Some mainland China players may have put off visiting Macau in June amid publicity about a crackdown by the Chinese authorities on unlicensed cross-border money exchange, says a Monday note from Seaport Global Securities LLC.
“We believe this crackdown round is having some negative impact on money flows into Macau and certain individuals have postponed their visits to Macau,” stated analyst Vitaly Umansky.
The authorities’ activity “will likely continue to be somewhat of a headwind to GGR [gross gaming revenue] over the next month or two,” he wrote.
But Mr Umansky added: “We expect the crackdown to soften and liquidity in Macau to be not significantly impacted in the medium term.”
June GGR might also have been negatively affected by the Euro 2024 international soccer tournament in Germany running from June 14 to July 14. Macau in June typically had modest play volumes anyway, said Mr Umansky.
“Macau revenue has historically been negatively impacted by large football tournaments – UEFA [Euros], [FIFA] World Cup,” he observed.
Illegal online betting on sports including Euro 2024 was mentioned in a cross-border enforcement case publicised on Monday by Macau’s Judiciary Police, and said to involve MOP72 million (US$8.9 million) in bets per week during the opening phase of the soccer championship.
Macau’s June GGR was down 12.4 percent sequentially on this May’s standout performance of MOP20.19 billion, according to government data issued on Monday.
Relative to June 2019, the trading year before the Covid-19 pandemic, Macau’s latest monthly GGR was down 25.7 percent. For the first six months of 2024, Macau GGR was down 23.9 percent relative to first-half 2019.
Seaport’s Mr Umansky noted regarding last month’s GGR result: “Beginning in early June there has been a crackdown on money changers in Macau, along with their networks in China.”
He added: “Many of these networks utilise cryptocurrency for money transfer – something that has gained wider attention by authorities in China – along with loan sharking activities.”
Macau has experienced a rise in criminal activity related to illegal money exchange over the past year, said recently Wong Sio Chak, the city’s Secretary for Security.
Mr Umansky stated: “This problem has been raised to a national level in conjunction with China authorities looking at continued use of cryptocurrency to move money out of China, not necessarily tied to Macau.”
Seaport forecasts Macau’s July GGR to be around US$2.39 billion, a 9-percent increase from June.
“July is typically a solid month with base mass visitors increasing later in the month and more so in August,” Mr Umansky said. “With the softness in base mass, the continuation of the Euro Cup and the crackdown on money movement activity, we are more conservative on July than normal”
Carlo Santarelli of Deutsche Bank Securities Inc said in a Monday memo the institution expected Macau’s July GGR to be the equivalent of just under US$2.43 billion, or down 20.7 percent relative to July 2019.
