Macau’s gaming market dipped for the second time in three months during March, although a less than 1 percent decline was considered a positive sign.
Macau’s Gaming Inspection and Coordination said Monday casinos in the region collected $3.2 billion in gaming, down 0.4 percent from a year ago, but the single-highest revenue month this year. Analysts had expected the market to be down as high as 6 percent in the month.
Many analysts have also worried the China-U.S. trade war has kept high-end customers away from the gaming tables.
“While it is not uncommon for total March gross gaming revenue to be greater than February, this isn’t always the case, and, in our view, considering the macro backdrop a sequential increase should be viewed positively and a sign of resilience in the market,” Union Gaming Group analyst Grant Govertsen told investors in a research note Monday.
In January, Macau gaming revenue declined for the first time in more than two years, but the market rebounded in February. The Macau market is down less than 1 percent in the year’s first three months.
Macau’s gaming market rebounded over the last two years after an economic nosedive caused casino industry revenues to decline 36 percent.
Las Vegas-based Las Vegas Sands Corp., Wynn Resorts and MGM Resorts International operate multiple resorts in Macau.
Deutsche Bank gaming analyst Carlo Santarelli told investors Macau’s March results were “broadly in line with forecasts, though a positive surprise given lowering expectations as March progressed.”
“Considering the implementation of the smoking restrictions and tougher comparisons, we expect April to be a challenging comparison, before a resumption of year-over-year growth in May,” Santarelli said in a research note.
Govertsen warned the investment community the election of a new chief executive later this year could become an overhang on the market’s performance.
“While we don’t think this will have any bearing on near-term visitation and gross gaming revenue trends, it is a factor that could have an impact later this summer as individuals might defer trips until after the election period is over,” Govertsen said.
The installation of the next chief executive is in conjunction with the 20th anniversary of the handover of Macau to China from Portugal. Govertsen said the ceremony will likely coincide with a visit from China President Xi, “which will almost certainly have a negative impact on gross gaming revenue – as have previous visits.”
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
