Macau is on its first winning streak since 2014.
The latest data from the Macao Gaming and Coordination Bureau reveals that Macau brought in 21.8 billion patacas in October, up 8.8 percent year-over-year. Prior to August’s 1.1 percent gain, Macau had registered 26 consecutive year-over-year monthly revenue declines. Only three months later, the industry logged its highest monthly revenue total since January 2015 and is on a three-month winning streak.
The strong revenue number once again beat consensus analyst expectations of 5.5 percent growth in October.
Shares of resort operators Melco Crown Entertainment Ltd (ADR) MPEL 1.27%, Las Vegas Sands Corp. LVS 1%, MGM Resorts International MGM 3.02% and Wynn Resorts, Limited WYNN 1.35% opened Tuesday’s session up more than 2 percent.
The Bottom May Be In
October’s big beat is further evidence that the multi-year decline in Macau is finally over. Prior to August’s gain, Macau registered four consecutive single-digit declines. Growth numbers throughout the summer months were helped by extremely weak 2015 comps. Those easy comps should continue in coming months.
February 2015 marked the “high point” for gaming revenue declines at -48.6 percent. June’s GGR of only 15.8 billion patacas represented the monthly low for revenue during the current downturn and was the lowest monthly total Macau had recorded since September 2010. Only four months later, the industry seems to be accelerating once again.
Is The Bad News Barrage Finally Over?
Macau has seen a seemingly constant stream of bad news over the past two years:
- In 2014, the Chinese government announced a crackdown on corruption in Macau.
- Increased government scrutiny coupled with a weakening Chinese economy led to a major falloff in VIP gamblers.
- In September 2015, headlines of potential junket embezzlement of up to $258 million dollars had investors worried about even more government regulation down the road.
- Macau’s new ban on phone betting began May 9.
- Casino operators have been disappointed by the government’s table allocations for newly-opened resorts.
In addition, fears surrounding the impact of a potential VIP room smoking ban in Macau casinos have also weighed on share prices.
October Boost
The Chinese Golden Week holiday likely gave…
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