between 18-22%, with the level attained despite this year’s calendar having one less Saturday than April 2017.
VIP and Mass Market Gains
Grant Govertsen from Union Gaming Securities Asia said that the solid numbers were helped by impressive gains noted in both of Macau’s VIP gambling segment and its mass market. Overall, the world’s biggest gambling hub produced an average gross gambling revenue (GGR) of MOP858 million (US$106m) per day, and as Govertsen explains:
“The growth came despite an unfavorable calendar with one fewer Saturday and was against a relatively tough comp of +16 percent. On a GGR per day basis, April’s MOP858 million was impressively in line with both of the recent holiday months: October (Golden week) at MOP859 million and the combined Jan/Feb (Chinese New Year) at MOP857 million.”
21 Months of Growth
From 2014 to mid-2016, Macau’s casino market suffered its worst downturn ever, with its monthly gross gaming revenue continuously falling, sometimes by as much as double-digits. The dramatic situation was a result of an anti-corruption campaign launched by Chinese President Xi Jinping, but after he began to ease back on his targeting of the industry almost two years ago things began to improve, with April’s gambling result now stringing together 21 consecutive months of growth. For the first four months of 2018, gambling revenue is currently higher by 22.2% versus the same period in 2017.
17% Forecast for 2018
Looking ahead, Union Gaming Securities Asia said that it was now expecting GGR growth in the second quarter to accelerate compared to the first quarter. The brokerage firm also said that it remains bullish on the market, and has a high degree of confidence in its initial prediction of a 17% GGR growth forecast for the whole of 2018.
Share Prices Jump
Macau has around 40 casinos which offer a combined 6,419 table games and 15,622 slots, as well as various attractions to draw in families and tourists, including luxury hotels featuring restaurants, clubs, spas, and extravagant world class themes such as a half-scale Eiffel Tower, and a spectacular street and canal area modeled on the romantic city of Venice.
Today, a number of major gambling companies operate casinos in Macau (Sociedade de Jogos de Macau, Galaxy Casino, Sands China, Melco Crown, Wynn Resorts, and MGM Grand Paradise), many of which experienced impressive jumps in their stock prices following April’s result being released. Shares in Wynn Resorts, for instance, rose by 2.4% to $190.56 in early trading, while Las Vegas Sands noted a 1.3% increase to $74.29, and Melco Resorts & Entertainment experiencing a 1.9% rise in its share price to $31.80.
Needless to say, US firms are heavily invested in Macau, and have managed to offset slow growth back home with the massive gains they have made in China’s only legal gambling resort. These days, Wynn Resorts earns about 75% of its revenue from Macau, while Sands is not far behind with 60% of its earnings derived from the island.
Galaxy Revenue Soars 32% in Q1
Galaxy Entertainment Group Ltd, which runs six casinos in Macau, has just released its financial result for the first quarter, revealing a 32% surge in revenues to US$2.36 billion versus Q1 of 2017. While the casino operator recorded a 17% revenue increase in its mass market, VIP revenue, on the other hand, jumped by a massive 44% year-over-year. Galaxy Entertainment has planned a number of expansion projects going forward, and as the firm explains:
“Our strong balance sheet combined with substantial cash flow from operations allows us to return capital to shareholders via dividends and to fund our development pipeline and international expansion plans.”