Gross gaming revenues for August are predicted to have remained flat or declined by two per cent year-on-year, according to analysts at Wells Fargo. This is better than the estimated consensus of a 3-4 per cent decline, and could be propped up by the ‘solid casino attendance’ the analysts noted for Wynn Palace’s opening day.
The group estimates a month-to-date average in daily revenues of about MOP583 million (US$73 million), a two per cent improvement sequentially from July, but a five per cent decline when compared to the year-to-date average.
Mixed bag
Forecasts for the rest of the year by Deutsche Bank indicate that total gross gaming revenue will contract by 7.2 per cent year-on-year for 2016, amounting to US$26.8 billion (MOP214.1 billion) in gross gaming revenue for the year.
As there was a 9.2 per cent year-on-year drop in second quarter gross gaming revenue, the analysts predict a year-on-year contraction of 3.7 per cent and 1.2 per cent in the third and fourth quarters, respectively.
Third quarter gross gaming revenue is predicted to equate to US$6.55 billion, and the final quarter of 2016 to yield US$6.78 billion in gross gaming revenue. This is still not likely to halt the year-on-year decline in revenues seen since the SAR’s peak in early 2014. These predictions are in line with comments from Galaxy Entertainment that it is still too early to call a bottom on the market despite signs of stabilization.
VIP back on top?
The predictions are based on estimates that revenues from mass gaming tables will see their first year-on-year increase during the third quarter of this year, rising by 3.2 per cent when compared to the third quarter of 2015, and reaching US$3.28 billion.
This would surpass VIP revenues by US$16.6 million, also due to a predicted 9.7 per cent year-on-year contraction in estimated VIP revenue during the period. However the VIP sector is predicted to outpace the mass in the fourth quarter of the year, reaching US$3.41 billion – still a year-on-year drop of 8.1 per cent, but outpacing estimates for mass of US$3.36 billion, based on a year-on-year increase of 6.9 per cent.
Predictions for 2017 by the analysts see the first year-on-year rise in gross gaming revenues, of 1.2 per cent, to reach total gaming revenues of US$27.14 billion.
This figure is driven by a predicted year-on-year increase of 4.8 per cent in mass market revenues to US$13.63 billion, and single-digit contraction in revenues from the VIP segment of 2.2 per cent – hitting US$13.5 billion. This would return the mass market to a dominant position during the year.
