August gaming revenue shows lowest increase

The local gaming industry’s revenues dropped by 3.3 percent in the last month, in comparison with July. Data from the Gaming Inspection and Coordination Bureau (DICJ) shows that the casinos pocketed MOP 15.77 billion in August, down from MOP 16.31 billion a month earlier.
In comparison with the same month of last year, the revenues actually grew by 40 percent but this was the lowest monthly increase so far in 2010.
Up to July, the gaming industry was posting a revenue growth of 67.5 percent. However, last month’s slowdown cuts this evolution down to 63.2 percent.
In the first eight months of 2010, revenues reached MOP 117.9 billion. If the growth rate remains unchanged, the sector will need less than one week of September to top the revenues registered in the whole last year, MOP 120.4 billion.
After a slight slump in June, the local gaming industry’s revenues had gone up again in July. In that month the casinos’ income reached MOP 16.31 billion, 19.6 percent more than in June, and the sector’s second best monthly figure ever.
Analysts were expecting market growth “to resume” after the FIFA football World Cup, which finished on July 11. Hopes were even higher for August, “which is traditionally the summer travel season,” said the Deutsche Bank analyst Karen Tang a month ago. In fact, despite the deceleration, in August the industry recorded its third highest monthly revenue.
The Hong Kong based analyst only expected the gaming revenue to slow down in the fourth quarter of 2010, due to the wide-reaching effects of falling Chinese property prices. Nonetheless, Deutsche Bank still upgraded its original annual revenue growth forecast from 35 to 50 percent.
On the contrary, the DICJ director Manuel Joaquim das Neves has so far kept his prediction of 30 percent for the casino revenues growth this year. 2010 started “very well” for the industry, the gaming regulator acknowledged two months ago.
However, the year-on-year growth percentages have been impressive because the first half of 2009 saw a drop in the gaming revenues, the DICJ director recalled. In the first quarter last year the industry’s revenues were MOP 26.3 billion, down 12.7 percent from the same period of 2008.
The casinos recovered in the second half of 2009, Neves said, and they wrapped up the year with a 9.6 percent revenue growth. So, in comparison with a more positive period, the revenue rise in the second half of 2010 “will be smoother,” he added.
The former chief executive of Sands China Steve Jacobs also predicted two months ago that the local gaming revenue growth could be “relatively flat” in the second half of 2010. Furthermore, the BNP Paribas analysts forecast as well that the revenue increase would slowdown to 40.4 percent between July and December. This prediction would mean that this year would wrap up with a 51.9 percent rise in revenue.

V.Q.