VIP gambling volume growth in the Macau casino market was last week tracking approximately 7 percent to 8 percent higher than last month’s average, according to a Monday note from brokerage Nomura.
Analysts Harry Curtis, Daniel Adam and Brian Dobson observed that the improvement coincided with reports that some junkets – understood to be a reference to Macau-based VIP gambling junket brands – were no longer offering so-called proxy betting as a “marketing tool” for play in overseas casino markets.
In early August it emerged that Macau’s casino regulator, the Gaming Inspection and Coordination Bureau, had banned the city’s junket operators from using Macau as a base for cross-border settlement of VIP gambling services provided elsewhere.
A new directive on the matter issued by the gaming regulator – but not made publicly available – came into effect on August 1, GGRAsia learnt from industry sources.
In early July Chinese state-backed media alleged that Macau-based junket operator Suncity Group had been involved in operating an online gaming platform for play outside Macau, targeting high rollers from mainland China. Suncity Group publicly denied the online gaming allegations.
Nomura said “positive surprises” in last week’s Macau casino market performance included that in the mass gaming segment, “the protests in Hong Kong do not appear to be having an impact on the weekly GGR [gross gaming revenue] numbers”, and in VIP, “volumes are recovering after junkets ended proxy betting… as a marketing tool overseas last month”.
Brokerage Sanford C. Bernstein Ltd stated in its Monday note on Macau: “Compared to July, GGR improved over the past three weeks before summer holidays are about to wrap up. VIP volume is estimated to have improved by mid-to-high single digits of percent (month-on-month growth) with hold rate within the normal range. Mass also grew at low- to mid-single digits of percent month-on-month.”
Typhoon, HK protests
Sanford Bernstein said Typhoon Lekima at the start of the month was likely to have had some negative effect on Macau GGR. It affected some coastal cities in mainland China and caused the Typhoon Signal No. 8 to be raised in Macau on the afternoon of July 31, until the early hours of August 1, leading to the cancellation of public transport in and to the city.
But the brokerage further noted that the protests in neighbouring Hong Kong had been “immaterial” to the Macau casino market’s performance.
Sanford Bernstein said nonetheless that “negativity surrounding Suncity continues to pressure junket VIP as some agents withdraw some funds and some VIP players delay visiting Macau”.
Nomura estimated in its latest memo on the Macau market, that daily casino GGR last week was approximately MOP829 million (US$102.6 million), down about 5 percent sequentially from the institution’s estimate for the prior week, but “roughly in line” with its estimate.
By segment in the Macau market for the previous seven days, Nomura estimated average daily mass revenues were up approximately 3 percent to 4 percent sequentially compared to the average in July, and that VIP hold percentage was approximately 2.9 percent to 3.0 percent.
Nomura nonetheless expected August GGR performance as a whole to be flat or down by as much as 5 percent judged year-on-year.
Sanford Bernstein estimated total August GGR to be down by between 2 percent and 4 percent year-on-year.
“Delivering positive growth in August would need to rely on outsized VIP volumes and higher hold; something not in our forecast at this time,” wrote Sanford Bernstein analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu.
The institution also noted that a “continuing weakness” in China’s currency the yuan posed risk to Macau GGR growth.
“Historically, there has been some correlation between GGR and the Chinese yuan/Hong Kong dollar and U.S. dollar foreign exchange rate. The Chinese yuan broke CNY7.00 to the U.S. dollar earlier this month and remains weak,” added the Sanford Bernstein team.
Apr 16, 2021Macau’s VIP gross gaming revenue (GGR) in the first quarter of 2021 reached nearly MOP9.13 billion (US$1.14 billion), up 19.7 percent sequentially, according to data released on Friday by the...
Apr 16, 2021
Tax revenue collected by the Macau government from the city’s gaming industry in the first three months of 2021