Your Daily Asia Gaming eBrief: Macau recovery well underway, only slower

Tuesday 13th of April 2021

Good morning.
Today’s ebrief is all about recovery and forecasts. Whilst first quarter GGR in Macau still registered a fall from 2020, forecasts from analysts show that the Macau gaming industry is actually well on the way to recovery - today's AGB infographic puts into perspective. That being said, Morgan Stanley notes that Q1 EBITDA estimates for Macau’s six operators may be a touch too high, due to uneven recovery and higher expenses. We also examine the recovery of the in-person meetings and events industry - which may not see pre-pandemic numbers until at least 2023. Finally, over to Japan, news has come out of a Kyushu IR Promotion Council, aiming to win one of the three available licenses from the central government.

First, the news

Macau gaming industry recovery underway [Infographic]
Macau Q1 consensus estimates likely too high: MS
Macau GGR still weaker-than-expected: Bernstein
Macau residents to get MOP8,000 to spend
Slow road to recovery for in-person convention industry: Bernstein
HK arrests 65 in illegal gambling raid, including policeman
Evolution to buy Australia's Big Time for EUR450m
CNMI GDP was already down 11.2 percent in 2019

What you need to know

Macau Q1 consensus estimates likely too high: MS

Consensus estimates for Q1 earnings at Macau’s six operators may be too high, with corporate EBITDA likely to be lower than the prior quarter due to an uneven recovery and higher expenses, Morgan Stanley says. The firm said it expects the industry to report Q1 corporate EBITDA of $181 million, which is 23 percent lower than in Q4. That’s despite an expected 8 percent gain in gross gambling revenue to $3 billion. GGR was led by the mass segment, which likely gained about 11 percent, while VIP was down by about 3 percent quarter-on-quarter.

Slow road to recovery for in-person convention industry: Bernstein

Analysts at Bernstein are expecting a slow recovery of the in-person meetings and events industry, with visitation levels from this subset to return at 2023 at the earliest. The news could be a hit to Las Vegas casinos, which see convention-related business as a critical driver of recovery post covid. However, not all is lost for convention-focused hotels and integrated resorts, said Bernstein, as they are a natural host for hybrid events (taking the best of physical and virtual events).

High-powered Kyushu IR Promotion Council launched

The stars of the regional political and business world came out on Monday to formally launch the Kyushu IR Promotion Council, aiming to win one of the three available licenses from the central government. There are 22 constituent organizations that form the membership of the new group, including the Nagasaki Prefectural Government, the Sasebo Municipal Government, the Kyushu Economic Federation, and the Kyushu Regional Governor’s Association.

Insights

BY THE NUMB3RS

Macau gaming industry recovery underway [Infographic]

Whilst first quarter GGR in 2021 still showed negative year-on-year growth, the truth is that Macau’s gross gaming revenue recovery is well and truly underway. Recovery is expected to further accelerate in the second half of the year, bringing full-year GGR estimates to US$19.3 billion, a 153 percent increase from 2020. For many operators in Macau and around the world, the terrain ahead will be difficult, but we look forward to reaching new heights again soon.

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Supplier Special

Hop aboard Digitain’s Keno Express

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BMM is the longest established and most experienced private independent gaming certification lab in the world, providing professional technical and regulatory compliance services to the gaming industry since 1981. BMM authored the first set of independent gaming standards in 1992 and the first set of online gaming standards in 2001.