Casino operator Melco Resorts & Entertainment (MRE) counted on a rise in mass market gaming to weather a go-slow in its VIP gambling operations in the final quarter of 2019.

On Thursday, figures released showed MRE’s revenue growing 2.7% year-on-year to US$1.45b in the final three months of 2019 whereas operating income dropped 14.7% to $173.4m and net income fell by over 46% to $68.1m.

For 2019 overall, revenue increased 10.5% to $5.74b, operating income rose almost 22% to $747.7m while profits grew 8.8% to $373.2m.

MRE, which runs casinos in Macau, Manila and Cyprus, informed that the company was able to avoid the worst effect of Q4’s “macro headwinds” through the strength of its mass market gaming operations, which generated group-wide mass table revenue of approximately $850m, increasing 12% year-on-year and a new company record.

As reported by, MRE enjoyed improvements in mass table drop throughout its property portfolio but especially so at its Altira Macau and Studio City casinos, while enjoying small increases in mass table win everywhere except its flagship City of Dreams Macau property.

However, the story was different on the VIP gambling side, which faced substantial falls in turnover everywhere except City of Dreams Macau, which surely had the right motivation programs in place, as VIP turnover grew by almost 40% to $16b.

Regrettably, City of Dreams’ VIP win rate dropped from 3.19% in Q4 2018 to only 2.65% in Q4 2019, below the bottom end of the theoretical win range. City of Dreams Macau finished Q4 as a result, with adjusted earnings dropping 8.4% to $210.4m.

MRE’s other properties’ earnings were varied, with Studio City increasing 14.3% to $117.4m, Altira dropping almost one-third to $13.6m and City of Dreams Manila dwindling one-fifth to $53.9m.

In Cyprus, where MRE holds a 75% stake in the Casinos Cyprus (C2) business, the temporary casino in Limassol and three smaller satellite sites reported total revenue of $24.7m, increasing from $15.6m in Q4 2019, mainly on the strength of gaming machine handle jumping almost 80%. Cyprus earnings almost tripled to $8.6m.


MRE informed analysts that the government-ordered 15-day closure of all Macau casinos due to the coronavirus catastrophe started out costing the company nearly $3m per day but modifications were made to reduce this to nearly $2.5m

This week Macau lifted the closure order and casinos have started ‘phased’ re-openings; however, MRE CEO David Sisk said there were just “about 10 customers” waiting to enter Studio City when the doors opened about midnight. After two hours, “we had 20 customers at City of Dreams.”

Sisk mentioned that currently Macau is requiring all customers and casino staff to put on masks and maintain distances between themselves at the gaming tables and slots, so “it’s just not the most comfortable environment to come into right now.

Sisk predicted that authorities in Beijing won’t possibly lift the current restrictions on the Individual Visit Scheme until April or May, whereas other Southeast Asian nations are starting to enforce their own travel restrictions. The anticipation is that Macau’s recovery will be “incredibly slow” and MRE assumes to be “challenged through the future” for at least “four to six months.

MRE CEO Lawrence Ho acknowledged that Macau’s recovery time “is going to be longer than most people think.” Ho accepted current theories that there would be “pent-up demand” among gamblers because of Macau’s closure, but maintains that “more than half the year is going to be lost.”

Ho didn’t say much about MRE’s current regulatory problems in Australia, where the company was forced to suspend its contract to buy 20% of casino rival Crown Resorts before eventually concluding it needed to save its cash to cope with the other challenges currently facing the industry. Ho just said that MRE would “see what happens going forward.”

Damaris is a seasoned writer and analyst of the gambling market with several years of experience writing for various blogs and websites worldwide. He has worked with several casino startups and is a supporter of credible casino projects worldwide.
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