Review G2E ASIA 2015
Macau’s June GGR saw little benefit from the new Broadway Casino opening BUSINESS IN INTERESTING TIMES
G2E Asia fell at a strange time for Macau with revenues shrinking dramatically but with the physical size of the market set to boom with the onset of half a dozen new casinos.
Galaxy Macau Phase II yielded a new era with its Broadway entertainment district. Although it asked for 500 gaming tables, Galaxy Macau was only allowed 150 new-to-market table games for Phase II. The situation regarding the table caps and the other new casinos is just one example of Macau’s uncertainty. Staffing is another whilst sales of Multi-Level Progressives have currently ground to a halt awaiting new technical standards.
Wynn Resorts CEO Steve Wynn said recently: “There’s no question that uncertainty is the plaguing word of the day in Macau. Hopefully, our government in Macau will calm that down and put some certainty back into the picture. We never know quite what to expect these days.”
The situation with revenues caused by China’s crackdown on austerity is the most concerning. The sector has just celebrated an anniversary that few would have expected a few years ago and that no one wants now with 12 straight months of decline being confirmed by a 37.1 per cent fall in May’s revenue.
Gross gaming revenue came in at 20.35bn patacas, still a whopping US$2.55bn for May, according to Macau’s Gaming Inspection and Coordination Bureau.
The average fall for those 12 months has been 38.5 per 5 6
Phil Martin, Editor G3Newswire
said: “We aren’t expecting further material downside from here. However, we acknowledge that trends could still be choppy for some number of months to come before we see any breakout to the upside.”
“The situation with revenues caused by China’s crackdown on austerity is the most concerning. The sector has just celebrated an anniversary that few would have expected a few years ago and that no one wants now with 12 straight months of decline being confirmed by a 37.1 per cent fall in May’s revenue.”
cent. The year so far has seen over $24bn wiped out from the market value of the city’s six operators. The economy has been left vulnerable too with output falling to 24.5 per cent in the first quarter, worse than Greece and Ukraine.
Grant Govertsen, an analyst at Union Gaming Group,
Mr. Govertson’s Union Gaming has published a report on the state of the market stating: “We believe that there exists a large pool of VIP customers who are patiently sitting on the sidelines waiting for the all- clear message to be sounded. Although we do not believe the anti-corruption drive will cease, we do believe that at some point, it will begin to wane, and those who feel the least at risk will return to Macau.”
The market is pitching its hope on a series of new openings over the coming years with the first Galaxy Macau phase 2 opening last week.
Ms Karen Tang, a Hong Kong-based analyst at Deutsche Bank AG “The market believes in ‘supply creates demand’ and consensus still forecasts a Macau recovery in 2016. If the first two openings fail to stimulate demand by year end, consensus would see another major cut.”
Mr. Govertsen added: “We continue to believe that the new Galaxy supply will be more of a share taker than a market grower, although it will take many weeks or months to determine the exact dynamics.”
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