Macau’s gross gaming revenue grew 16.1% year-on-year to MOP$21.36 billion in September, comfortably beating consensus and ensuring a 14th consecutive month of GGR growth.
With earlier estimates predicting growth closer to the 14% mark, September notched average daily revenue (ADR) of MOP$731 million – 3% below August ADR due to the ongoing impact of Typhoon Hato. Nevertheless, analysts expressed surprise as to how well the market responded to the devastation caused by Hato, the T10 storm that struck Macau on 23 August.
“As it relates to the weather events, the market bounced back remarkably quickly with virtually all of our on-the-ground conversations with casino operators and junket operators suggesting that trends had returned to normal within days of the devastating Typhoon Hato … and Typhoon Pakhar just one week later,” said Union Gaming’s Grant Govertsen.
September’s result saw 3Q17 come in at +21.8% year-on-year, showing almost identical growth to the second quarter which increased by 21.9%.
Hopes remain high for both October and Q4 with predictions of a particularly strong Golden Week result.
“For October, we expect GGR to reach approximately MOP$24 billion (+10%), which would be the highest absolute level of GGR since late 2014,” said Govertsen. “Based on our conversations with junket operators over the past week, as well as similar casino operator commentary, October’s Golden Week holiday is shaping up to be exceptionally strong and we therefore expect strong initial GGR growth indicators over the early days of the month.
“We further expect November and December to reach or exceed MOP$22 billion, or growth in the low to mid-teens. All in, we think the 4Q17 growth rate should be north of 13%.”
However, analysts at brokerage Sanford C Bernstein have warned that the VIP market remains volatile.
“We continue to voice caution about the strength (and volatility) surrounding VIP,” said Vitaly Umansky, Zhen Gong and Cathy Huang in a note.
“For October, the Golden Week holiday will be the key driver of the month’s performance. It is too early to gauge how strong October may turn out, but we are preliminarily estimating low-double digit growth (with delta being driven by VIP).”
