Casino gross gaming revenue (GGR) in Macau fell by 3.5 percent year-on-year in July, to MOP24.45 billion (US$3.03 billion), according to data from the city’s Gaming Inspection and Coordination Bureau, released on Thursday.
July’s tally broke two consecutive months of growth in the Macau market and was the fourth time this year that the city’s casino industry reported a monthly decline in year-on-year terms.
The Macau market’s GGR tally for the first seven months of 2019 stood at nearly MOP173.96 billion, down 0.9 percent from the prior-year period, according to the official data.
Several investment analysts had lowered their respective forecasts as July progressed, as trends in gaming volume trends appeared to moderate.
Japanese brokerage Nomura said in a Wednesday note – ahead of the release of the official data on Thursday – that despite a strong start to the month, “underlying [gaming] volume trends slowed in the last one to two weeks of July”.
“We believe that many premium customers took the last 10 days to spend time with families. They always return though, so we view the slowdown as temporary,” wrote the Nomura analysts.
“Despite the weaker month-end checks, we expect positive year-on-year growth to resume once we lap the tough +17.1-percent comp in August,” added the Nomura analysts.
Brokerage JP Morgan Securities (Asia Pacific) Ltd said in a Thursday memo that the decline in July GGR “wasn’t totally unexpected given well-publicised protests in Hong Kong,” which might have impacted the inflow of visitors to Macau.
The JP Morgan team stated: “It [July GGR] was still a disappointing print, with daily run-rate failing to grow sequentially despite better seasonality (MOP789 million/day, versus MOP794 million in June or MOP826 million in the first half of 2019).”
It added: “For July, we estimate VIP GGR fell over 20 percent year-on-year … and mass GGR grew +12 percent to 13 percent year-on-year, and VIP clearly drove the downside versus expectation.”
The analysts said that based on their checks, VIP demand seems to have “deteriorated sharply” toward the latter half of July “with no obvious reason,” in turn suggesting it could be a “short-term blip amid heightened media attention on Hong Kong … and media reports on junkets’ proxy/video betting in Asean jurisdictions”.
“We’d like to think the July miss was not ‘thesis-changing’, though certainly disappointing,” said the JP Morgan analysts.
Brokerage Sanford C. Bernstein Ltd also mentioned a decline in demand in the latter half of the month, “with some agents and players pulling out on the back of worries over heightened scrutiny overall after the Suncity incident”.
That was a reference to a July report by Chinese state-backed media that alleged that Suncity Group had been involved in operating an online gaming platform for play outside Macau. Suncity Group publicly denied the online gaming allegations, adding it had decided that even if certain “products” were “legally allowed to operate in other countries and regions”, the company would not adopt them “if the laws of Macau do not allow it”.
(Updated at 3.30pm, Aug 1)
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Spending on purchase of goods, commissions paid and customer rebates in Macau's gaming industry in 2018