The MSAR gaming average daily rate between July 1 and July 23 reached MOP750 million (US$93.2 million), a 34 per cent increase from the same period in July last year, a gaming report by brokerage Sanford C. Bernstein Co. stated.
According to the firm, the week between July 17 and July 23 saw an average daily rate of around MOP807 million, driven by a ‘combination of higher VIP hold and volume’ together with strong visitation numbers in the city due to the summer holidays.
The firm estimates that if the average daily rate remains between MO670 million and MOP710 million until the end of the month, gross gaming revenues for July could reach as much as MOP22.9 billion, a possible 29 per cent year-on-year increase.
‘The month of July is coming in stronger than we, and the market, had been expecting,’ the report states.
The dangling sword
Despite expected continued growth in the next few months, the VIP gaming market in the MSAR will continue to face challenges due to the possibility of tighter regulations by the local government and increased control on capital outflows by the Chinese central government, the report indicates.
‘We continue to view the industry as a secular growth story driven by the paradigm shift from VIP to Mass (…) Due to improvements in transportation infrastructure and the continued opening and ramping up of new integrated casino resorts in Macau, the mass market will be the key driver of sustainable growth in 2017 and through the rest of the decade,’ the report reiterated.
Gaming operator expectations
In terms of future performances by gaming operators, the report states that Wynn Macau has continued to ‘gain traction’ due to its new Wynn Palace property inaugurated last year, with the gaming operator considered to be ‘strongly positioned’ in the gaming mass market ‘over the longer run’.
In regards to Melco Resorts & Entertainment, the sale of Australian group Crown Resorts’ stake in the company removed a ‘major overhang’ with Melco’s performance, with predictions it will be able to improve in the ‘medium term’ with the expected opening of its Morpheus property in 2018, ‘continued organic growth in the Philippines’ and providing the group improves the performance of its Studio City property.
However the ‘complexity of its corporate structure’ was considered as a possible setback.
