Macau’s casino gross gaming revenue (GGR) for September fell by 33 percent year-on-year to MOP17.13 billion (US$2.15 billion), according to data released on Thursday by the city’s regulator, the Gaming Inspection and Coordination Bureau. It was the 16th straight month of GGR retreat measured year-on-year and the lowest monthly tally in five years.
September nonetheless saw the slowest monthly rate of year-on-year decline since January, when the market had contracted by 17.4 percent. The rate of year-on-year decline last month fell by 2.5 percentage points compared to August.
The September numbers mean that Macau’s accumulated GGR for the first nine months of the year now stands at MOP176.02 billion, a fall of 36.2 percent compared to the same period in 2014.
Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac, on Wednesday said the government would keep monitoring the evolution of the city’s gaming industry.
The release of September’s numbers allow analysis that shows third quarter GGR was down 34.4 percent year-on-year and down 4 percent from the second quarter. The government will issue later the numbers confirming the third-quarter split between VIP baccarat and mass-market gambling.
“[The] September results were broadly in line with expectations, as a better start to the month was quickly erased by the seasonal – and softer this year – pre-Golden Week malaise at month-end,” said analysts Carlo Santarelli and Danny Valoy of Deutsche Bank Securities Inc.
“While the September result is the smallest level of decline since January (Chinese New Year calendar shift), one would be hard pressed to call it encouraging, especially given the two-year stack accelerated to the downside relative to August (-44.7 percent in September versus -41.6 percent in August),” they added in a note issued on Thursday.
A number of investment analysts have said that Macau’s casino industry has been suffering from the economic slowdown in China and an anti-graft campaign there. The sector has also been hurt by a recent incident affecting the junket system that brings mainly Chinese VIP players to the casinos, namely an alleged fraud case involving a former employee of junket operator Dore Entertainment Co Ltd, which operates VIP facilities at Wynn Macau.
Credit Suisse AG said in a note on Thursday that gaming revenue “has sequentially picked up post-Dore junket”.
“Despite the concern over capital flight post-Dore incident reported on September 9, which has dragged the ADR [average daily revenue] lower in mid-September, the momentum was actually picking up towards the end of the month,” said analysts Kenneth Fong and Isis Wong.
They added: “The gradual pick up in GGR (despite slower seasonality ahead of Golden week holiday) suggested that the Dore incident has not caused major systemic damage and junket liquidity [is] stabilising.”
Neptune Group Ltd, a Hong Kong-listed investor in the Macau VIP gambling sector, warned last week that it may leave the Macau market if there are no signs of improvement in the VIP segment.
Deutsche Bank Securities said it expects Macau’s October GGR to fall 27 percent year-on-year.
“Over the last four years, October, on average, has been up roughly 15.7 percent from September on a win per day basis (+19.5 percent overall). Should the average sequential trend hold firm, something it has not done often, October would fall [about] 27 percent year-on-year,” said Mr Santarelli and Mr Valoy.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia