Macau revenue continues to grow

May marked the tenth month in a row that gaming revenues for Macau had risen and GGR is far outstripping expectations in terms of growth.

This is great news for the groups who have invested heavily in the sector. MGM Resorts, Wynn Resorts and Las Vegas Sands have all reported share growth at an average 3% rate. Casino analyst David Katz of the Telsey Advisory Group states that new properties in

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Macau are growing the market, rather than cannibalizing the existing properties.

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Experts predict that June’s figures will continue the growth trend, both for the casinos themselves and for Macau as a whole.

VIP sector contributes heavily to profits

Much of this growth in gambling revenues can be attributed to Macau’s blossoming VIP casino market, which is currently outperforming the mass market fourfold in terms of GGR. VIP revenues grew by 16.8% during the first quarter, showing a 34.8% increase on the same period last year.

Calvin Ayre reported that the high roller market is now worth 57% of the total gaming market within Macau – a 5.5% increase on the same period last year.

VIP smoking ban might harm profits

Things look good for Macau’s VIP players right now, but experts are predicting a decline in fortunes next year when the law changes to address smoking at the tables. VIPs are currently allowed to smoke at the tables while they play, while the average customer is consigned to the dedicated smoking lounges. With reforms made to the Tobacco Prevention and Control Law, now all casinos must provide lounges for their VIP patrons too.

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No casino games are allowed in the smoking lounges – which is sure to reduce table spend by VIPs.

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Brokerage firm Nomura also suggests that GGR figures might have been boosted by the reclassification of certain high-limit tables as ‘VIP’ areas, so that they can skirt this ban on smoking and keep mass market players at the tables. It warns that the current level of growth is likely to be unsustainable, but concedes that figures are unlikely to enter a period of decline for several years, and instead will see growth slow down.