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Macau gaming revenue soars 18% in March as the region continues hot streak

Marc

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h saw Macau’s casinos generate $2.6bn in gross gaming revenue, reflecting an 18.1% increase from the same month a year prior.

Analysts predicted a 12-16% increase in March, however, due to new resorts attracting high rollers as well as leisure gamblers, Macau’s gambling revenues have been rising since second-half 2016.

Figures by the Gaming Inspection and Coordination Bureau show the increase in revenue was the highest year-on-year rise since February 2014, where gross gaming revenue at the special administrative region’s casinos grew 40.3%.

March was the eight consecutive month where the nation saw a revenue increase. Furthermore, this successful month comes after a uninspiring January, where the market grew by a only 3%.

The record increase follows a 17.8% jump in February and beats the average expectation of 15% in a Bloomberg survey of eight analysts.

In 2016, gaming revenues from Macau’s casinos reached MOP224bn ($28bn), or a contraction of 3.3% over the amount recorded in 2015, of MOP231bn.

Japanese brokerage Nomura raised its year-on-year growth estimates for Macau’s gross gaming revenue to 12% in 2017 from 8% previously, mainly due to the strong VIP performance.

Although concerns still linger about this market, results show it lifted the 2017 full-year VIP growth to 14% from 2%. The firm comments: “Macro improvements and subsided impact of the anti-graft campaign in mainland Chine continue to lift VIP demand.”

As evidence of Macau’s growing success, Melco International Development reported a net profit of HK10.37bn ($1.3bn) for full-year 2016, up from HKD100.9m in the prior-year. The company said the promising results are due to Macau’s recovery in the gaming market sector.

“After a long period of struggling through different challenges affecting the gaming industry in Macau, we have finally begun to see positive signs of recovery in gaming revenue during the third quarter of 2016”, said Lawrence Ho, Group Chairman and Chief Executive of Melco International. He adds the company has been “actively exploring opportunities in new markets, such as South Korea, Cyprus and Japan.”

The numbers may signal it’s time to reconsider whether Macau’s recover is the product of its government backed pivot toward tourist and leisure visitors, part of the drive to diversify Macau’s economy beyond hardcore gambling billionaires.

Over the next two years there are plans to open three new tourist resorts with casinos which are expected to add to Macau’s growing success.

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