Macau casino revenues up 10.6 per cent year on year in April, to 31.3 billion patacas
Casinos take in 31.3 billion patacas in April, extending streak of monthly revenue growth as the masses continue to flock to city's tables
Macau casinos took in 31.3 billion patacas last month, up 10.6 per cent per cent from a year earlier, beating analysts' estimates thanks to continued growth in revenue from mass market gaming.
Macau has now reported higher gaming revenue for the first four months of the year, despite intense market concerns the anti-corruption campaign on the mainland would hurt business in the world's largest gambling destination. Gross gaming revenue from January to April rose 17.5 per cent from a year earlier to 133.5 billion patacas, according to official data.
Casino operator Wynn Macau reported its first-quarter adjusted earnings before interest, taxes, depreciation and amortisation, or ebitda, rose 16 per cent from a year earlier to US$384.3 million, surpassing market expectations. Net revenue climbed 14 per cent to US$1.13 billion.
Sands China, the Hong Kong-listed unit of Las Vegas Sands, earlier reported a better-than-expected ebitda of US$938.1 million, a whopping 49.8 per cent increase over the same period a year ago.
Analysts say the surprisingly good performance was helped by strong growth and they do not see this letting up.
"The VIP segment appears to remain healthy while the mass market remains exceptionally strong," a research report by Macau-based Union Gaming Research said.
Though Beijing has ordered officials not to gamble, the gaming industry simply marches on. A person close to the industry said casinos would "stay in good shape" because the growth in the mass market was robust and this market segment was four times as profitable as the VIP segment.
For every dollar in revenue, profit in the VIP market is 10 per cent. But the corresponding figure for mass market gaming was 40 per cent, the person said.
"The anti-graft campaign has been going on for quite a while. The [junket operators] are smart and savvy. They are all aware of that," the person said. "For their own best interest they would prefer to play safe. Why should they generate 30 per cent growth, when 10 per cent is already high?"
VIP gamblers typically wager more than US$1 million on baccarat on each visit to Macau and bet using credit lines arranged by junket operators.
Official data show the number of package tour visitors to Macau rose to 895,000 in March, 21 per cent more than a year earlier. The number of mainland tourists rose 30 per cent to 698,000.
"We currently expect 20 per cent year-on-year growth for May and maintain our 16 per cent gross revenue growth forecast for the year," a Barclays research report said. Casino shares rallied yesterday in Hong Kong, with Wynn Macau up 4.1 per cent to close at HK$31.80, compared with a gain of 0.57 per cent in the benchmark Hang Seng Index.