Macau mass gaming outpaces VIP for second straight quarter


macau-casino-mass-market-gaming-outpaces-vipMacau’s casino sector saw the mass market gaming surpass the VIP segment for the second quarter running as Chinese tycoons struggle under an ongoing trade war.

Figures released Tuesday by Macau’s Gaming Inspection and Coordination Bureau (DICJ) show market-wide gaming revenue hit MOP73.5b (US$9.13b) in the three months ending June 30, around 0.5% below the same period last year. The sum for the first half of 2018 is MOP149.9b, also down less than 1% year-on-year.

While the overall numbers may be static, the big story is the continued decline of the VIP gaming segment. VIP baccarat brought in MOP34.6b in Q2, down 15.8% year-on-year and down nearly 7% from Q1 2019. VIP’s share of Q2’s overall pie was 47.2%, down 1.7 points from the previous quarter, which was the first in which the lowly mass market eclipsed its flashier VIP cousin.

By comparison, mass market baccarat surged 22.8% year-on-year to MOP29.6b, good for a 40.4% share of Q2’s overall revenue. Combined with other forms of mass market gaming, including slot machines, total mass market share grew to 51.9%, up from 51.1% in Q1 2019.

For the first half of 2018, the VIP sector is down 13.5% to MOP71.8b. Various theories have been floated as to the VIP downturn, including mainland manufacturing executives taking a hit to their pocketbooks due to the ongoing trade war between the U.S. and China.

China’s economy grew at a rate of 6.2% in Q2, 6.4 points below Q1’s figure and the slowest rate of growth that China has experienced since 1992. Given U.S. President Donald Trump’s eagerness to play the trade tough guy, forecasts are for this slowdown to continue through the second half of 2019, so Macau casino operators might want to periodically check their VIP tables for cobwebs.

Also falling fast are the number of suspicious transaction reports (STR) filed by Macau casinos. Figures released this week by Macau’s Financial Intelligence Office showed local casinos filed 966 STRs in the first half of 2019, down from 1,128 in H1 2018. However, the decline in casino STRs was slower than the 37.1% fall in all STRs filed in Macau in H1. That discrepancy pushed the casinos’ share of overall STRs up to 70.2%.