Macau gaming revenue rises 16.3 pct in April

Gross gaming revenue (GGR) in Macau rose 16.3 percent year-on-year in April to MOP 20.2 billion (US$2.5 billion), with analysts saying the growth was likely driven by strong VIP numbers.

The results brought GGR for the first four months of 2017 to MOP 83.6 billion, up 13.8 percent year-on-year compared to the same period in 2016, according to data from the Gaming Inspection and Coordination Bureau (DICJ). The regulator doesn’t provide a VIP/mass sector split in its monthly figures.

The results, which were released on Monday, were mostly in line with analyst expectations, which were forecasting between 13 to 17 percent growth in the month. However, many remain cautious on future trends due to the high volatility of the VIP sector.

“VIP GGR during the month was much stronger than we had expected,” Bernstein Research wrote in a note. “However, longer run we remain skeptical of a long sustained double-digit growth environment for VIP. We see VIP slowing down in 2H (and perhaps turning negative in Q4).”

China’s easing of its anti-corruption crackdown, coupled with recent economic stimulus is seen as helping liquidity and resurrecting the VIP sector.

Union Gaming analyst Grant Govertsen points out that “high net worth individuals in China are returning to normal patterns.”

“This is manifesting itself not only in a VIP gaming resurgence, but also in other channels like supercar and high end liquor sales. We are also seeing junkets that had effectively been on life support on the comeback trail,” he said.

Bernstein however, cautions that VIP’s rapid growth may not sustain over the second half of the year.

“VIP GGR during the month was much stronger than we had expected. However, longer run we remain skeptical of a long sustained double digit growth environment for VIP.”

“Looking forward to May, we anticipate May GGR to be in the MOP 21 billion range, a year-on-year increase of 12 – 15 percent. However, should VIP strength continue, the GGR growth could exceed expectations,” noted Bernstein.