GGRAsia – Macau govt monitoring gaming sector evolution: Leong

Macau govt monitoring gaming sector evolution: Leong

Sep 22, 2015 Newsdesk Latest News, Macau, Top of the deck

Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac (pictured), on Monday said the government is closely monitoring the evolution of the city’s gaming industry. The official added the government would strive to improve the existing regulation and supervision mechanisms.

Mr Leong, speaking to reporters on the sidelines of a public event, also commented on the alleged fraud involving one of Macau’s junket operators. Dore Entertainment Co Ltd, which operates VIP facilities at Wynn Macau, announced a fortnight ago it had been a victim of internal fraud by a former employee.

The secretary said different government departments are following up the case according to their administrative responsibilities. Mr Leong, who last week met with representatives of the city’s six casino operators, also pledged to increase scrutiny over the gaming industry, including junket operators.

On Monday, Macau’s Gaming Inspection and Coordination Bureau announced it would revise the Administrative Regulation No. 6/2002, which regulates the conditions and procedures for issuing a licence to a junket operator.

Commenting on the outlook for Macau’s monthly casino gross gaming revenue (GGR), Mr Leong said that September – following the summer holidays – is not a peak month for Macau’s tourism sector and the city’s casinos. The official added the government would keep a close eye on what he referred to as the changes within the gaming industry.

Based on channel checks through September 20, Wells Fargo Securities LLC said it estimates September GGR to decline between “32 percent and 34 percent” from the MOP25.56 billion (US$3.20 billion) recorded in the same month of 2014. It would mark the 16th straight month of GGR retreat measured year-on-year.

“Checks suggest average daily revenue (ADR) was around MOP493 million to MOP600 million last week, versus MOP608 million in the prior week and versus August’s ADR of MOP601 million,” Wells Fargo analyst Cameron McKnight said in a note on Tuesday, revising its preliminary checks from Monday.

Mr McKnight added: “According to our latest channel checks, the sequential decline last week was primarily due to a: (1) Dore’s VIP volume dropping 30 percent to 40 percent (versus prior three month average), and (2) low VIP win rate at one of the major junket operators.”

The brokerage expects September’s GGR to show a sequential decline of “approximately 1 percent month-on-month”, slightly better than “historical September seasonality of down 5 percent month-on-month, on average, to account for China’s new Victory Day holiday on September 3”.

David Bain of Sterne Agee CRT said in a note on Tuesday that the September GGR run rate “indicates a -32 percent year-on-year monthly result, or MOP17.5 billion”. “Our September GGR growth forecast range remains between -29 percent to -35 percent,” he added.

(Updated at 9.53am, Sept 23)