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Julie Moraine July 23, 2019 3 min read
MGM China and Melco Resorts to Post Strong GGR Results
- MGM China and Melco Resorts set to post record-high GGR
- Growth boosted by specific investment
- GGR for Macau in July falls year-over-year
Macau-based MGM China and Melco Resorts are expected to report record-high GGR for the second quarter of the year.
MGM China and Melco Resorts Expected to Post Big Results
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 publishing their results by the end of the week with analysts Sanford C Bernestein releasing a memo confirming speculations that the companies’ 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 Bernstein assuring 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 say regarding the possible future results generated by the gambling sector 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 Macau 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 case is Suncity Group which has been accused of syphoning off VIP customers to offshore gambling venues so as to avoid paying gambling revenue in Macau. The accusations have been firmly denied by the company.
Despite the lack of proven culpability, Suncity Group has triggered a withdrawal from investments in the junket market, as China and Macau are now scrutinizing the market in great detail to establish whether customers have been intentionally diverted to other venues.
Recent developments do presuppose testier times ahead, but Macau managed to turn a good GGR in June, 2019, which marked the third time of steady growth year-over-year. Despite the temporary tumble in July, things are looking up, particularly for MGM and Melco.
With 4 years experience as an analyst, Julie—or ‘Jewels’, as we aptly refer to her in the office—is nothing short of a marvel-worthy in her attention to the forex and cryptocurrency space as she quickly became the first pick to co-pilot education to the masses with Mike.
Casino July 23, 2019
Casino July 23, 2019