Macau Revenue Grows at Strongest Pace in 8 Months
Published April 17, 2017 by Brett C
Macau's GGR increased by 18.1% to 21.2 billion patacas in March 2017. Strong growth in VIP gambling revenue and casual player revenue powered the Chinese gambling enclave to record levels.
Macau’s gross gaming receipts (GGR) increased by 18.1%, to 21.2 billion patacas in March 2017. This marks the fastest rate of growth for Macau casinos in 8 months. It also represents a dramatic turnaround since China cracked down on gamblers going to the world’s most popular enclave. The return of casual players and high rollers has boosted Macau gaming receipts considerably.
In February 2017, gross gaming receipts were up 17.8%, besting forecasts of a 15% increase. The Chinese authorities began cracking down on illicit gambling activity in Macau in 2015, and this precipitated a downturn in revenues. Now, VIP players and casual players are returning to Macau and revenues are on the up. For Q1 2017, a 13% uptick was recorded, valued at 63.48 billion patacas. Macau is China’s only legal casino enclave, and it dwarfs Las Vegas and Atlantic City combined.
Strong Growth Since Mid-2016
Multiple new casino resorts opened in Macau in the second half of 2016. These gambling entertainment complexes have been reeling in larger numbers of casual players and VIP players. When Chinese president Xi Jinping decided to crack down on the reckless flaunting of wealth by government officials in 2014, many of the high rollers stopped playing at Macau casinos. The 2-year slump has reversed course, as the earnings indicate.
Leading Japanese brokerage, Nomura has revised its expectations higher for Macau’s GGR year on year growth to 12% for the current year. Previous guidance was pegged at 8 %. For full year growth in 2017, a sharp upward revision from 2% to 14% has been made. Several new casinos will be opening in Macau, including Lisboa Palace, phases 3 & 4 of Galaxy Macau, as well as The Parisian.
Strong Earnings from Key Players
Macau’s earnings were boosted by strong performances from Melco International Development which reported a US$1.3 billion net profit for 2016, up dramatically from its full-year net profit in 2015 (US$12,985,926). The group chairman and chief executive of Melco International, Lawrence Ho is encouraged by the strong recovery in gaming revenue in Q3 2016. It will begin expanding into new markets such as Japan, Cyprus and South Korea. Between 2017 and 2019, and additional 3 tourist resorts inclusive of casinos are expected to be opened in Macau.
