Macau’s gross gaming revenue grew by 2.6% year-on-year to MOP$27.3 billion in October, the 27th consecutive month of GGR growth for Asia’s gaming hub and the highest monthly total in real terms in 2018.
Figures released by the DICJ show a substantial jump from September revenue of MOP$21.9 billion, due primarily to Golden Week in the first week of the month. Daily revenue was up 1.5% on February’s total, which coincided with Chinese New Year.
Although the numbers were strong, it is noticeable that they also represent two straight months of low single digit growth following a long period of double digit moves.
According to Union Gaming’s Grant Govertsen, October was negatively impacted by three key factors. They include the recent visit of Chinese President Xi Jinping to open the Hong Kong-Zhuhai Macau Bridge; the “long holiday factor” which saw the calendar provide an opportunity for Chinese travelers to take a longer than usual break and therefore head overseas rather than to nearby Macau; and the gradual decline in VIP’s share of Macau GGR, with holidays such as Golden Week traditionally stronger period for the VIP segment.
Bernstein’s Vitaly Umansky, Eunice Lee and Kelsey Zhu also pointed to a softening in the VIP segment.
“Recent China Macro data have shown weakness over the past couple months,” they said. “China Manufacturing PMI has been trending down year-on-year every month since June 2018 and hit 50.2 for October 2018 (a figure below 50 represents economic contraction).
“Other than weakening macro environment, we begin to observe tighter liquidity controls in China. As we have been highlighting, these trends in China will create headwinds for GGR growth in Macau.”
Estimates for November growth range between +2% and +7%.
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