GGRAsia – Capacity limits could push Macau GGR downwards: brokerage

Capacity limits could push Macau GGR downwards: brokerage

Jul 26, 2022 Newsdesk Latest News, Macau, Top of the deck

Brokerage Sanford C. Bernstein Ltd says it expects Macau casino gross gaming revenue (GGR) in July to be down 99 percent versus July 2019, before the onset of the Covid-19 pandemic. July’s average daily rate could be down 87 percent even compared to June, added the institution.

Macau casino GGR fell to its lowest monthly tally this year in June – and the lowest since September 2020 – amid the city’s biggest-ever Covid-19 outbreak. Aggregate GGR fell by 46.4 percent year-on-year in the first six months of 2022.

The Sanford Bernstein team said it expected August casino GGR to decline 89 percent versus the same month in 2019. “But could still be lower depending on length of border closure, capacity limit, and other Covid restrictions,” wrote analysts Vitaly Umansky, Louis Li, and Shirley Yang in a Monday note.

Most Macau casinos reopened on Saturday (July 23) with limited operations as part of countermeasures against Covid-19, and with business volumes seemingly depressed as travel restrictions constrain the number of visitors from mainland China. By Friday, the city had had a nearly two-week shutdown of non-essential businesses, including casinos.

“Channel checks indicate that Macau’s July month-to-date GGR (July 1-24) was still only about MOP200 million (US$24.8 million), largely unchanged since July 10 before the casino closure,” said the Sanford Bernstein team.

“Month-to-date average daily rate of MOP8 million was down 99 percent compared to July 2019 average daily rate and down 97 percent year-on-year compared to July 2021 average daily rate (also down 90 percent month-on-month from June 2022 average daily rate),” it added. “The month-to-date average daily rate was significantly constrained by Covid measures and border closure.”

Macau casinos were allowed to reopen with 50 percent of normal staffing and following strict disinfection guidelines, according to the local health authorities. As a general rule for non-essential businesses allowed to resume operations, there should be no more than one person occupying 2 square metres (21.5 sq feet) of space.

The period July 23 to July 29 is part of what the Macau government calls a “consolidation” phase in terms of the current outbreak of Covid-19, during which most businesses deemed non-essential are being allowed to reopen. The local authorities said such a phase might extend to another week after that.

Macau had a total of 1,814 confirmed Covid-19 cases as of midnight on Sunday, in the current local outbreak since June 18. A total of four new infections was detected on Sunday, but no community case has been reported for two consecutive days.