Macau mass market GGR estimates likely to be cut, UBS says

Analysts are likely to revise down their estimates for mass market gross gambling revenue growth in the second half, UBS said in a note, adding that the drag on the market from
a lack of new supply, disruptions to comply with new smoking regulations and a slower macro economy may have been underestimated.
The firm made its comments after Macau’s Gaming Inspection and Coordination Bureau reported that July GGR fell 3.6 percent, the second straight monthly decline, hurt mainly by the diversion of betting on the FIFA World Cup during the period.
Year-to-date, revenue is up 10.2 percent, UBS said.
Gambling revenue from Macau’s 35 casinos fell to 28.4 billion patacas ($3.56 billion) in July from 29.5 billion patacas a year earlier. Analysts were expecting a drop of between 2-5 percent.
UBS estimates that mass market revenue grew about 21 percent to 25 percent in July, while VIP is likely to have fallen between 14 percent and 18 percent.
The World Cup ended on July 13th, but the investment bank noted no noticeable pick up towards the end of the month.
UBS said the mass market remains on track to meet its own full-year consensus of 27 percent growth, after having gained 33 percent year to date. However, it said the consensus for the mass market is for growth of 30 percent, which would imply a rise of 25 percent in the second half, which may be overly optimistic.
UBS said it believes the VIP market may have stabilized after hitting a low in June, but the recovery is proving slower than anticipated.