Inside Asian Gaming

inside asian gaming November 2016 26 Feature In Focus As gaming revenue growth returns, questions remain on whether Macau has created the foundations for a sustainable recovery. By Muhammad Cohen October visitor arrivals rose 8%. Galaxy Entertainment reported third quarter EBITDA rose 28% year-on-year owing in part to double digit growth in mass and non-gaming revenue. Following the Cotai resort openings, Morgan Stanley Asia upgraded Wynn Macau and Union Gaming upgraded Las Vegas Sands on the strength of its Macau business. But even if Macau has turned the corner, questions remain about whether it’s on the road to sustainable long term growth. Gaming revenue began its turnaround with growth of 1.1% in August then 7.4% in September. JP Morgan Securities Analysts DS Kim and Daisy Lu note that September’s average daily revenue (ADR) of MOP$613 million (US$76.6 million) beat ADR during this year’s Golden Week holiday month of May. Openings of Wynn Palace on 22 August and Sands China’s Parisian Macao on 13 September clearly contributed to the rise, but perhaps not as anticipated. The VIP market – wizened from MOP$239 billion and 66% of GGR in 2013 to a projected MOP$111 billion and 46% of GGR this year – led Macau’s growth in August and September, industry observers indicate. There were reports of above average VIP hold in September along with signs of the relentless consolidation of the sector in both months as Wynn Palace and Parisian each provided VIP rooms for top three junkets Suncity, Neptune/Guangdong and Tak Chun only. Union Gaming says the top three have grown VIP market share from about 50% in 2014 to as much as 80% now, in part because they’ve been wooing other promoters’ agents with higher commissions. Exclusive deals with attractive new casinos help drive Back to the future S igns of Macau’s rebound abound. October saw a third consecutive month of rising year-on-year gross gaming revenue after 26 straight months of decline. More than US$10 billion in new properties have filled out Cotai, adding 8,269 guestrooms and a host of new reasons to visit. In September, overnight visitor numbers increased 12%, continuing a year-long trend, and for Golden Week at the start of