The outlook for Macau’s September casino gross gaming revenue (GGR) “does not look satisfactory”, said the city’s Secretary for Economy and Finance Lionel Leong Vai Tac (pictured in a file photo). The official also expects Macau’s exports of services – including gaming-related services – will have seen a year-on-year contraction for the July to September period.
He pledged the city’s government was prepared to employ stimulus measures to the local economy if necessary, including possibly speeding up work on infrastructure projects.
Mr Leong was speaking on the sidelines of a public event in Macau on Monday. He noted that what he termed the current fluctuations seen in the city’s economy were linked to the “China-U.S. trade war”, trends in foreign exchange rates and “external incidents”.
The foreign exchange reference was understood to concern the value of China’s currency the yuan versus the U.S. dollar. Most bets in Macau casinos are denominated in Hong Kong dollars, a currency pegged against the greenback, meaning that if if China’s currency falls in relative value, mainland Chinese customers at Macau casinos see a drop in their spending power.
The “external incidents” were not identified by Mr Leong. But Macau’s fellow Chinese Special Administrative Region, Hong Kong, has had protests for months against the local government there. On several occasions there have been violent clashes between protestors and police, and disruption to public transport and the city’s international airport.
The head of Macau’s tourism bureau last week said Macau’s visitor arrival tally for August maintained year-on-year growth despite concerns from the city’s travel industry that inbound group tours might be negatively affected by the Hong Kong protests.
Tourism volume in itself is not necessarily a predictor of Macau casino gross gaming revenue (GGR) performance, as a number of analysts has said that the Macau market still tends to be focused on a pool of premium players betting in high minimums, even within the mass-market segment.
Mr Leong – the top Macau official responsible for handling public policy relating to the local gaming industry – said on Monday that the local government would “keep a close watch” on the overall trend in the city’s consumption expenditure and unemployment rate. The authorities would employ measures to help invigorate the local economy should there be a “serious” downtrend identified in the city’s economic performance, Mr Leong pledged.
Macau’s economy shrank by 2.5 percent year-on-year in real terms in the first half of 2019. During the period, while private consumption expenditure and government consumption expenditure rose in year-on-year terms, investment dropped by 28.8 percent. Exports of services during the period went up by 0.2 percent, but exports of gaming services fell by 0.7 percent.
The city’s casino gross gaming revenue (GGR) tally for the first eight months of 2019 stood at MOP198.22 billion (US$24.5 billion), down 1.9 percent from the prior-year period, according to the latest available data released by Gaming Inspection and Coordination Bureau. The August GGR figure, which fell by 8.6 percent year-on-year, also represented the fifth time this year that the city’s casino industry reported a monthly decline in year-on-year terms.
