Macao’s gaming revenues rose
Macao’s casinos reported their seventh consecutive month of revenue growth in February 2017. Casinos’ February revenues rose 18% year-over-year (or YoY) to ~$2.9 billion, or ~23 billion Macanese pataca. This growth was far above analysts’ consensus estimate of 7% YoY.
Most of this growth resulted from the Chinese New Year holiday, which began on January 31, 2017, and continued into February. The impact of the holiday season was amplified by increased VIP demand. Added capacity due to newly opened integrated casinos also ensured that peak demand was fully catered to. VIP revenues are estimated to have risen 20% YoY. Mass market revenues rose 15% YoY.
To smooth the impact of the holiday season, analysts often combine revenues for January and February. The combined revenue for the two months rose 10.6% YoY—again, higher than analysts’ consensus estimate of 9%.
In 2016, Macao’s casinos’ revenues fell 3.3% YoY to ~$28 billion, or 223.2 billion pataca. In 2015, revenues fell 34.3% to 351.5 billion pataca, and in 2014, revenues fell 2.6% to 351.5 billion pataca. Macao’s casinos’ revenues were on a 26-month downfall from June 2014 to July 2016, owing to the Chinese government’s crackdown on corruption.
A long way to go
Though February 2017 was a remarkable victory for Macao’s casinos, their revenues are still a long way away from their May 2014 level of ~32.4 billion pataca before the Chinese government crackdown began, and they’re well below their January 2015 level of 23.7 billion pataca six months into the crackdown.
Each month from October 2011 to January 2015 had higher revenues than February 2017’s revenue. This span of time shows the breadth of the task Macao casinos have ahead of them.
Despite this daunting task, most analysts believe that Macao’s casinos are set for growth in 2017, primarily driven by the mass market. According to GGRAsia, analysts expect these casinos’ March 2017 revenues to rise in the range of 9%–11% YoY as their VIP segments continue to strengthen.
For 2017, analysts also expect Macao’s casinos’ revenues to rise 8%–10%. However, the Macanese government maintains its forecast of 200 billion pataca, or $35.4 billion, in revenues.
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