The downturn in Macau’s gross gaming revenue (GGR) should ease for a second consecutive month in October, on the back of a positive performance during China’s Golden Week holiday marking National Day, say several investment analysts covering the gaming sector. They estimate the rate of year-on-year GGR decline should slow down to between 28 percent and 30 percent.
“After a decent Golden Week (daily GGR above MOP900 million [US$112.75 million] on days 1 to 7), we estimate daily revenue has moderated to around MOP560 million, which is slightly better than our initial expectations and tracking largely similar to September’s average run rate,” Anthony Wong and Angus Chan from UBS Securities Asia Ltd wrote in a Monday note, quoting data from unofficial industry channels.
They added: “For the full month of October, we now expect revenues to be between MOP19.9 billion and MOP20.2 billion”.
GGR in September decreased 33.0 percent in year-on-year terms. In the previous month, gaming revenue had posted a decline of 35.5 percent, ending a period of five consecutive months of easing GGR decline rates measured in year-on-year terms.
October is also tracking for the slowest rate of year-on-year decline since January. In the first month of 2015, the market had contracted by 17.4 percent.
“October 2015 having a year-on-year decline of over 30 percent would be quite disappointing in light of a relatively strong Golden Week,” Sanford C. Bernstein Ltd said in a note on Monday.
“If Studio City opens strongly this week, average daily revenue for the week could surprise over MOP600 million,” added analysts Vitaly Umansky, Simon Zhang and Bo Wen.
Casino resort Studio City, majority owned by Melco Crown Entertainment Ltd, is opening its doors this Tuesday. The property, located in Cotai, has been allocated 200 new-to-market live gaming tables by the Macau government and will receive a further 50 tables in January.
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"I am not going to speculate on what the [casino licence refreshment] tender requirements would be. I have full confidence and faith in the Macau government to treat everyone fairly"
Wilfred Wong Ying Wai
President and chief operating officer of Macau-based casino operator Sands China