Macau To Witness Drop In GGR In April But To Rebound Quickly
Based on projections made by Nomura Instinet LLC, Macau’s gross gaming revenue (GGR) in April will be between MOP24 billion and MOP25 billion. This is a drop from the previous year’s April GGR of MOP25.7 billion. However, it’s not all bad news. The brokerage firm predicts that the gaming market will recover soon after.
This new projection comes after the data from the second week of April has come in. Nomura puts the current GGR for Macau at around MOP729 million a day for the second week of April. Combined with the first week, the average GGR is now MOP743 million a day. The data shows that the GGR is notably lower than previous year’s GGR by 11 percent.
In a statement, Harry Curtis, Daniel Adam and Brian Dobson, all analysts from Nomura, wrote
By segment, we estimate that: average daily mass revenues were about 5 percent to 7 percent lower than the average in March, VIP hold percentage was about 3.1 percent (versus the normalised hold range of 2.7 percent to 3 percent), and VIP volume growth is tracking about 5 percent to 7 percent lower sequentially versus last month’s average.
Another Projection
It is not just Nomura predicting a drop for Macau’s GGR. Sanford C. Bernstein Ltd also revised its GGR estimates for April. They expect Macau casinos to record a loss of 9 to 12 percent in April compared to earlier estimates. Sanford analysts have also made their estimates based on the lower GGR collected in the first two weeks of April.
According to Sanford’s data, the current GGR is at the rate of MOP729 million a day. This is 14 percent lower than last year’s GGR. However, Sanford Bernstein did point out that last year’s GGR tally for April would be hard to beat.
However, gaming analysts are predicting a recovery for Macau’s gaming industry. They say that the month of May will see changes in the market, mainly due to a recovering credit cycle in China. This can potentially fuel VIP guests to visit Macau and boost gaming revenues. This comes as no surprise as Chinese high rollers are one of the main sources of revenue for Macau casinos.
Analysts also estimate that VIP hold rate will stabilize as the year progresses. The high VIP hold rates have stabilized in March, while the number of VIP guests have been dropped down to single digits.
It will be interesting to see whether the predictions hold or whether Macau will continue to suffer a drop in VIP revenue and GGR.
David WalkerAuthor
David is our resident 'down under' contributor, letting us know what is going on in the southern hemisphere, he is also keen blackjack player
