{"id":331,"date":"2019-09-18T00:00:00","date_gmt":"2019-09-18T00:00:00","guid":{"rendered":"https:\/\/gbc.ng\/macau-gaming-revenue-predicted-to-continue-drop-through-2019-end\/"},"modified":"2019-09-18T00:00:00","modified_gmt":"2019-09-18T00:00:00","slug":"macau-gaming-revenue-predicted-to-continue-drop-through-2019-end","status":"publish","type":"post","link":"https:\/\/gbc.ng\/index.php\/macau-gaming-revenue-predicted-to-continue-drop-through-2019-end\/","title":{"rendered":"MACAU GAMING REVENUE PREDICTED TO CONTINUE DROP THROUGH 2019 END"},"content":{"rendered":"

Macau is suffering from a gaming drought that has resulted in 2019 being slightly weaker than expected. There isn\u2019t much cause for alarm, given that the city\u2019s casinos are still\u00a0contributing significantly to Macau\u2019s wallet<\/strong>, and a slump every now and then is not anything out of the ordinary. It might be time, however, for Macau to see 2019 as a write-off, especially given Morgan Stanley\u2019s update that the city has yet to reach bottom for the year.<\/p>\n

The financial giant said in a report this past Monday that casino earnings in Macau \u201chave not bottomed\u201d and updated its 2019 gross gaming revenue (GGR) forecast to -3% compared to last year. Previously, it had expected to see just a -1% difference. Morgan Stanley analysts Praveen Choudhary and Thomas Allen added, \u201cDespite our expectation of September GGR growth of 4 percent year-on-year (after two months of negative growth), we expect negative GGR growth in November\/December.\u201d<\/p>\n

The drop is explained through several factors. The analysts believe that a recovery in VIP gaming could take place between now and the end of the year, but point out that VIP revenue has already deteriorated substantially over the past three months. They predict VIP revenue will end up being 17% lower this year compared to 2018 and add that next year\u2019s figure could be 2% lower than it was last year.<\/p>\n

Mass-gaming revenue has stayed relatively strong across the first eight months of the year; however, it is expected to drop as 2019 draws to a close. When the final numbers are in, Morgan Stanley analysts believe 2019 will have seen a 10% year-on-year increase in Macau\u2019s mass-gaming revenue, while 2020 will record a 7% increase.<\/p>\n

They added, \u201cOur concerns include slower premium mass business (based on commentary by various operators, including Sands China and Wynn Macau), as well as slower growth in room nights sold, owing to delays in new hotel openings.\u201d<\/p>\n

The annual performance means that the local industry won\u2019t be able to pay out certain dividends like it did last year. According to a report published last Friday, the latest Gaming Sector Survey, 2018 saw a year-on-year increase in spending on \u201cpurchase of goods, commission paid and customer rebate\u201d by 13.3% as the figure reached $8.6 billion.<\/p>\n

Of that amount, 54% went to commissions. $15.93 billion was distributed across the 12 months, representing an 11.2% increase compared to 2017. The tally comes from an evaluation of all gaming-related services, including casinos, horseracing, sports gambling and the local lottery. Last year was the fourth year in a row that the amount of commissions paid out has increased, but the trend may not continue after this year\u2019s weaker performance.<\/p>\n

\n