Analysts are tentatively suggesting that February could see the first month in nearly two years in which Macau’s casino gaming revenue shows positive growth. This theory primarily hinges not on some dramatic turnaround in China’s economic outlook or government policies, but in fortunate timing.
For one thing, this year’s Lunar New Year festivities kick off on Feb. 7, whereas last year’s holiday didn’t begin until Feb. 19. Lunar New Year is traditionally preceded by a lull in gaming revenue, as mass market gamblers rein in their spending so they can blow their wad during the lucky holiday period.
That means most of this year’s lull took place in January, so February 2016 already has a leg up over last year. And 2016 is a leap year, meaning there’s one extra day in which to earn revenue this month (even if that day is a Monday).
There’s also the fact that Macau’s downturn was already up to full speed last February, which made for some truly horrific year-on-year comparisons with the early part of 2014, which now seems like some mythical golden age of inexhaustible VIP bounty. But from this point forward, the comparisons should get a little easier.
When it’s all said and done, Union Gaming analyst Grant Govertsen suggested this happy confluence of events could produce a 2% year-on-year revenue gain. CIMB analysts were even more bullish, predicting a 5% rise.
But there are no such magic talismans in March, when Govertsen suggests the numbers will plunge back into negative territory before possibly staging a minor rally this summer. Bottom line: the year of the monkey will continue to throw feces at Macau for the foreseeable future.
GALAXY’S LUI BELIEVES THE WORST IS OVER
Joining the ‘think positive’ party is Galaxy Entertainment Group deputy chairman Francis Lui, who offered words of encouragement for Macau’s beleaguered junket operators. Despite the fact that junkets continue to close VIP rooms like Oliver Reed used to close bars, Lui told reporters on Monday that ‘the “worst is already over” for Macau’s gaming industry.
Framing the junket industry in Darwinian terms, Lui said the two-thirds reduction in the number of the city’s licensed VIP gaming promoters since Macau’s heyday had actually done a service by weeding out the weaker operators. Echoing recent comments by Las Vegas Sands’ Sheldon Adelson, Lui insisted that he saw signs that Macau’s gaming market had stabilized and Lui hoped GEG would post positive growth when 2016 was in the books.