Wynn Macau Ltd chairman and chief executive Steve Wynn (pictured) admits he is “confused” about Macau’s poor market performance so far in October. The latest analyst estimates point to a market-wide drop above 20 percent for the full month compared to October 2013.
“I am confused at the moment,” Mr Wynn told a conference call following the announcement of the third quarter results for Wynn Macau’s parent company, U.S.-based Wynn Resorts Ltd.
“The new regulations in smoking, the turmoil in Hong Kong lately, in the month of October, and of course, the policy of the central government in being very aggressive about what appeared to be misconduct and corruption in the government… has had an impact in Macau on October – we all noticed it,” Mr Wynn said.
“It is worse in October than it was before October,” he stressed.
Mr Wynn added: “I don’t know if it is a squall or if we are in the rainy season, or how long it will last, but we are still very bullish on Macau.”
He also noted that Wynn Macau experienced a “perfect storm” in October, experiencing the “lowest hold percentage for a number of weeks that we ever experienced in China”.
Credit Suisse AG’s latest update on the Macau market, released on Tuesday, points to a drop in casino gross gaming revenue (GGR) for full October of about 21 percent. Information gathered by the investment bank indicates that GGR for the first 26 days of the month stood at MOP24.6 billion (US$3.1 billion).
Analysts Kenneth Fong and Isis Wong noted there are some initial signs of stabilisation in the market, with average daily revenue improving to MOP843 million in the week ended October 26, compared to MOP829 million the week before.
They added that the new smoking regulation banning smoking from mass casino floors appeared to have minimal impact on the headline revenue trend but “hurt the mix a bit as we understand that some premium mass players go to VIP room to play as VIP rooms are allowed for smoking”.
Based on checks also through October 26, Wells Fargo Securities LLC estimates October Macau gaming revenue to decline by between 20 percent and 23 percent in year-on-year terms, according to a note released also on Tuesday.
Macau’s Secretary for Economy and Finance, Francis Tam Pak Yuen, has warned that casino GGR in October is expected to drop further judged year-on-year than in September, when it fell by 11.7 percent.
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”As the Macau gaming revenue structure is now leaning heavily towards the mass business … once the border fully reopens, the recovery from mass should drive the sector to bounce more swiftly”
Vitaly Umansky, Louis Li and Shirley Yang
Analysts at Sanford C. Bernstein