hen asked for a comment on the yearly fall of 3.7 percent in June gaming revenues, Secretary for Economy and Finance Francis Tam Pak Yuen said he reckoned that the drop was influenced by the World Cup. The results, as analysts had predicted, have been influenced by the World Cup now taking place in Brazil since June 12. Instead of heading to the 35 casinos’ tables, bettors have preferred to watch the World Cup matches in bars and bet on tournament matches.
Mr. Tam said he is still bullish on the outlook of Macau’s economy following the closer economic partnership with its neighbouring districts, when the city will have a more mature external transport network by the time the Hong Kong-Macau-Zhuhai bridge is completed in 2016.
SJM back on top
As for casino market share, Sociedade de Jogos de Macau (SJM) is back on top, having been briefly overtaken by Sands China in May. The company, owned by Stanley Ho, gained a market share of 25 percent, while in the previous month it held a 23 percent share. Sheldon Adelson’s company dropped from 23 percent to 22 percent, while Galaxy Entertainment occupies third position with 21 percent.
Melco Crown is in fourth with a 12 percent stake, ahead of MGM China with a 10 percent share. The last place, in terms of market share, is occupied by Wynn Macau with 10 percent share.
Despite being the first drop in five years in Macau’s gaming sector, the gross revenue decrease in June was less than originally expected by market analysts in the last two weeks. Analysts’ consensus pointed to a fall of 5 percent arising from the World Cup effect.
‘World Cup headwinds should continue until the conclusion of the competition on July 13, in our view. This once-in-every-four-years disruption of gross gaming revenue does not change our positive long-term secular outlook for Macau names,’ said Sterne Agee, in its most recent note to clients. “Given weaker June growth, we expect mid-single digit downward revisions in the second quarter,’ added Wells Fargo.
The US bank also underlines that the World Cup effect will continue to slow down revenues in July, namely in the VIP segment, an opinion shared by Stern Agee who says the tournament continues to be a drag on Macau revenues, which were down 1 percent week-on-week.
For the whole year, Sterne Agee maintained its estimation with a jump in revenues of 11 percent compared to 2013, with Well Fargo saying that 2014 will be choppy due to a slowdown in the VIP segment driven by decelerating credit growth and a softer macro environment.
