Macau casino gross gaming revenue (GGR) fell 8.5 percent year-on-year in November, according to data released on Sunday by the city’s regulator, the Gaming Inspection and Coordination Bureau.
The body – also known as DICJ – said such GGR was nearly MOP22.88 billion (US$2.84 billion) for the month, compared to just under MOP25.0 billion in the prior-year period.
The result almost equalled the previous 2019 record for monthly GGR year-on-year decline. The steepest yearly decline in a month this year was August’s which saw an 8.6-percent contraction.
Investment bank JP Morgan said in a Sunday memo that Macau’s November GGR “was unexciting, yet better than feared,” given analysts’ consensus estimate range of -8 percent to -15 percent.
“Average daily revenue came in at MOP763 million/day, which wasn’t too bad considering that it was in line with seasonally solid third quarter’s (MOP770 million), despite disruptions from significant social unrest in Hong Kong, as well as some visa control in Macau towards the end of the month,” said the institution.
In notes last week several brokerages had mentioned the city’s year-on-year GGR shrinkage for November might be between -9 percent and -13 percent, driven mainly by a decline in VIP gambling volumes.
November was the seventh month during the calendar year that monthly GGR had declined year-on-year, although a number of investment consultants has said that comparison of 2019 GGR performance with 2018 is problematic due to the double-digit percentage expansion seen in most months during 2018.
Brokerage Sanford C. Bernstein Ltd said that assuming the institution’s weekly channel checks during the earlier part of the month were accurate, the implied average daily revenue for the last six days of November “would have been MOP847 million”.
“We preliminarily estimate that for November, VIP was down in the low 30s-percent range and mass was up 9 to 11 percent,” said the Sanford Bernstein team.
November’s result meant that the aggregate of Macau casino GGR for the 11 months to November 30 stood at approximately MOP269.62 billion, a contraction of 2.4 percent year-on-year.
Last week Credit Suisse AG said in a note that some fourth-quarter controls on exit visas for mainland China residents wishing to visit Macau had come into effect on November 22 – earlier than anticipated by the market – and could further dampen the GGR performance for the final three months of 2019.
Brokerage Nomura said in a Sunday note it was estimating an 8 percent to 10 percent decline in December.
“Assuming December GGR increases sequentially in line with its trailing seven-year median, or up roughly 5 to 6 percent versus November, we estimate GGR for the month should settle around MOP24 billion,” said the institution.
“The [circa] 9 percent year-over-year decline implied by the midpoint of our estimated range is slightly worse than November’s 8.5-percent year-on-year decline given, a tougher +16.6 percent GGR growth comparison in December, and President’s Xi’s visit toward the end of the month, which will likely have a more negative impact on visitation and GGR than expected.”
A number of brokerages has speculated that China’s President Xi Jinping will visit Macau in December to mark the 20th anniversary of Macau’s handover. Some analysts think such a visit might depress monthly GGR as some mainland Chinese players might actively choose to stay away from Macau at that time. There has been no official word on any President Xi visit to Macau.
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Analyst at Roth Capital Partners