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Monday, September 3, 2018

Union Gaming raises Macau’s GGR forecast on better results

Casino – CalvinAyre.com
Union Gaming raises Macau’s GGR forecast on better results

Gross gaming revenue (GGR) in Macau has risen 17.5% and is now at $3.3 billion according to the city’s gaming regulator, DICJ (for its Portuguese initials). This has been helped by better weather this over last, which saw Typhoon Hato decimate various parts of Asia, as well as an additional day in the year. The improved performance has led to Union Gaming revising its third-quarter forecast and expects things to get even better going forward.

Union Gaming raises Macau's GGR forecast on better resultsGrant Govertsen, an analyst with Union Gaming, indicates that gaming volumes in Macau have remained positive for the six weeks following the FIFA World Cup competition. He adds that mass market gaming is still on track to increase by more than 20% and VIP gaming increases will probably remain the same as they have been, around the 15% mark.

Govertsen asserts that there is “cause for optimism” based on the strong performance seen last month. Additionally, he states, “While last year’s weather, which included two big typhoons within one week of each other, made for a very favorable calendar this August and hence nice [year-on-year growth], the reality is that the absolute level of GGR this August was the highest of the entire year, and only second to February (benefiting from Chinese New Year) on a GGR/day basis. This is cause for optimism as trends have accelerated into the end of summer.”

The analyst continues, “Based on recent conversations we’ve had with VIP junkets, we get the sense that business remains good and is maintaining a mid-teens trajectory despite fears to the contrary. To date, there has been no negative reaction (or even precautions) taken by VIP customers as it relates to trade wars and the potential impacts thereof. By and large, VIP and other premium customers have not changed trip frequency or their wallet size.”

Due to the performance, Union Gaming has adjusted its third-quarter GGR forecast up to more than 14% from the previous 13%, while the forecast for September remains the same at over 15%. For the entire year, the overall forecast will also remain as it has previously been stated at above 16%. This also covers anticipated growth of 12% in the last quarter of the year. Govertsen points out that Union Gaming expects the September GGR to be approximately $3.03 billion, which is a decline of 7.8% over August and consistent with an average decline seen since 2004 in Macau’s long-term debt.

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