Gross gaming revenue headed for September rebound

Gross gaming revenue might be heading for a September rebound, market analysts suggested yesterday, on signs of a VIP recovery.
The news comes as Macau’s Secretary for Economy and Finance warned that economic headwinds will persist into the third quarter.
September, which will round out the third quarter of the year, follows two consecutive months of year-on-year contraction, including the steepest revenue decline of the year to date in August. Gross gaming revenue during the first two months of the quarter amounted to about 48.71 billion patacas, down 6.1% from a year earlier. Until yesterday, the quarter was on track to be the worst in terms of growth since the gaming sector recovery in 2016.
However, the negative growth assessment obfuscates the actual revenue generated by Macau casinos. With gross gaming revenues of MOP24.45 billion and MOP24.36 billion respectively, both July and August fell only marginally below the average monthly revenue so far in 2019 (MOP24.77 billion).
September 2018 was the worst performing month last year in terms of gross gaming revenue, recording a take of just MOP21.95 billion. It is therefore worth noting that, because of the low comparison base, gross gaming revenue of MOP24 billion in September 2019 would represent a more than 9% year-on-year increase.
Sanford C. Bernstein and the stockbroker division of Nomura both issued notes this week showing early indications of growth for the month.
Citing estimates of VIP volume for the first eight days of the month, Bernstein analysts are forecasting single-digit growth in September of up to 7%, aided by an easier comparison base last year.
“GGR [gross gaming revenue] for September 2018 was impacted by Typhoon Mangkhut (and brought all Macau casinos to close temporarily for 33 hours over a weekend), which sets up for an easier year-on-year comparison,” stated the analysts, as cited by GGRAsia.
In the first six months of 2019, the mass market overtook VIP as the bigger share, rising to about 52% of total gross gaming revenue.
Nevertheless, the volatile VIP segment still wields significant influence on the oscillations of monthly gross gaming revenue. A more than 20% increase in the number of visitors to the SAR this year has failed to translate into both gaming revenue growth and non-gaming visitor spending.

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