The expansion of the Macau Grand Prix to two weekends could have a negative double-digit impact on gross gaming revenue for the month as congestion and accessibility concerns push punters away.
Whales who are motorsports fans still might have come to the SAR for the spectacle, but overall GGR tends to drop during the month, due to the racing event, notes IGamiX Managing Partner Ben Lee in this week’s Under the Scope.
“On the whole, there are fewer VIPs that will come to Macau during the Grand Prix week,” notes Lee, as Macau finalized its two-weekend run of the 70th Macau Grand Prix.
Overall, the event drew some 1450,000 spectators, with the Macau peninsula rerouting its primary transport avenues to allow for the city-wide race.
The effect: increased mobility problems– likely the primary reason behind punters’ avoidance of the city during the period, expresses Lee.
“Particularly if you’re a regular visitor to Macau, you come predominantly for the gaming experience,” notes the expert, pointing out that these customers can’t get around between their preferred halls – preferring other less-congested jurisdictions for their gaming.
Coupled with the traffic is an increase in room rates, making comping less attractive for operators, meaning they’re less likely to offer discounted or subsidized offerings during the weekends.
4Q23
The decrease in GGR this month, compared to the strong results seen in October – mostly due to Golden Week – should cause a slowdown in 4Q23 results.
Looking at the brass tacks, Lee notes that “November and December will probably be around the MOP16 billion – MOP16.5 billion mark, per month”, after October raked in MOP19.5 billion, the highest monthly tally since the pre-pandemic period.
Lee notes that the major patron draw for the Macau Grand Prix has typically been the Hong Kong market, and – to a lesser extent – China, pointing out that “I certainly have not come across any international VIPs coming to Macau, specifically to participate or to watch the Macau Grand Prix”.
So, while the event does drive visitation, it’s not necessarily impacting operators’ choices for attracting overseas clientele – one of the mandates of their new gaming licenses.
Looking at GGR from games of fortune, as Macau’s oversight body (DICJ) measures it, Lee is looking at between MOP160 billion and MOP163 billion for the full year, given the 3Q23 results published by the DICJ – showing some MOP148.44 billion.
And looking at EBITDA, Lee notes that the “trend should continue from 3Q23”, boosted by October’s impressive results.
Racing and gaming
Las Vegas simultaneously held its debut Formula 1 race as Macau celebrated its second weekend of commemorations for the 70th Macau Grand Prix. The event in the US, however, was met with multiple issues, as revenue expectations appeared to top viewer experience.
Lee notes that the legacy of Macau’s racing event helped it maintain its solid reputation, even as Las Vegas’ event failed to meet many user hopes.
“The hosting of the event is well-oiled, and well-practiced, whereas the one in Vegas is its inaugural race, and as a result, they have had a few hitches,” Lee noted diplomatically.
“They’re now just starting to realize that hosting a Grand Prix, particularly on street tracks, is not for the faint-hearted,” he points out.
Not for the first time, Macau can be teaching Las Vegas lessons, but it can also learn from its own experience, notes Lee.
A fast and furious strategy pushes away the whales, and the mass doesn’t appear to be able to fill the gap, but Macau is still on track for a record year as it emerges at racing speed from the pandemic.
