Despite Macau’s promising recovery, Chief Executive Fernando Chui is keeping his expectations low for the city state’s gambling revenue next year.
In October, the world’s biggest casino hub posted an 8.8 percent year-on-year increase to MOP21.82 billion (USD2.73 billion)—its best month since January 2015, when GGR totaled MOP23.84 billion. It also marked that third consecutive month of year-on-year growth for Macau, which recorded its first growth in August after 26 straight months of decline.
The government, however, is not budging from its conservative forecast for 2017, despite the casino industry’s steady recovery. Chui, in particular, is sticking with his expectations that the economy will “grow by low single-digits in 2017.”
At a briefing in Macau, the chief executive said his revenue target of MOP200 billion (USD25 billion) for 2017 remains unchanged.
“We didn’t set a higher target than this year because we think there are still uncertain factors,” Chui said, according to Bloomberg.
Macau’s October growth, which exceeded analyst expectations, was attributed to newly opened casino resorts that boosted spending in the special administrative region.
“We would expect all of the Macau Big 6 names to rally on today’s GGR data with further good news likely this week on select 3Q16 earnings calls. In particular, we are looking for a positive tone out of Sands China, which we believe is experiencing strong mass market trends following the opening of Parisian,” Union Gaming analyst Grant Govertsen said in a recent note.
Macau’s GGR growth is expected to continue in November, with analysts forecasting an 11 percent growth to reach MOP18.2 billion.
“With the most recently opened new supply entering into their third and second full months of operations, we expect the GGR story to largely mimic what was seen in mid/late September,” Govertsen said.
The Macau government has also downplayed China’s recent crackdown on foreign casinos, which resulted in the arrest of 18 employees of Australia’s Crown Resorts. Paulo Martins Chan, director of the Gaming Inspection and Coordination Bureau (DICJ), recently met with the city state’s six casino operators after the incident to remind them of local laws.
“The gaming companies here reported to us that they had always been abiding by the laws in mainland China,” Chan said, according to a GGRAsia report.