Macau’s gaming revenue in August surpassed all estimates, recording the second-highest monthly total this year, leading one analyst to cast the Chinese gaming market in a confident light.
The special administrative region’s Gaming Inspection and Coordination Bureau said Saturday gaming revenue in the market increased 17 percent to $3.3 billion in August, compared to the same month a year ago. Gaming revenue in Macau has increased for 25 straight months.
For the first eight months of 2018, the world’s largest gaming market is up 17.5 percent over 2017’s totals.
A year ago, the Macau casino industry faced two large typhoons within one week of each other, giving August 2018 a favorable calendar comparison.
“The reality is that the absolute level of gross gaming revenue this August was the highest of the entire year, and only second to February (which included Chinese New Year),” Union Gaming Group analyst Grant Govertsen told investors Saturday.
Govertsen, who is based in Macau, said, “This is cause for optimism as trends have accelerated into the end of summer. Even more importantly, we continue to believe that mass market remains the strongest segment.”
Las Vegas Sands Corp., Wynn Resorts Ltd., and MGM Resorts International operate large casino holdings in Macau.
The August numbers help deflect from concerns raised in recent months over China’s economic slowdown and a deepening trade war. Wynn Resorts Ltd. in early August reported steep declines in second-quarter results for its first casino in Macau, driven by a decline in betting by high-rollers.
Govertsen told investors he gets 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.”
The Bloomberg Intelligence index of Macau casino stocks tumbled as much as 31 percent from a four-year high in May, with MGM China Holdings Ltd. and Wynn Macau Ltd. leading declines, shares have been rebounding in recent weeks on speculation that the selloff was overdone.
Gross gaming revenue in Macau should grow by about 13 percent in the third quarter, according to Bloomberg Intelligence analysts Margaret Huang and Caitlin Noselli.
(Bloomberg News contributed)
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter
