Macau gaming revenues up 23.7% in May

Macau gaming revenues up 23.7% in May

Monday, June 5, 2017 Posted by James Walker
The latest DICJ figures helped boost western casino stocks

May marked the 10th consecutive month of gaming growth in Macau, according to new data from the territory’s Gaming Inspection, and Coordination Bureau (DICJ).

Gross gaming revenues (GGR) in the world’s biggest gambling hub totalled $2.79 billion last month, up 23.7% on the $2.25 billion reported in May 2016.

Accumulated GGR as of May 31 stood at $13 billion, up 15.8% on the $11.3 billion achieved in the first five months of 2016.

The latest DICJ figures helped boost western casino stocks on Thursday, with Melco trading up 2.6%, Wynn Resorts up 1.8%, MGM Resorts International up 1.2% and Las Vegas Sands Corporation up 1%.

Discussing Macau’s May results, Telsey Advisory Group casino analyst David Katz said: “We believe a strong start to June could lead to the street’s estimates, and ours, to move higher ahead of earnings reporting season in mid-July.

“Coupled with the 16.3% growth in April, we believe it is a fair conclusion that the new properties in the market, including LVS’ Parisian and Wynn Palace are growing the market rather than cannibalising the existing properties.”

At the end of the first quarter of 2017 there were 39 casinos in Macau run by six concession holders: 21 by Sociedade Jogos de Macau, six by Galaxy Casino, four by Venetian Macau, four by Melco Crown Jogos (Macau), two by Wynn Resorts (Macau) and one by MGM Grand Paradise.

“Based on our on-the-ground conversations, we believe that the mass market trajectory seen in 1Q17 (up 15%) has carried through into 2Q and is likely now in the high teens,” said Union Gaming analyst Grant Govertsen.

Amid the strong GGR results, however, Bernstein analyst Vitaly Umansky urged a degree of caution when looking at Macau trends, particularly surrounding VIP revenues.

“We continue to voice caution about the accuracy of weekly channel check estimates and the strength (and volatility) surrounding VIP,” Umansky wrote on Thursday.

“High hold rates in VIP along with continued volume strength creates volatility and lack of ability to more accurately forecast the monthly trend.”

Totally Gaming says: With 10 consecutive months of growth now under its belt, Macau continues to bounce back after more than two years of declines. Although some analysts have voiced concerns surrounding the ongoing volatility of the region’s VIP market, recent casino openings and a continued focus on mass-market players should translate to a full year of month-on-month gains for the world’s biggest gambling market.

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