Macau GGR gains 14 percent in 2018, Dec. beats forecasts

Gross gambling revenue in Macau rose 14 percent in 2018, with December topping consensus forecasts with a gain of 16.6 percent.

According to figures from the Gambling Inspection and Coordination Bureau, GGR for December came in at MOP26.5 billion ($3.3 billion), with revenue for the full year topping out at MOP302.85 billion ($37.57 billion), compared to MOP265.74 billion in the previous year.

Bernstein Research said both VIP and mass had benefited from events held during what has been a weaker month for the past two years,  including several days of Jay Chou’s The Invincible Concert Tour held at The Venetian.

However, the analysts cautioned that the slowdown in China’s economy signalled headwinds for Macau going into 2019. It expects January GGR to be in a range of minus two to plus two percent.

Union Gaming analyst Grant Govertsen said the year had ended broadly in line with his expectations, though with a better mix of mass versus VIP.

“As we look into 1Q19, and contemplate the timing of Chinese New Year, we would not be surprised if January was flattish and February was up in the mid/high single digits. For the whole of 1Q19 we are forecasting GGR +4 percent, followed by mid-single digits for the balance of the year.”

“While the macro remains uncertain, Macau has remained resilient, particularly with respect to the mass market segment. It is for that reason that we view Sands China and Galaxy as the best ways to play Macau for the foreseeable future.”

Govertsen also noted that the surging visitor numbers to Macau as a result of the opening of the Hong Kong-Macau-Zhuhai bridge were not translating into increased foot traffic to the casinos as yet. Instead, the bridge is largely being used as a way to shuttle people between Hong Kong and Zhuhai via Macau. He adds that dynamic is likely to continue for the foreseeable future.