Inside Gaming: First Positive Month for Macau in Two-Plus Years; Hot July for Nevada
This week's installment of Inside Gaming shares news of the first positive monthly gaming revenue report from Macau since the summer of 2014, looks as well at a positive report from Nevada for a strong July, and tells about a big recent development in online gaming in India.
First Positive Monthly Gaming Revenue Report in Over Two Years for Macau
We've sounded like a broken record over here at Inside Gaming (for those who remember records, anyway) regarding the monthly gaming revenue reports from Macau over the last two-plus years.
Starting in June 2014, each month's report of "Monthly Gross Revenue from Games of Fortune" from the Gaming Inspection and Coordination Bureau has brought back negative figures for the casinos of the Special Administrative Region of China, with the streak of monthly declines having extended 26 consecutive months.
Well, the streak is finally over, as yesterday's report for August 2016 shows a 1.1 percent increase (year-over-year) in gambling revenue. The casinos' collectively earned 18.836 billion patacas or about $2.36 billion USD. That's up from the 18.623 billion pacatas ($2.33 billion USD) from August 2015, though of course still represents a much lower revenue total than Macau was experiencing during its heyday as a leading gaming hub not just for Asia but the entire world.
Those monthly declines had reached as high as a drop of 48.6 percent (in February 2015), with most months having 30-35 percent declines. However, in 2016 the fall has flattened out somewhat with most months' figures reflecting single-digit declines, percentage-wise.
Last month concluded with the much anticipated opening of the $4.2 billion Wynn Palace Cotai on the Cotai Strip, albeit with fewer gaming tables than first hoped for by Wynn. Meanwhile newest Las Vegas Sands Corp. property The Parisian is set to open on the Cotai Strip as well on September 13, with over 3,000 rooms and suites, 450 gaming tables, 2,500 slot machines, and a half-scale Eiffel Tower.
Even with the positive report, prognosticators aren't predicting an immediate change to Macau's fortunes as far as gaming revenue is concerned. As Reuters notes, "a swift rebound is unlikely, say analysts, who caution the new properties... will be impacted by slow market growth and infrastructure bottle necks."
"We believe it is much more difficult to ramp up a new property in a low growth environment," explained analyst Praveen Choudhary who referenced the openings of both the Studio City property in October 2015 by Melco Crown Entertainment Ltd. and Phase 2 of Galaxy Macau opened by the Galaxy Entertainment Group in May 2015.
While many reasons have been cited for precipitating the gaming revenue decline in Macau, measures introduced by President Xi Jinping after taking office in 2013 to reduce corruption, eliminate certain types of graft and extravagence, cut down on money laundering, and cut down on governmental bureaucracy have impacted many industries, including travel, catering, hotels, high-end retail, and for Macau — the only legal place in China to gamble — gaming revenue.
Recently casinos on Macau have redirected efforts toward attracting different types of clientele than the gamblers and in particular the high rollers who once frequented the peninsula in higher numbers. However efforts along those lines have only brought limited results, with the great majority of Macau's overall revenue still dependent on gaming.
Read more about the positive monthly report and forecast going forward for Macau at Reuters.
A Billion-Dollar July for Nevada
Meanwhile the start of the new month also brings revenue news from Nevada where casinos enjoyed a positive July. The latest revenue report from the Nevada Gaming Control Board shows a statewide increase of nearly 10 percent year-over-year for the month with a total win amount of $1.015 billion — the largest since December 2013.
Casinos on the Las Vegas strip were up a healthy 16.77 percent for the month. Baccarat in particular (up over 40 percent) helped boost the total win for strip casinos, with table games as a whole up more than 29 percent. Reno casinos were likewise up 11.5 percent in July.
"From the state's point of view, that was a pleasant surprise on the baccarat side," said Michael Lawton, senior analyst for the NGCB, as reported by VEGASINC. Lawton noted how July having a fifth weekend helped boost the overall totals as well.
There was $222 million bet on sports in Nevada sportsbooks during the month, the most of any July on record for the state's casinos. Baseball was a popular sport on which to bet, as was the conclusion of Euro 2016. Slots, blackjack, and roulette were all up as well for the month.
India Gaming Leader to Purchase Largest Online Poker Portal
On Wednesday, Delta Corp Ltd., the largest gaming and hospitality company in Goa, India, announced it had begun the process of acquiring the Gauss Network, owners of Adda52.com, the largest online poker site in India.
Delta Corp Ltd. has filed papers with the National Stock Exchange of India Ltd., signaling their intention to pay 155 crore rupees or about $22 million USD to acquire the network. The transaction will be broken up into segments (part cash, part equity) and is subject to regulatory and statutory approval of all involved parties as well as the courts.
Online gaming is in its relative infancy in India, with the Gauss Network's Adda52.com (first launched in 2012) already the market leader for online poker. The site has gotten involved in live tournaments as well, having sponsored events and partnering with the World Poker Tour back in April of this year to help introduce the WPT brand into India. Thus the news of Delta Corp Ltd. taking over the site is being met with a lot of buzz about the future growth of online gaming in the country with a population of over 1.25 billion.
In an interview with CNBC-TV18 (formerly CNBC India), Hardik Dhebar, Group CFP of Delta Corp Ltd., spoke of online gaming in general and poker in particular as having "immense" potential for growth in India.
In comments relevant to the gaming industry in the United States and elsewhere, Dhebar also insisted that the growth of online gaming should not negatively affect the livelihood of brick-and-mortar casinos such as Delta Corp Ltd. already maintains.
"If you look at the worldwide market, both the online as well as the onshore businesses have coexisted and both have grown, whether it is Macau, whether it is Vegas, whether it is America, or southeast Asia.... I don't think [the online space] cannibalizes or it will grow at the cost of the offline. I think the market is big enough for both to co-exist and grow at equal space."
For more about the deal and the future of online gaming in India, visit moneycontrol.com.
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