Inside Asian Gaming

INSIDE ASIAN GAMING | July 2013 16 FEATURES T he growth of Macau’s high-margin mass-market gaming revenue continues to comfortably outstrip that of the dominant but much lower-margin VIP sector, and the result is that local casinos— and particularly the more mass market- focused ones—are seeing profitability increase by a greater degree than the headline revenue number. Macau recorded MOP28.3 billion in gross gaming revenue in June, a 21% year on year increase, while profitability, as gauged by the J.P. Morgan Macau Profitability Index, was up 24%. Mass revenue, which accounted for 29% of total revenue in June, was up 31% year on year. The figure does not include slots, which are classified separately and accounted for Smooth Sailing With easier comps ahead and the mass market showing no signs of slowing down, concerns about the sustainability of Macau gaming revenue growth in the second half seem overdone Macau Monthly Gaming Revenue Source: J.P. Morgan estimates, DICJ 35 60% 40% 20% 0% Monthly Gaming Revenue (MOP bn) yoy change (R.H.S) 30 25 20 15 10 5 0 Jan11 Jan12 Jan13 Feb11 Feb12 Feb13 Mar11 Mar12 Mar13 Apr11 Apr12 Apr13 May11 May12 May13 Jun11 Jun12 Jun13 Jul11 Jul12 Aug11 Aug12 Sep11 Sep12 Oct11 Oct12 Nov11 Nov12 Dec11 Dec12 Macau Monthly Junkets’ Rolling Chip Volume Source: J.P. Morgan estimates, DICJ Jan11 Jan12 Jan13 Feb11 Feb12 Feb13 Mar11 Mar12 Mar13 Apr11 Apr12 Apr13 May11 May12 May13 Jun11 Jun12 Jun13 Jul11 Jul12 Aug11 Aug12 Sep11 Sep12 Oct11 Oct12 Nov11 Nov12 Dec11 Dec12 700 600 500 400 300 200 100 0 80% 70% 60% 50% 40% 30% 20% 10% 0% -10% -20% Monthly VIP rolling chips MOP bn yoy change (R.H.S)