Macau’s casino sector will suffer its first quarterly EBITDA fall in three years despite casinos enjoying ‘unusually high luck’ with their VIP players.
JP Morgan’s DS Kim and Christopher Tang believe that mass GGR will increase by around 10 per cent year-on-year to a new record but EBITDA will fall by three per cent year-on-year due to VIP rolling chip falling by around 20 per cent.
“Though it’s tough to quantify at this point, we suspect EBITDA momentum could be worse than reported, if we normalise the VIP luck factor,” they said. “We think it’s crucial to look at luck/hold-adjusted EBITDA this quarter, as most junkets and some premium mass lounges held unusually high (vs historical trends) for no apparent reason. Is there any structural change? Most industry participants say ‘we just had really good luck,’ but we’re keen to hear operators’ thoughts.”