by Gaming revenue in the world’s casino capital beat expectations in March, even though it fell marginally compared with a year ago and decreased 0.5% in the first quarter. Gaming revenue numbers matter, to be sure, but not as much as the underlying trends creating those numbers. Those trends, like the numbers, paint a mixed picture with plenty to like, albeit perhaps not right now.
For March, Macau’s casino regulator DICJ reported gross gaming revenue of 25.84 billion patacas (MOP; US$3.23 billion), down 0.4% from March last year. The consensus forecast pegged GGR to fall by 3%. Mass revenue, accounting for a solid majority of the total, likely grew in high single digits while VIP revenue fell in the low double digits.
Analysts report revenue accelerated toward the end of the month. Investment advisory Sanford Bernstein suggests the week ended March 31 was the most lucrative non-holiday week in more than a year, with gaming revenue estimated at MOP964 million.
March benefited from luck, with above normal VIP win rates, analysts say. JPMorgan analyst DS Kim reports March win rates for the top three junkets, responsible for some 75% of VIP volume, ran as high as 3.5%, 40 basis points above average and 60 basis points above the theoretical baseline. Without that boost from the fates, JPMorgan estimates GGR would have fallen 3%, in line with the consensus forecast.
Union Gaming managing director in Macau Grant Govertsen points out that March revenue was higher than February GGR of MOP25.37 billion. March – with three more days on the calendar – beating February is “not uncommon,” Govertsen writes, but “considering the macro backdrop, a sequential increase should be viewed positively and as a sign of resilience in the market.”
First quarter GGR of MOP76.15 billion fell 0.5% from a year earlier, nonetheless beating expectations. Similar to March estimates, VIP revenue likely fell in low double digits, and mass revenue grew in high single digits. Sanford Bernstein notes that gaming revenue soared 20.5% during the first quarter of 2018, a very tough performance to match, and this year faced the headwinds of mainland China’s slowing economic growth and Macau’s total casino smoking ban.
