Macau gaming revenue reaches $2.9B in November

Macau posted gross gaming revenue for November of $2.9 billion — the second-highest so far this year, bringing the 11-month total to $30.4 billion.

The 23 percent jump of gross gaming revenue — often called “gaming win” — in November lifted the year-to-date total above $30 billion for the first time since 2014.

“Macau continues to see a better quality gaming customer,” said Grant Govertsen, an analyst at Union Gaming. “In other words, lower quality visitors are generally being replaced by higher quality visitors.”

November’s number were all the more impressive because of the high comparison with year-earlier period, Govertsen said in a note to clients.

Las Vegas gaming companies, including MGM Resorts International, Las Vegas Sands Corp. and Wynn Resorts Ltd., through their subsidiaries play a major role in Macau.

Revenue growth has been stronger for operators of casinos on Macau’s Cotai Strip, such as Sands China Ltd., Wynn Macau Ltd., Galaxy Entertainment Group Ltd and Melco Resorts & Entertainment Ltd.

But SJM Holdings Ltd and MGM China Holdings Ltd have seen their market share erode while their Cotai Strip resorts have been under development. MGM’s venue is due to open in January while SJM’s is not likely to open until closer to 2019, analysts said.

Macau gaming revenue growth is being bolstered by a confluence of factors, including strong economic and property price growth that is enriching visitors, better VIP lending conditions and the easing of a corruption crackdown.

A government-led attack on graft launched in 2014 drove wealthy players from Macau, leading to 26 months of consecutive declines in gaming revenue.

VIP clients have driven the blistering growth this year, analysts say.

The red-hot growth streak in the Chinese gaming province should continue into 2018, led by wealthy clients, Govertsen anticipates.

Union Gaming forecasts Macau gross gaming revenue to jump in the mid-teens next year, which would put the yearly total close to $38 billion. That would still fall short of the 2013 and 2014 totals, which each surpassed $40 billion.

While revenue is recovering, it is still below the all-time highs hit in the run-up to the government campaign, hovering around 2011 levels, data from Thomson Reuters Datastream showed.

Analysts estimate full-year revenue growth of 18 percent to 20 percent for 2017, at $33 billion to $34 billion, mainly due to the lucrative but highly volatile, big-spending VIP segment. That would mark the first annual growth in three years.

Meanwhile, pressure on casino operators to develop non-gaming attractions — favored by a government keen to diversify Macau’s economy — is increasing as authorities start to determine what will happen to the six operating casino licenses once they start to expire in 2020.

The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson. Las Vegas Sands Corp. owns Sands China Ltd.

Reuters contributed to this report. Contact Todd Prince at tprince@reviewjournal.com or 702-383-0386. Follow @toddprincetv on Twitter.