Macau Jan. GGR falls less than expected

Friday 1st of February 2019

Macau recorded its first year-on-year decline in gross gaming revenue in 29-months in January, though the drop was not as severe as analysts had expected.

According to data from the Gaming Inspection and Coordination Bureau on Friday, Macau GGR fell 5 percent year-on-year to MOP24.9 billion (US$3.1 billion). According to Bloomberg the market consensus had been for a decline of 9 percent.

It's the first year-on-year drop since July 2016, when GGR fell 4.5 percent.

Earlier this month, analysts said the continued impact of the smoking ban, a recent crackdown on POS terminals, and a visitation slowdown ahead of CNY would put pressure on Macau GGR.

Bernstein analysts in mid-January were expecting a GGR growth to be down 8-12 percent.

Looking ahead, the consensus for February is for a gain of 5 percent, helped by an easier year-on-year comparison.

“Our on-the-ground conversations and observations over the last several days have pointed to what feels like the beginnings of a robust holiday period,” Union Gaming analyst Grant Govertsen said in a note. “Of course not only do strong hotel bookings speak for themselves, but the levels of real visitation on the streets (not the official data that's becoming skewed by bridge takers who aren't actually spending money in Macau) is very healthy and confirms our view that mass market demand remains quite high.”

Union Gaming says it expects 9 percent growth in February, although year-on-year comparisons will be difficult again in March and April, which could therefore be relatively flat.

Bernstein Research also said January had been better than forecasts.

“Visitation slowdown that typically happens before Chinese New Year turned out better than anticipated. A few large junkets had also indicated better than expected volumes, and hold rates above normal range,” it said.

Bernstein sees a February gain of 4 percent to 7 percent.