YIBADA

Macau Is Moving In The Right Direction

| Mar 14, 2018 01:44 PM EDT

Macau Is Moving In The Right Direction

Macau is a Special Administrative Region of the People's Republic of China that is located close to Hong Kong, and was once an overseas territory of Portugal. As well as being one of the most densely populated places on the planet, it also brings in more revenue from gambling than any other place on the planet, and that includes the Las Vegas Strip. It may be argued that Vegas does edge their Asian competitor in terms of grandiose themes and shows, however, Macau is definitely focused on the gaming side. Players will not only be able to visit some of the most amazing gambling resorts in the world and famous landmarks but also enjoy quality games like roulette, baccarat, blackjack and poker; with the added thrill of private rooms, tournaments and high roller stakes.

Things haven't been going too well of late though for Macau in terms of the region's revenue from gaming. The money made from the sector plummeted to an all-time low four years ago back in 2014, and since then you could say they have been flailing around trying to regain a foothold; as well as the composure to right themselves and move forward. With the revenue from this area being so crucial, there is always pressure on Macau to improve and never give up on the belief that they are the best in providing the ultimate casino experience.

While the future has looked extremely bleak for some time, their perseverance paid off; and 2017 saw a dramatic change in the fortunes of Macau and their gaming revenue figures. The Macau Gaming Inspection Coordination Bureau has recently posted results showing gaming revenues rose by 19% over the course of the last 12 months, climbing to $33.1bn. This represents a huge step in the right direction for Macau who has posted negative results since 2014.

Key players on the Cotai strip which include the likes of Sands China Ltd, Wynn Macau Ltd, Galaxy Entertainment Group Ltd and Melco Resorts & Entertainment Ltd have all reported higher winnings over the last 12 months. These operators will certainly be pleased with the upturn in fortunes of the area as it should see them becoming profitable once again going forward.

You could look at December's figures in two different ways. On one hand, gaming receipts rose by around 15% to $3.7bn. This is a superb result and shows that things are moving in the right direction. However, on the other hand, many expected the December performance to be a lot better than what it was. While a 15% jump is great it was forecasted to be a lot bigger than it was but it's something to build on regardless.

Deutsche Bank Securities Inc. firmly believe that Macau's gross gaming revenue, or GGR as it's commonly referred to as, should follow up 2017 with more growth recorded. They feel the GGR will grow by 11.3% year-on-year over the course of the next 12 months with an EBITDA growth of around 15% also being predicted. Macau certainly needs to use 2017's positive steps to drive them forward in 2018, but it's well known that the market in the region is extremely volatile and hard to predict.

A spokesperson from Union Gaming was especially positive about the recent upturn in fortunes recorded in the gaming sector of Macau. They said: "We believe that volumes across virtually all segments were strong for most of December. Even the low end of the market is seeing a resurgence with notable increases in tour group volumes based on our on-the-ground observations."

Most Popular

EDITOR'S PICK