Breaking Revenue Records Again? In Macau

Posted: April 12, 2010 in Uncategorized

Apr 10, 2010
Extracts of Inside Asian Gaming

“Leak With A Hole In It”                    

Have the media and analysts been misled to the tune of billions of patacas per month regarding Macau’s stellar gross gaming revenues (GGR) in the first quarter of 2010?

The reason we ask this question is that a figure quoted recently in the Macau media giving the GGR for the first three weeks of March as 13 billion patacas has been challenged—reportedly by a source with “direct knowledge of the situation”.

Reuters in Hong Kong, quoting the source, said the GGR figure for the whole of March would only be around HKD13 billion. That’s the equivalent of 13.3 billion patacas. For the original number quoted in the Macau media to have been accurate, it would mean Macau had only managed to produce revenues of 300,000 patacas in the final week of March—an unlikely scenario. 

Just as tellingly, the source told Reuters the figures for February were “around the same” as March. That could mean previously reported unofficial data for February of 13.5 billion patacas aren’t correct either. While the odd half billion patacas here or there won’t make a major dent in Macau’s year-on-year growth numbers, it does give cause for concern, as it could mean analysts are working with unofficial monthly figures that are out by 3.5 percent or more, rather than a few basis points here or there.

Of course, even the briefing reported by Reuters on Friday correcting the figures quoted in Macau newspapers is technically ‘unofficial,’ even if it comes from ‘an official’. We will have to wait and see for the full picture. Macau’s gaming regulator, the DICJ, doesn’t issue the official GGR numbers for the first quarter of 2010 until mid-April.

How did the industry get in this pickle? The confusion points to a systemic problem with some of the performance data coming out of the Macau market. That problem is Macau leaks like a sieve regarding GGR and market share numbers. We have all got so used to crunching numbers based on those unofficial figures that we have potentially led ourselves as a sector into error. (We include Asian Gaming Intelligence in this sackcloth and ashes analysis.)

Professional Ground Panel Commentary:

We have been observing the above phenomenon since 2006… that during periods of confidence-building for the territory’s gaming industry and to influence debt financing for certain big casino resort projects, such “overly positive expectations” would appear.

For those who are keeping track, Macau’s DICJ (i.e. Gaming Control Board) has over times, comes forward to make downward adjustments even to their published gaming stats for past quarters (apparently due to some technical errors).

Currently, there are at least a few existing casino resort projects need additional debt financing or private equity funds injection of working capital, in order to revive, and or to complete the stagnated projects that they had promised Macau government, in Cotai Strip.

Therefore, it is not a surprise that there are more such “happy & upbeat” gaming revenue figures to be “leaked” to analysts.

Full of cash into Macau

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