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Golden September

The gaming market saw a 16.1 per cent year-on-year increase in September’s gross gaming revenues, reaching MOP21.36 billion and exceeding analysts’ estimates. The Golden Week holiday effect is prompting an October that could see the highest monthly results since late 2014

MSAR gross gaming revenues increased by 16.1 per cent year-on-year in September reaching MOP21.36 billion (US$2.65 billion), according to data from the Gaming Inspection and Co-ordination Bureau (DICJ) released on Sunday.
“This beats consensus of 14 per cent increase (range of 11 per cent to 17 per cent increase) as the market outperformed despite the traditional pre-October holiday slowdown, as well as the lingering impact of August’s weather events,” Union Gaming analyst Grant Govertsen stated.
According to a survey of nine analysts conducted by Bloomberg, the median estimate was for a 14 per cent yearly increase in September.
A note from Deutsche Bank stated that although the early increase was higher than the overall analysts’ consensus estimates, it was below the bank’s own estimates of an 18.8 per cent year-on-year increase.
According to analysts from Sanford C. Bernstein, the average daily revenues for September were registered at MOP727 million, 3 per cent less than the MOP731 million daily average seen in August.

Strong quarter
The results marked the 14th consecutive month of gross gaming revenue increases in Macau, with gross gaming revenues for the third quarter this year rising 21.8 per cent yearly to MOP67 billion.
Deutsche Bank analyst Carlo Santarelli also stated that the group was expecting the DICJ to announce that the local VIP sector would register an increase in the third quarter of this year of around 38 per cent year-on-year, with mass tables and slot machines to register a rise of around 6 per cent
‘On a Company reported basis, we expect VIP growth of about 34 per cent with mass growth of about 10 per cent,’ the note informed.
With the VIP hold rate being ‘elevated’, Bernstein analysts stated they will continue to ‘voice caution’ in regards to the strength and volatility of the VIP sector, since high hold rates in VIP together with continued volume strength creates ‘volatility and lack of ability’ to forecast monthly trends accurately.

October coming
In regards to the gaming market performance for October, analysts agreed the Golden Week holiday will be a key factor for a strong performance in the month, with the Macau Government Tourism Office (MGTO) predicting the number of tourists this holiday week is expected to increase by as much as 5 per cent from the same period last year.
Last year, the city registered a total of 1.15 million tourist visitors in the period between October 1 and October 7, with 970,000 being from mainland China.
‘While expectations are elevated, a favourable Golden Week calendar, coupled with adequate VIP liquidity and strong advanced bookings bodes well for October,’ Santarelli informed.
A Union Gaming note estimated October gross gaming revenues will see a 10 per cent yearly hike, to MOP24 billion, making it the ‘highest absolute level’ since late 2014.
According to the Deutsche Bank analyst, taking into account win per day in October for the last five years, the month was expected to finish with a ‘full month result’ of US$3.14 billion, an increase of 15 per cent year-on-year, but with the bank estimating a stronger yearly rise of 15.7 per cent.
The Deutsche Bank note also predicted that the fourth quarter of this year would register an increase as high as 16.7 per cent year-on-year, with the full year able to achieve an 18.2 per cent annual increase to reach almost MOP263.83 billion.