Macau imports to China rise 36% in May

Casino operators in Macau are taking the opportunity to shift their table supply to a more profitable premium mass floor, which could explain some of May's VIP softness, U.S.-based Telsey Advisory Group says.

Macau's casinos totaled 32.35 billion MOPs ($4.05 billion) in May, up 9.3% from a year earlier. May sales were the slowest growth in four months.

"Overall volume sales in May grew 36% from 34.3% growth in April, with all operators posting solid growth this month," the research house said in its latest report after the trip to Macau.

Premium mass market players use bets measured at thousands of Hong Kong dollars on one hand. Operators said premium mass players offer higher margins than VIP gamblers because casinos don't have to pay commissions to junket operators.

"VIP volumes have been almost flat for the second month in a row, while the public market shows no signs of slowing," Telsey Advisory Group said.

"VIP markets weighed in on May's performance, with overall volume down 1.4% from last year and slightly lower share of holdings, leading to a 1.8% victory," the research house said.

"We believe the VIP softness is due to operators shifting table supplies to mass floors, and the addition of weather and one-off events is likely to have had a noticeable impact as well," it added.

The research house said the public market shows more uniform profit for casino operators, especially for larger market operators.

Sands China Ltd, Galaxy Entertainment Group Ltd and SJM Holdings Ltd all posted "healthy year-over-year profits," while the other three concessionors posted a year-over-year decline in gross gaming revenue (GGR), the report said.

Telsey Advisory Group said it remained optimistic about the long-term outlook for the Macau market. "Recent conversations with casino operators show no indication that recent media and regulatory concerns have disrupted the market," it said.

The cumulative GGR total for May 31 was MOP 165.87 billion, up 15.8% year-over-year.

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