17.8 percent growth | Gaming revenue hits two-year high

Gross gaming revenue (GGR) last month reached MOP23 billion (USD2.9 billion),  marking a two-year high since February 2015, when some MOP19.5 billion was recorded. In terms of year-on- year growth, last month’s GGR posted the strongest gain in exactly three years, rising 17.8 percent year-on- year, according to figures posted on the Macau Gaming and Inspection Bureau’s website.

The seventh consecutive month of incline is the latest sign of market stabilization in Macau’s gaming sector after a two and a half year recession that saw gross gaming revenues halved from their height in February 2014.

The rate of growth beats not just analysts’ expectations for February, but also discredits speculation that the gaming rebound in the city was coming to an end – a hypothesis based on slowing year-on-year growth registered in the previous three months of November (+14.4 percent), December (+8 percent) and January (+3.1 percent).

February’s growth might be partly attributed to the timing of the Chinese Lunar New Year, which fell in January in 2016, but was split between the first two months of 2017. That might also go some way to explaining the 3.1 percent growth last month.

Shares in Macau’s gaming operators reacted positively to the results, posting strong gains following the announcement yesterday. Galaxy Entertainment, Wynn Macau, Sands China and MGM China recorded 4.3 percent, 3.5 percent, 3.4 percent and 2.9 percent growth in their share price respectively.

The results come just days after Bloomberg reported that Kwok Chi Chung, president of the Association of Gaming and Entertainment Promoters of Macau, claimed some junkets in the city had seen their quarterly revenue grow by one-fifth compared to last year.

Other analysts point to the opening of new resorts in the territory during the second half of last year as the source. The claim the resorts, The Parisian Macao and Wynn Palace, have been successful in attracting both casual gamblers and high-rollers.

“While it is hard to call the last week’s results a trend, the industry has showed clear signs of stabilization,” analyst Richard Huang told Reuters.

Another analyst, Vitaly Umansky of Bernstein, told the media agency that although February had seen a significant increase, March was unlikely to follow suit and could observe “a slowing VIP environment”.

VIP revenue is reported to constitute around 55 percent of total gaming receipts in the territory, however some analysts challenge this estimate, claiming that the true figure is perhaps as low as 45 percent.