Gaming revenues drop for fifth month

2014/11/5

From：Macau Business Daily

It’s worse than feared. Macau casinos raked in MOP28 billion (US$3.5 billion) in October. A whopping 23.2 percent less than a year ago. The biggest drop since the financial crisis.

Macau’s gross gaming revenue sank a record 23.2 percent during October, making it the largest drop ever to be registered in the Special Administrative Region, since the government started publishing monthly results in 2005.
According to the data announced yesterday by the Gaming Inspection and Coordination Bureau (DICJ) during October casinos in Macau pulled in MOP28 billion (US$3.5 billion), while during the first 10 months of 2013 they generated a gross gaming revenue (GGR) of MOP36.6 billion (US$4.6 billion).
The 23.2 percent plunge is worse than expected by gaming analysts that were predicting a fall between 21 and 23 percent. However, the results announced are not a surprise, as last Monday the Secretary of Economy and Finance said the decrease in gaming revenues would exceed 20 percent.
The fact that last month’s data comes off a high base, as October 2013 was the second-best month for the gaming industry (MOP36.6 billion), only behind this year’s February (MOP38 billion/US$4.8 billion), partially explains the 23.2 percent drop.
The previous record fall was set in June 2009, when gross gaming revenues decreased 17.4 percent at the time to an amount of MOP8.3 billion (US$1 billion). In the aftermath of the financial crisis of 2007/2008, GGR decreased for seven consecutive months, from December 2008 to June 2009.
As for the current year, this is the fifth month in a row that gross gaming revenues shrank in year-on-year terms. From July onwards, the trend has been for the pace of the drop of GGR to increase steadily, as in July it decreased 3.6 percent, then 6.1 percent in August, 11.7 percent in September and last month 23.3 percent.
According to Union Gaming Research, the trend is for GGR to continue to decline for the rest of the year, which would result in a 2 percent drop in yearly terms from 2013 to 2014.
‘Assuming that November and December look more like September (e.g.) in line with the low watermark of about MOP25.5 billion) we currently expect declines of 16 percent and 24 percent, respectively, to round out the year. This would result in total 2014 GGR down 2 percent to MOP355 billion (US$44.4 billion)’, the report of Union Gaming Research explains.
The gaming analysts at Union Gaming Research believe that the VIP segment will continue to be affected by the anti-graft campaign of President Xi Jinping in Mainland China. However for them, December will mean further disruption for this segment due to the visit of Xi Jiping to Macau as part of the 15th anniversary of the handover.

Sands China tops
market share

In October, Sands China returned to the first position in terms of market share, overtaking Galaxy. The company owned by Sheldon Adelson increased its market share from 21.8 percent in September to 23.7 percent in October, according to Business Daily calculations. As for the group founded by Lui Che Woo, after a historical first place in September, it dropped from first place to third in one month, as its market share decreased from 22.9 percent to 21.4 percent.
The group founded by Stanley Ho Hung Sun, SJM, climbed from third to second position increasing its share from 20.9 percent to 23.5 percent but failed to top the chart.
As for the other operators, Melco Crown occupies the fourth position (increased from 12.7 to 14.3 percent) followed by Wynn (decreased from 10.9 to 8.9 percent) and MGM (decreased from 10.8 to 8.2 percent).

Copyright@Macau Business Daily