Macau’s gross gaming revenue (GGR) reached MOP19.75 billion ($2.46 billion) in August, representing a recovery to 81 percent of the GGR recorded in August 2019. This marks the best relative comparison since Macau’s reopening following the pandemic.
According to the latest investment memo from Seaport, Macau’s August’s revenue grew by 14.7 percent year-on-year and 6.2 percent month-on-month. This growth was supported by strong visitation and consistent daily earnings throughout the month. Early-month tourism showed over a 14 percent year-on-year increase, according to the Macau Government Tourism Office (MGTO).
The average daily GGR in August exceeded MOP637 million ($79.27 million), making it the third strongest monthly daily GGR in 2024, excluding the Golden Week holidays.
The calendar’s favorable structure, with five Fridays and Saturdays and four Sundays, likely contributed to revenue growth, alongside solid visitation and minimal impact from the Olympics.
Illicit money exchange crackdown
Vitaly Umansky, a senior analyst at Seaport, notes that the crackdown on money changers and their networks in China may have led to a reduction in money flows into Macau and caused some individuals to postpone their visits. However, the overall impact on the city’s gaming revenues is expected to be minimal.
The investment memo suggests that the crackdown will not significantly affect Macau’s GGR. As we approach the fourth quarter, it is anticipated that the intensity of these enforcement actions will decrease, and any disruption to revenue streams will likely remain limited.
Umansky also highlights that the heightened scrutiny, which includes a focus on loan sharking activities, reflects broader national efforts to combat illegal financial practices and the use of cryptocurrency to move money out of China. Over the past year, Macau has seen a rise in criminal activity related to illegal money exchange, prompting authorities to address these issues more aggressively.
Impact of Xi’s visit in the fourth quarter
The outlook for Macau’s GGR remains cautiously optimistic for the third quarter of 2024. According to Morgan Stanley‘s investment memo, GGR for 3Q24 is projected to be relatively flat quarter-on-quarter, with a potential slight decline of 2 percent compared to 2Q24.
This projection assumes a 9 percent month-on-month decrease in September GGR, consistent with seasonal trends. Despite this, robust leisure visitations continue to positively support GGR.
Looking ahead to the fourth quarter, the outlook becomes more cautious. Morgan Stanley notes that Macau SAR will celebrate its 25th anniversary in December, and the anticipated impact of President Xi’s visit and the Chief Executive election in October is likely to result in weaker GGR performance.
For September, Morgan Stanley forecasts a GGR of MOP18 billion ($2.24 billion), reflecting a 20 percent year-on-year increase but a 9 percent month-on-month decline.
