Macau | VIP and mass up 21 pct and 20 pct y-o-y, respectively, in Q1 2018

Both the VIP and mass market gaming sectors saw yearly increases in the first quarter of the year, with analysts believing the results bode well for higher than expected gaming results in 2018 for local gaming operators

Macau (MNA) – VIP gross gaming revenues increased 21 per cent year-on-year in the first three months of 2018 in the Macau SAR to MOP42.95 billion, with mass market rising 20 per cent to some MOP33.79 billion, the Gaming Inspection and Co-ordination Bureau (DICJ) revealed this Monday.

‘This is good news on dual fronts,’ he Managing Director, Head of Asia Equity Research for Union Gaming, Grant Govertsen, said today in a note.

On the one hand, Mr. Govertsen stated ‘VIP growth remains strong yet not sky high and therefore is more sustainable from a business perspective while also being more politically acceptable.’

On the other, he claimed, ‘the profit engine that is the mass market segment is more robust than many had given it credit for when the year began and remains robust as summer approaches.’

Both sectors went up 6 per cent from the previous quarter, with Union Gaming stating on-the-ground observations and conversations with operators ‘over the recent weeks and months’ indicate that there has been an ‘uptick’ in mass foot traffic volumes across most casino floors.

‘This trend has continued into 2Q18, giving us confidence in our above-consensus estimates for most Big 6 Macau concessionaires in 2018,’ the note adds.

Gaming results from horse racing dropped some 3.2 per cent yearly in the first quarter of this year to MOP30 million with results from greyhound racing operations going up 10 per cent to MOP11 million.

With gaming revenues from non-VIP baccarat having jumped 24 per cent yearly to MOP25 billion, a larger increase than the one registered for VIP baccarat and other game types such as blackjack or slots, Mr. Govertsen believes this showed the ‘strength in the Chinese mass market player.’

‘[The Chinese mass market player] feels fairly robust across most tiers from the low-end tour groups (+36 per cent growth in Chinese-based group tour visitation in January and February) to premium mass customers,’ the note added.

Union Gaming also believes 62 per cent of total gross gaming revenues for the quarter has been generated in Cotai or Taipa properties, with 64 per cent of mass gaming and 59 per cent of VIP estimated for these areas.

‘We expect the delta between Cotai and peninsula to widen slightly this year even as we expect GGR on the peninsula to experience high single digit growth, Mr. Govertsen said.

[Edited by Sheyla Zandonai]

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