Macau casinos recorded their second biggest revenue drop on record in March, the 10th consecutive month of year-on-year revenue declines.
Gaming revenue fell 39.4% to MOP 21.5b (US $2.7b) in March, a decline eclipsed only by February’s 49% fall. Macau’s gaming sector has been in a death spiral ever since Beijing ramped up its anti-corruption measures to stem the flow of public officials blowing public money at Macau’s VIP gaming rooms. For the year-to-date, Macau gaming revenue is down 36.6% from the same period last year.
Gaming analysts are now frantically reassessing their full year 2015 revenue projections. A median estimate of analysts surveyed by Bloomberg puts the expected annual decline at 21%, over twice the figure forecast just two months ago, and significantly greater than the 2.6% annual decline recorded in 2014.
As ever, the thinning herd of VIP gamblers drove most of the most recent month’s decline. On Monday, CIMB Securities issued a note saying it believed VIP revenue was down 51% in March compared to a 19% decline for the mass market sector. Macau’s Gaming Inspection and Coordination Bureau will release official VIP/mass figures for Q1 later this month.
Among Macau’s six casino concessionaires, Galaxy Entertainment Group (GEG) is reportedly having the most success in maintaining its VIP business. This week, Deutsche Bank put GEG’s VIP market share over the first two months of 2015 at 26%, up from 24.6% at the end of 2014. Former VIP market leader SJM Holdings has seen its share slip from 23% last year to 21% in 2015. Melco Crown Entertainment is also grabbing VIP share from competitors, boosting its share from 13% last year to 18.3% in the year to date.
As for the mass market share, Deutsche Bank has Sands China as the clear leader with 31.6%, well ahead of runner-up SJM at 24.5% and third-place finisher GEG at 16.4%.