Macau casino gross gaming revenue (GGR) for June is currently tracking at a year-on-year decline of between 2 percent and 9 percent, suggest two brokerages.
Japanese firm Nomura said in a note on Monday that in the first five days of June, Macau’s aggregate casino GGR was HKD2.5 billion (US$321.8 million), which it said implied average daily revenue – excluding slots – of HKD468 million.
The institution stated that – assuming average daily revenue, excluding slots, of HKD500 million to HKD530 million for the remainder of the month – June’s revenue tally market wide in Macau was likely to be down 2 percent to 7 percent year-on-year, and down 8 percent to 12 percent judged month-on-month.
“June is unlikely to see growth but [is] instead heading for the 25th consecutive month of year-on-year GGR decline,” noted Nomura analysts Richard Huang, Stella Xing, Harry Curtis and Kelvin Wong.
Brokerage Sanford C. Bernstein Ltd, in Hong Kong, said the decline in June could be up to 9 percent. “Assuming an average daily revenue of MOP530 million [US$66.2 million] to MOP570 million for the remainder of this month, June GGR would be MOP15.8 billion to MOP16.8 billion, representing a year-on-year decline of 3 percent to 9 percent, versus a 10 percent year-on-year decline in May,” stated Vitaly Umansky, Simon Zhang and Clifford Kurz in a note on Monday.
Nomura’s team said: “We need more time to gauge whether the softer performance [in early June] was due to the recent termination of phone betting and implementation of new UnionPay terminals, or simply driven by volatility in GGR.”
They were referring to several rounds of regulatory tightening in Macau. Those include: a ban, introduced in early May, on the use of mobile phones by players in Macau VIP rooms, including prohibition of ‘proxy’ or telephone betting on behalf of people not physically present in the casino; and the introduction in Macau retail outlets of new card reading machines with identity document validators for mainland-issued bank cards from China UnionPay Co Ltd.
The Sanford Bernstein’s analysts also mentioned the revised the anti-money laundering rules for Macau’s gaming sector, saying they expect the government “to continue tightening regulatory scrutiny of junket operators and the VIP gaming market”.
The new rules – enacted on May 13 – require casinos and junket operators to engage in more detailed anti-money laundering procedures than were required under the previous protocols.
“Government actions are likely to weigh on VIP gaming in the near-term as well as driving consolidation amongst junket operators as smaller junkets are forced out of the market given higher costs of compliance,” said the Sanford Bernstein team.
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”Assuming that our [Tigre de Cristal] phase two project and the other future operators’ development plans remain on track, we may see the benefits of a ‘cluster’ effect [in the Primorye Integrated Entertainment Zone] as early as 2021”
Summit Ascent, lead developer of Tigre de Cristal