Macau GGR falls 35.5 percent in August; better than consensus expectations

Monday 31st of August 2015

Macau’s August gross gaming revenue fell 35.5 percent year-on-year to MOP18.62 billion ($2.33 billion), according to data released by the Gaming Inspection and Coordination Bureau.

Gaming revenues in the city have fallen for 15 straight months now following an anti-corruption drive by Mainland authorities, curbing Chinese player levels in Macau.

Accumulated GGR for the first eight months of the year now stands at MOP158.88 billion, a year-on-year decline of 36.5 percent.

The August result beat some analysts' forecasts who predicted the drop would be worse.

VItaly Umansky from Bernstein Research expected the decline to be 37 percent YoY, based on channel checks indicating GGR for the month was MOP17.65 billion and assuming an average daily revenue of MOP600 million.

Union Gaming analysts said August’s results were a bit better than consensus expectations of MOP17.9 billion, but headwinds persist.

“GGR has now remained in a fairly tight range for seven consecutive months, with results generally in a range of MOP17bn to 21bn. August was in the middle of this range.”

“While we would like to see the stocks work on apparent stability, too many headwinds persist, including more recent fears on the China macro story and RMB devaluation, as well as longer-tailed fears on UnionPay restrictions, the specter of a full smoking ban, and the dilutive impact of new supply.”

Operators pinned hopes that new projects such as Galaxy Entertainment’s Phase 2 property, which opened in May would revive demand, but visitors are continuing to shy away from the city with Chinese arrivals down 6.1 percent in July.

"After the opening of Galaxy phase two in May, the downward trend of gaming revenue has been remaining steady, which means incremental revenue brought by the new opening is basically zero," Bloomberg quoted a Nomura Holdings analyst as saying in a note.

"The tougher call is when the mass market can really offset the destruction of high-end demand."