MGM China and Melco Resorts setto post record-high GGRGrowth boosted by specificinvestmentGGR for Macau in July fallsyear-over-year
Macau-based MGMChina and Melco Resorts are expected to report record-high GGR forthe second quarter of the year.
MGM China and Melco Resorts Expected to Post BigResults
Ahead of posting their Q2 results, MGM China and Melco Resorts are both poised to report the highest Gross Gaming Revenue (GGR) growth year-over-year for the quarter ending on June 30, 2019. The companies have been reporting strong spike in their activities occasioned by MGM Cotai and Morpheus Tower.
Both MGM and Melco will be publishingtheir results by the end of the week with analysts Sanford CBernestein releasing a memo confirming speculations that thecompanies’ GGR is expected to hit record-highs.
Based on the analyses of Bernstein experts, MGM China will mark the highest growth in GGR YOY thanks to Cotai, although results wouldn’t be as big as initially expected. As to Melco, the addition of the Morpheus Tower spells an optimistic future for the company and an opportunity to drive bigger profits from the VIP segment.
With these testimonies from Bernsteinassuring growing opportunities for certain brands and operators,
Outlook on the Macau’s Industry
Macau’s industry has been largely unaffected by the mounting tension between China and the United States, although the enclave has posted lower results for July. According to the available data, GGR fell by 5.9% year-over-year, although Bernstein expects an overall growth for the industry between 0% and 2%, which is not ideal.
Here is what Bernstein had to sayregarding the possible future results generated by the gamblingsector in Macau.
“VIP volume is estimated to be down mid-single digits month-on-month with hold rate towards the lower end of the normalised range. Mass GGR is estimated to be up mid-single digits of percentage point month-on-month.”
Still, other analysts expect M 7BALL CX acau to fare well overall in 2019, with growth returning between September and November based on brokerage Nomura’s analyses. With all of this afoot, Nomura didn’t miss out to comment on the ongoing crackdown on junket operators.
One particular caseis Suncity Group which has been accused of syphoning off VIPcustomers to offshore gambling venues so as to avoid paying gamblingrevenue in Macau. The accusations have been firmlydenied by the company.
Despite the lack ofproven culpability, Suncity Group has triggered a withdrawal frominvestments in the junket market, as China and Macau are nowscrutinizing the market in great detail to establish whethercustomers have been intentionally diverted to other venues.
Recent developmentsdo presuppose testier times ahead, but Macau managed to turn a goodGGR in June, 2019, which marked the third time of steady growthyear-over-year. Despite the temporary tumble in July, things arelooking up, particularly for MGM and Melco.
