May 04, 2015 Newsdesk Latest News, Macau, Top of the deck  
Demand for gaming services in Macau seems to be stabilising when the percentage year-on-year decline in April gross gaming revenue (GGR) is judged against that of March. But in actual money terms, the amount wagered on a daily basis in April was nearly nine percent lower than in March, stated a note on Monday from Deutsche Bank AG in Hong Kong.
GGR in Macau fell 38.8 percent year-on-year in April to approximately MOP19.17 billion (US$2.40 billion), show official data. It extended to 11 months the year-on-year decline in the city’s monthly casino revenue tally.
April demand was stable sequentially judged against March’s 39 percent year-on-year decline, “but on a per-day basis, GGR still slipped from MOP700 million/day in March to MOP640 million/day in April,” said Deutsche Bank’s Karen Tang.
April also represented the third consecutive month of roughly similar aggregate GGR, in the MOP19 billion to MOP21 billion range.
“While this doesn’t automatically spell the worst being behind us, we believe this could represent the bottom although we acknowledge that trends could rumble along (yet still be choppy) for some number of months to come before we see any breakout to the upside,” said Union Gaming Research Macau Ltd analysts Grant Govertsen and Felicity Chiang.
Union Gaming believes the “geographic expansion” of the anti-corruption drive in mainland China “has resulted in an incremental number of customers temporarily avoiding Macau”.
Visitor arrivals to Macau numbered 2.27 million in March, down by 13.5 percent year-on-year, according to official data. The number of tourists from mainland China declined by 17.6 percent year-on-year to 1.46 million in March.
“Given the deteriorating visitor mix, we feel consensus forecasts are still 25 percent to 30 percent too high,” Ms Tang said in her note on Monday. “Many mass players now prefer to spend their holidays in Japan, [South] Korea, Europe given weak currencies [in those markets].”
“We see Macau as facing a demand problem rather than a supply constraint,” said Ms Tang, adding that any rally into Galaxy Macau Phase 2 opening – scheduled for May 27 – “is likely to be short-lived”.
April market share
SJM Holdings Ltd, the casino operator founded by Stanley Ho Hung Sun, lost the market lead in terms of share of GGR in April. The company had a market share of 21.6 percent last month, down from 23.2 in March, according to industry figures compiled by GGRAsia.
Sands China Ltd gained the most in April “as it benefitted from holiday travellers during Easter holidays,” said the note from Ms Tang. The operator of the Venetian Macao had a market share of 24.2 percent in April, up from 21.4 in the preceding month, show the data collected by GGRAsia.
Galaxy Entertainment Group Ltd, founded by Hong Kong billionaire Lui Che Woo, stayed in third position with 20.1 percent of the market.
Melco Crown Entertainment Ltd was fourth in the list, with 12.8 percent of the market share, compared to 11.8 percent of Wynn Macau Ltd. MGM China Holdings Ltd had 9.5 percent of the market in April.
Gaming volumes seemed to have “picked up” during the Labour Day holiday period surrounding May 1, said Union Gaming’s note on Monday.
“However, the foot traffic story around town certainly was not indicative of it being a major holiday…” said Mr Govertsen and Ms Chiang.
Data from the Macau’s police show that visitor arrivals to the city numbered 505,255 in the first three days of May, up by 16.3 percent from the prior-year period.
“While we might see slightly higher GGR to start the month of May, we do not expect the balance of the month to be materially different than what we’ve seen over the past few months,” added the Union Gaming analysts.
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