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Macau breaks two-year downward trend

Macau posted its first year-on-year increase in gross gaming revenue in August, after a 26-month slump, according to statistics released by the Gaming Inspection and Coordination Bureau (DICJ).

The gaming hub raked in MOP 18.8 billion ($2.4 billion) in gross gaming revenue in the month, an increase of 1.1 percent year-on-year.

While the results “could have been better”, according to Union Gaming analysts, this was better than consensus of -1.5 percent.

“...August trends were good, especially at the mass market level. However, we believe the growth in GGR was likely attributable to some number of high-end players coming to Wynn Palace, which was open for 9 days during the month,” said the brokerage.

Average daily revenue (ADR) for the month was MOP 608 million, which is 6 percent higher than July’s MOP 573 million, said Bernstein analysts.

“We maintain our view that the rest of 2H 2016 should experience a pickup in year-on-year growth driven by a slowing decline in VIP GGR and new project openings helping drive Mass growth.”

Bernstein said it anticipates September GGR to be in the +1 percent to +3 percent range, with mass showing double digit increases of 10 - 12 percent and VIP down high single digits from -8 to -11 percent.

In regards to Wynn Palace’s first week since opening, Bernstein said it was “moving in the right direction.”

“VIP and Base Mass looked visibly robust, but Premium Mass (which is most time consuming to establish and grow) may have been light. Not having a smoking Premium Mass area is somewhat of a disadvantage vis-a-vis properties like City of Dreams, for example. The ramp up in new project openings will take time, so investors will need to be patient,” said the analysts.

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