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Macau GGR sees first annual decline; turnaround expected in 2015


Gross gambling revenue in Macau suffered the first annual decline in 2014 since records began in 2002.

According to figures from the Gaming Inspection and Coordination Bureau, GGR was down 2.6 percent to 351.5 billion patacas ($44 billion) in 2014. For December, there was a record monthly drop of 30.4 percent.

Macau has seen seven straight months of falling revenue after a crackdown on corruption in mainland China caused VIP gamblers to lay low. The mass market sector has also since slowed and analysts aren’t expecting any real improvement until new properties begin to come on line in the second half of 2015.

The annual pace of decline was slightly worse than the 2 percent drop that analysts had been expecting, according to Bloomberg figures.

Morgan Stanley said in a note, however, that valuations finally look attractive and that it expects to see a supply-led recovery from Q1. Galaxy, Melco Crown, SJM and Wynn will all have incremental tables in 2015. Analyst Praveen Choudhary also noted that rate cuts would help liquidity and the Chinese property outlook, which are both positive for the VIP and premium mass sectors.

 

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