30-second summary
- VIP Baccarat is the most profitable industry in Macau right now
- It jumped 3.4% in the final quarter and gained 10.2% overall
- Slot machines are also doing well with a 14.3% increase compared to last year
- However, analysts predict that operators will focus on renewals this year
Profitable growth in Macau soars
There is good news for Macau: Its gambling revenue grew by 21.5%, or MOP102.40bn ($12.69bn; £9.82bn), for 2018.
New data released by the Special Administrative Region’s Gaming Inspection and Coordination Bureau (DICJ) show that VIP baccarat revenue increased the most, gaining 10.2% over 2017. The revenue reached MOP166.10 billion ($20.58bn; £15.94bn), considerably more than MOP150.67 billion ($18.67bn; £14.46bn) in 2017.
Baccarat continues to shine
And it wasn’t just VIP baccarat that boosted revenue: In the fourth quarter, mass-market baccarat brought in MOP27.90bn ($3.46bn; £2.68bn), 19.0% higher than MOP23.45bn ($2.91bn; £2.25bn) for the same period in 2017.
VIP baccarat also jumped by 3.4% in the final quarter compared to the previous year.
Slot machines record growth
2018 was another great year for slot machine revenue in Macau. The total figure was MOP15.05bn ($1.86bn; £1.44bn), a 14.3% increase from last year’s revenue of MOP13.16bn ($1.63bn; £1.26bn).
The fourth quarter showed a 7.9% increase over the previous year, with revenue of MOP3.91bn ($484.63m; £375.14m).
Can growth continue at that rate?
While 2018 was definitely a great year for growth in Macau, despite facing some hurdles, experts have their doubts about whether the level of growth will continue in 2019.
The total GGR increase for 2018 was 14%, to MOP302.85bn ($37.57bn; £29.06bn), but Union Gaming’s Grant Govertsen predicts a 4% year-on-year growth for the first quarter, and growth in the “mid-single digits” for the whole of 2019.
Challenges from other companies also predict lower reaching growth targets.
- Nomura division Instinet predicts 5% year-on-year GGR growth for this month.
- JP Morgan sees January growth staying in the range of 4%-6% over last year. They estimate that months throughout the year will also remain in the single digits.
- The Telsey Advisory Group projects less 10% GGR growth for the year.
With casino licenses due to expire in 2020 and 2022, forecasters predict that firms will be putting their energies into renewals, not delivering growth as previously expected.
Figures from the first quarter should give a better idea of how the year will go.
