Mass affected too
Macau saw its worst second quarter in five years, according to brokerage Morgan Stanley, with gross gaming revenue of MOP 108 billion (US$13.5 billion), down minus-8 percent quarter-on-quarter and minus-9 percent year-on-year, lower than analysts had forecast, reported the Asia Gaming Brief.
The brokerage attributes the latest bad news to weaker VIP and mass revenues. VIP fell 20 percent year-on-year, partly because of a new ban on phone betting, which took effect May 9. It also pointed to other factors such as the Euro Cup and the opening of Shanghai Disneyland, which may have put pressure on the mass segment. Mass revenues were up year-on-year, however.
UBS analysts expect GGR in the beleaguered jurisdiction to return to positive growth in the fourth quarter thanks to the openings of Wynn Palace and the Parisian Macao, AGB reported.
“We believe the upcoming projects are set to open in an overall stabilizing demand environment, as operators continue to focus on gross margins driven by continued mix shift to mass and disciplined cost environment. We believe the mass segment in Macau is showing improvement with YOY declines lessening, albeit at a slower rate than our previous estimates,” said analysts. “For the market overall, we now forecast Macau gross gaming revenue growth to turn positive in Q4.”
Among the new Cotai resorts planning VIP rooms are Sands China’s Parisian Macao and Wynn Resorts’ Wynn Palace. And after opening in October 2015 without a single VIP gaming room, Studio City, operated by Melco Crown Entertainment, may finally add the operations. Junket operator Suncity Group confirmed to GGRAsia that it is in the process of establishing a VIP room at Studio City. Bloomberg News reported that Melco Crown is planning to add three VIP rooms at the property.
