Gaming | VIP activity tracking 32 percent higher post-New Year

Macau gross gaming revenue posted strong results in the week following the Chinese Lunar New Year, showing a 32 percent year-on- year rise led by VIP activity, according to Japanese brokerage firm Nomura.

Citing unofficial data, the analyst firm said that the estimated daily run for the week came in at just under MOP1.09 billion (USD134.8 million), compared with MOP840 million per day in the previous week. The rise is being fueled by a return of high- stake gamblers to Macau VIP rooms, where volume is tracking about 30 percent higher than January’s average.

Meanwhile, the average daily mass revenue per day was last week tracking 5 percent higher than the January 2019 average. With both major segments in mind, analysts at Nomura expect “around 10 percent growth” in gross gaming revenue for February.

Brokerage firm Sanford C. Bernstein holds a more conservative view, with its analysts forecasting year-on-year growth of between 2 and 5 percent. The dampened view was influenced by the enduring effect of the “continued enforcement of the smoking ban,” which entered into operation at the start of the year.

Deutsche Bank Securities said that their consultant data was showing growth of between 1 and 6 percent, slightly higher than a previous forecast on February 10.

Macau gaming returns fell last month for the first time in more than two years, confirming analysts’ earlier predictions for a gloomy January. Gross gaming revenue amounted to MOP24.9 billion, down 5 percent from a month earlier.

Due to the variable timing of the Chinese Lunar New Year, one of the most lucrative weeks in the Macau gaming calendar that falls either in January or February, the first two months of the year are sometimes considered in tandem.

According to official figures published by the Macau Gaming Inspection and Coordination Bureau, gross gaming revenue soared 36.4 percent in January 2018, while climbing only 5.7 percent in February. That was considered unusual, as the Chinese Lunar New Year fell in mid-February last year.

Together, the first two months of 2018 recorded a gaming take of MOP50.56 billion, up almost 20 percent from the MOP42.24 billion in gross gaming revenue a year earlier.

A 5 percent year-on-year increase in gaming revenues would bring February 2019 to somewhere in the region of MOP25.5 billion, while 10 percent would indicate MOP26.7 billion. Added to January, gross gaming revenue for the first two months of the year would grow to between MOP50.4 billion and MOP51.6 billion, or growth in the 0 to 2 percent range.

Should the more conservative estimates hold up, Macau can expect a year-on-year decline in gaming receipts across the first two months of the year.