Zona de Azar China – Macau Gaming Returns to Growth, Yet Casinos Still Face Hurdles

China.- June 3th 2019 www.zonadeazar.com Macau casinos returned to growth in May, yet the modest revenue gain is a sign that the world’s largest gaming hub still faces headwinds from regional competition and trade-war uncertainties.

Gross gaming revenue for Macau casino operators was 26 billion patacas ($3.2 billion) in May, up 1.8% from a year earlier, according to data from the Gaming Inspection & Coordination Bureau. That was slightly worse than the median analyst estimate of a 3% increase, and follows declines in March and April.
Accumulated revenue from January fell 1.6% to 125.7 billion patacas.

Key Insights

Despite May’s gains, a full recovery remains elusive for Macau’s casinos. A slowing Chinese economy and trade war have loomed over the territory this year, ending more than two years of uninterrupted revenue growth as the high-roller segment has weakened.

The stagnant results reinforce another trend that is worrying analysts: many high rollers are being lured away by attractive rival gaming spots. Suncity Group’s planned opening of a Vietnam resort, and Melco Resorts & Entertainment’s deal with Crown Resorts attest to the growing significance of regional diversification.
As the trade war with the U.S. drags on, analysts aren’t optimistic for the rest of the year. While the mass-market segment has shown some strength, analysts still forecast an overall drop in revenue for the full year, citing geopolitical uncertainty.

Market Performance

Macau casino stocks have been dropping amid the more pessimistic outlook. The Bloomberg Intelligence index of Macau casino stocks slid 20% in May, for the biggest monthly decline since September 2015. The worst performer was Wynn Macau Ltd., off 26%. For the year, the industry gauge is up 3.2%.

Edited by: Zona de Azar Press www.zonadeazar.com