Macau GGR seen picking up after first fall in five years in June

    Macau’s gross gambling revenue fell 3.7 percent in June, dropping for the first time since June 2009, though analysts expect a pick up in the third quarter.
    According to the Gaming Inspection and Coordination Bureau gross gaming revenue was 27.2 billion MOP ($3.4 billion).
    Analysts estimate mass revenue growth continued to be strong, up about 30 percent, while VIP revenue was likely to have been down between 15 and 20 percent.
    The FIFA World Cup, which began on June 12, was widely expected to provide a major distraction and reduce gambling revenues as it has during previous tournaments.
    For the second quarter as a whole, revenue was down 11 percent, making for the largest sequential contraction since Q3, 2008.
    “This past quarter has been particularly tough for Macau given macro weakness in China, a junket incident and changing political climates in China,” UBS said in a note. “We expect sequential revenue growth to resume in Q3 with the mass segment entering the seasonally strong summer months and some stabilization in VIP volumes.”
    However, the firm said it still expects subdued headline revenue growth in the mid-to-low single digits in the second half of the year. It expects the mass segment to expand by 18 percent to 23 percent in the second half, despite a weaker Q2.
    It said it sees the mass segment up 18 percent to 19 percent in 2015 to 2017 driven by the additional capacity coming on line from new Cotai developments and the rising middle class in China.