Analysts are reporting that November is being kind to Macau with the enclave’s gross gaming revenue posting a positive trend so far. Sterne Agee analyst David Bain reports that revenues for the month to date are up 8 percent, or MOP24.9billion, compared to last year. That’s more favorable than Bain’s previous estimate of 6 percent at the beginning of the month. In terms of VIP revenue, Bain thinks the transfer of power on the mainland could have a big effect, adding: “The mainland’s orderly transition of power reduces political and other uncertainty, in our view. Combined with the potential for a rebounding China gross domestic product, we believe VIP gross gaming revenue trends may begin to show acceleration.”
On the other side of the coin, the enclave’s Secretary for Economy and Finance has poured caution on market optimism by predicting a slowdown in 2013. Francis Tam Pak Yuen is reported by Business Daily to have set the growth rate on gaming tax in next year’s budget at 6.3 percent or MOP92.4billion (US$11.6bn). The government is usually fairly conservative with its estimates so we can expect a number a little higher, and probably closer to 10 percent, than the reported figure.
Junket operator Asia Entertainment and Resources Ltd (AERL) has announced a drop in net income for the third quarter of 2012. The figure was down 16 percent to US$22.6million and is something that likely reflects the downturn in the VIP market over the past few months. Rolling chip turnover for the firm was also down by 32 percent to US$4billion and Man Pou Lam, AERL chairman, commented: “The tightening of credit to junket agents had a near-term impact on our overall performance that we expect will reverse over the mid-to-longer term.”