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Macau’s July gaming revenue falls short, analysts forecast recovery in August

Macau’s Gross Gaming Revenue (GGR) for July did not meet expectations, closing the month at MOP18.6 billion ($2.31 billion), according to analyses by Seaport and Deutsche Bank.

While this figure represents an 11.6 percent year-on-year increase and a 5.1 percent month-on-month rise, it fell short of historical averages and market predictions.

MACAU GGR, JULY 2024

Seaport analyst Vitaly Umansky noted that July’s 5.1 percent month-on-month increase is below the historical average of 9-10 percent, Bloomberg consensus had anticipated a 14 percent year-on-year rise, with Seaport estimating a 15 percent increase.

Meanwhile, July exhibited a weak start and finish, despite a solid mid-month performance. Daily visitation averaged 95,000 through July 25th, a 6.7 percent year-on-year increase, indicating a stronger average gaming spend per visitor, despite GGR growth being modest.

Several factors affected July’s performance. The month had only 12 weekend days compared to 15 in July 2023, impacting GGR – since weekends typically yield 20 percent higher revenue than weekdays.

Additionally, the UEFA European Football Championship, which ran from June 14th to July 14th, was said to historically dampen Macau’s gaming revenue. Furthermore, a crackdown on illegal money transfers and loan sharking activities in Macau and China, initiated in June, has negatively impacted money flows and visitation.

Despite these challenges, Seaport remains cautiously optimistic, forecasting a 6-7 percent increase in GGR for August, potentially reaching MOP19.84 billion ($2.4 billion). This optimism is based on a favorable calendar with more weekend days and an expected rise in visitation, including package tours.

Seaport acknowledges potential risks to August’s recovery, including weather disruptions and the ongoing crackdown on illegal money activities.

Despite these headwinds, there is cautious optimism for a GGR rebound, contingent on increased visitation and favorable calendar conditions.

Deutsche Bank’s analysis showed that the 5.1 percent month-on-month increase in July was equivalent to a 1.7 percent per day rise from June, which is 310 basis points below the historical trend of a 4.8 percent sequential increase.

The July GGR was down 24.0 percent compared to July 2019, worse than their pre-month forecast of a 20.7 percent decline, with forecasts expecting a 21.1 percent drop.

Macau GGR hits $2.31B in July, up by 11.6% yearly

For August, Deutsche Bank projects a GGR of $2.3 billion, down 21 percent from August 2019. This forecast assumes a 3 percent sequential per day increase, above the historical average of 2.1 percent for August relative to July.

Year-to-date, Macau’s total GGR is at 76.1 percent of the same period in 2019. The mass market segment is performing robustly at 113 percent of 2019 levels, while VIP gaming lags significantly at 23 percent.

At the same time, Deutsche Bank analysts estimated that the base mass market recovery is still subdued, estimated at 75-80 percent of pre-pandemic levels, offset by strong premium mass performance.

Nelson Moura
Nelson Mourahttp://agbrief.com
Editor and reporter with 10 years of experience in Greater China, namely Taiwan and Macau, in printed and online media, with a focus on finance, gaming, politics, crime, business and social issues.

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