Macau’s Gaming Inspection and Coordination Bureau (DICJ) reported January gross gaming revenue (GGR) of MOP24.94 billion ($3.08 billion), 5% lower than the same period last year.
This was the first year-on-year decline of monthly GGR in the Special Administrative Region (SAR) since July of 2016, and points to reduced growth for the year, as earlier projected by analysts.
In just the previous month of December, GGR had risen 16.6%. Total GGR for 2018 was $37.57 billion, 14% higher than in 2017.
At the start of the year, Union Gaming’s Grant Govertsen had said he was expecting a “flattish” January, with single-digit growth in February partly driven by Chinese New Year, taking place on February 5.
A week into the year, Sanford C. Bernstein had said that a weaker Chinese economy would mean less revenues for Macau casinos. The brokerage firm has seen several factors contributing to lower GGR, including the implementation of a smoking ban, after the Macau government gave casinos a year to prepare and apply for special smoking booths.
Nomura, through its stockbroking division Instinet, had seen GGR in January benefiting from a larger GGR-per-day in weekends compared to weekdays, and said that casinos are to perform better in February.
The Nomura analysts have also said that while revenues are to fall in the first half of 2019 on account of “VIP compression,” things will turn around, with single-digit GGR growth to be achieved in the second half.
Also noted was the fact that gaming revenue for the VIP segment has actually been flat or lower year on year during the second half of last year. In addition, demand for junkets has gone down, and online competition from abroad has weakened sales in the SAR.
Another factor pointed out by the analysts is Wynn Resorts, which operates the Wynn Palace and Wynn Macau. Just this week, Wynn released its financial results for the fourth quarter of 2018, showing 3.1% lower profits compared to the same period in the previous year.
Net income for the operator was $814.8 million, 8.4% lower year on year. Of this, $584.2 million was attributable to the operator, 21.8% lower year on year.
Wynn was cited by Nomura as saying that it saw the premium segment falling 10%-15% in 2019.
