Mass market leads Macau’s Q2 growth

The mass market overtook the VIP sector to lead growth in Macau’s gross gambling revenue in Q2 with a gain of 21 percent over the prior year, according to figures from the Gaming Inspection and Coordination Bureau.

VIP gaming rose 14 percent in the same period, the slowest rate in more than 18 months.

“That mass, once again, drove growth in 2Q is great news for operators as it has been the backbone of the recovery and is generally less sensitive to political winds,” Union Gaming wrote in a note. “That mass outpaced VIP is also an upside surprise relative to most expectations and, trade war fears notwithstanding, is reason to remain bullish on the Macau names.”

The firm has adjusted its full year estimates down slightly following the release of the Q2 figures for 16 percent growth in 2018 and 12 percent for 2019. It says July revenue appears to have been robust, despite fears of underperformance because of the FIFA World Cup, while regulatory concerns about more capital controls from China remain unfulfilled.

There have also been some talk that a trade war between the U.S. and China may have negative implications for Macau’s U.S. operators, though Union Gaming says it has heard nothing on the ground to suggest any are potential political targets.

“In sum, while May/June was slower than expected, industry insiders remain generally upbeat about their own business trends,” it said.