The acknowledgement by the Macau government that the ongoing slump in casino gross gaming revenue (GGR) could lead to the introduction of austerity measures is a “wake-up call” for the city’s officials, says an analyst.
“We believe the public acknowledgment of potential austerity measures may be beneficial for future policy decisions impactful to GGR,” analyst David Bain from Sterne Agee CRT wrote in a note released on Monday.
He added: “In essence, discussions could act as a ‘wake-up call’ for policy makers of key gaming topics, including stronger smoking restrictions and table allocations for new property openings.”
Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac, on Saturday estimated the city’s GGR tally for July could come in below MOP18 billion (US$2.25 billion). Mr Leong added that, if that were the case, the Macau government would consider introducing austerity measures to control spending as early as next month.
The Macau government has set a minimum MOP18.35-billion bottom line for monthly GGR in 2015. If results fall below that level, local authorities will mull the introduction of austerity measures.
In June, monthly GGR in Macau already fell below the MOP18.35-billion line – when it stood at just MOP17.4 billion. Casino GGR has fallen for 13 consecutive months when judged year-on-year.
Analysts Vitaly Umansky, Simon Zhang and Bo Wen from brokerage Sanford C. Bernstein Ltd said in a report on Monday that “a possible scenario” was for July GGR to fall below MOP18.35 billion. According to them, that would mean average daily revenue of MOP570 million or lower, for the period between July 27 and July 31.
However, the Sanford Bernstein team expects July GGR to come in slightly above the MOP18.35 billion mark, at around MOP18.4 billion to MOP18.5 billion, representing a year-on-year decline of around 35 percent. Similar estimates were also released on Monday by Sterne Agee CRT, Wells Fargo Securities LLC and UBS Securities Asia Ltd.
“Our industry channel check indicates that Macau GGR for the month through July 26 was MOP15.5 billion. The average daily revenue for the last week was MOP614 million, higher than June’s average daily revenue of MOP579 million and last week’s average daily revenue of MOP585 million,” the Sanford Bernstein team stated.
They added: “We expect to see more constructive Macau government policies, particularly in the areas of promoting Macau’s tourism to stimulate economic growth which should have a positive impact on mass gaming.”
Cameron McKnight from Wells Fargo however pointed out: “We do note that the Secretary for Economy and Finance made similar comments last month with revenues ultimately beating his projections.”
Jun 19, 2018Two Macau gaming labour groups have expressed concerns to GGRAsia regarding the likely effectiveness of a proposed bill to ban the staff of the city’s casinos from all local gaming floors...
Jun 19, 2018
Jun 19, 2018
Jun 19, 2018
The amount casino equipment maker Paradise Entertainment is spending to buy warehousing space in Macau