Macau gaming market sees promising growth in second quarter as slots lead the way
Newly released data released by Macau’s Gaming Inspection and Coordination Bureau (DICJ) shows the Macau markets are up 12% in Q2 when compared with the same period last year.
The accelerated growth saw Melco Resorts and Entertainment increasing its share of EBITDA. Gross gaming revenue (GGR) totaled 26 billion patacas ($3.2 billion) last April, a 1.8 percent year-over-year gain before gaining a further 2% in May.
Morgan Stanley, a global financial services firm, estimates VIP revenue in the quarter down in the high single digits. Mass growth accelerated from 10 per cent posted in Q1. The firm said it sees upside potential to Melco’s stock, given its luck-adjusted EBITDA is likely up 11 per cent, while MGM Resorts may see EBITDA down 10 per cent.
VIP baccarat revenue accounted for an estimated 55.7 percent of all casino GGR in Q2 2018, growing 17.7 percent to MOP83.99 billion ($10.4 billion) in the first six months of 2018. However, VIP baccarat revenue in the April to June 2018 period was 4.47 percent lower than the MOP42.96 billion ($5.32 billion) revenue it registered in the first quarter of 2018.
On the other hand, DICJ noted that the mass-market gambling, including play from slot machines, raked in MOP32.67 billion ($4.04 billion) in Q2. Slot machines led the mass market growth, registering 23.6 percent growth to MOP3.81 billion ($471 million) in the second quarter of 2018.
Revenue from live multi game products—those featuring table-style games with live dealers but electronic betting and electronic bet settlement—rose 7.7 percent to MOP661 million ($81.83 million) in Q2 from MOP614 million ($76.01 million) in Q1 2017.
In total, Macau’s casino GGR expanded by 17.2 percent to MOP73.71 billion ($9.12 billion) in Q2 2018 from MOP61.03 billion ($7.55 billion) in the same period last year. Gaming revenue for H1 2018 stood at MOP150.22 billion ($18.6 billion), compared to MOP126.38 billion ($15.64 billion) in the prior year period.
Union Gaming analyst Grant Govertsen forecast Macau’s gaming market would remain robust, registering double-digit growth in July.
“That mass outpaced VIP is also an upside surprise relative to most expectations and, trade war fears notwithstanding, is reason to remain bullish on the Macau names,” Govertsen said in an industry update dated July 16.