Gaming | March slowdown projecting poor first quarter

A slowdown in VIP casino activity over the second half of March is expected to dampen full-month gaming revenues when the results are released on Monday.

Gaming analysts had held a brighter forecast earlier in the month when the average daily run rate was signaling strong returns. Daily earnings averaged about MOP860 million for the first 10 days of March, representing year-on-year growth of between 2 and 3 percent when extrapolated to the month-end.

At the time, analysts appeared to agree on a growth prediction for March that ranged between a minor contraction and up to a 5 percent expansion.

However, Japanese brokerage Nomura now says that average VIP daily gambling volume in March could be down by as much as 19 percent. The slowdown has led the brokerage firm to revise its earlier forecast of between 0 and 5 percent year-on-year growth to a decline of between 3 and 5 percent.

Sanford C. Bernstein said earlier this week that average daily revenue in March was tracking about 12 percent lower than in February and 1 percent lower than January. Compared with a year earlier, March 2019 is tracking about 5 percent lower at about MOP795 million per day.

A 5 percent contraction in March would make it the worst performing month of the year to date, rounding out gross gaming revenue for the first quarter of 2019 at approximately 2 percent lower than the same period in 2018.

Macau gross gaming revenue for the first two months of 2019 amounted to MOP50.31 billion, a 0.5 percent contraction from the same period last year. Considering January and February together each year offsets the increasingly unpredictable effects of the Chinese Lunar New Year period, which can fall in either month.

Gross gaming revenue in March 2018, the comparison point for Monday’s results, amounted to MOP25.95 billion – a 22.2 percent rise from the same month in the preceding year.