Macau extends casino GGR winning streak in January 2018

Macau extends casino GGR winning streak in January 2018

Macau casinos are off to a good start this year as gross gaming revenue (GGR) climbed 36.4 percent in January, with both the VIP and the mass market remaining vibrant.

Macau extends casino GGR winning streak in January 2018Figures provided by Macau’s Gaming Inspection and Coordination Bureau (DICJ) showed that Macau’s casino GGR climbed to MOP26.26 billion (US$3.26 billion) in January compared with the MOP19.3 billion ($2.4 billion) it posted in the same month last year.

The year-on-year growth was well above financial analysts’ expectation of between 25 and 30 percent.

“We estimate VIP GGR was up 50 percent year-on-year (versus 22 percent year-on-year in fourth quarter) and mass GGR was +22 percent to 24 percent year-on-year (versus +17 percent year-on-year in fourth quarter), both of which showed big accelerations from recent trends and beat recent expectations, partly helped by easy comps (given Chinese New Year calendar shift) and VIP luck,” international brokerage JP Morgan Securities said in a Thursday note.

Japanese brokerage Nomura pointed out that the lower than expected GGR in January 2017 was affected by the placement of the Chinese New Year, which straddled both January and February last year.

Despite the better-than-expected January 2018 GGR, international credit debt watcher Fitch Ratings isn’t feeling as confident about the Macau casino market as it did last year.

Fitch Ratings Director Colin Mansfield told Macau-based reporters that the former Portuguese enclave’s GGR will decelerate to 11 percent this year as volatility remains in the VIP segment. Mansfield pointed out that the possible credit tightening in mainland China due to the cooling of housing market will contribute to VIP volatility. He expects the mass and VIP segments to grow by 14 percent and 9 percent this year.

“Fitch’s cautious position on VIP reflects inherent volatility and the potential for an economic slowdown on mainland China. The housing market [in mainland China] continues to show signs of deceleration, with housing sales turning negative year-on-year for three consecutive months in fourth quarter 2017. In addition, credit conditions are tightening,” Mansfield said, according to GGRAsia.