September gross gaming revenue (GGR) in Macau is trending weaker than anticipated, prompting a revised estimate from MOP 17.75 billion ($2.32 billion) to MOP 16.75 billion ($2.09 billion).
This reflects a year-over-year increase of +12 percent, but a month-over-month decline of -15.2 percent. While the month began strong, GGR has softened more than expected as September progresses.
Two typhoons played a significant role in this underperformance. One affected Guangdong, Macau, and Hong Kong, while another more severe storm hit Shanghai, a crucial feeder market for Macau. Despite this, the 12 percent year-on-year increase aligns with historical averages.
As a result of September’s weakness, Q4 GGR is expected to be slightly lower than Q2, ending at MOP 55.1 billion ($6.9 billion), representing a +12.9 percent year-on-year increase but a -2.4 percent decline quarter-over-quarter.
However, October’s outlook is much brighter. Seaport forecasts October GGR to hit MOP 21.5 billion ($2.68 billion), a +10.3 percent year-on-year rise and a +28 percent jump month-over-month.
This projection is based on strong hotel bookings and historical trends, with the October 1-7 Golden Week expected to generate MOP 950 million ($118.5 million) in GGR per day, a +4 percent increase from May’s Golden Week and +25 percent higher than Chinese New Year.
November and December are likely to follow typical seasonal patterns, although December may be slightly weaker due to an expected visit from General Secretary Xi, which could lead to a dip in activity during that period. As a result, Q4 GGR is forecasted to reach MOP 59.9 billion ($7.45 billion), a +10.6 percent year-over-year increase and a +8.6 percent quarter-over-quarter rise.
In a significant development, the Chinese government announced monetary policy stimulus on September 24th, which is expected to boost sentiment in China and Macau. Measures include reductions in the banking system’s reserve ratio, cuts to benchmark rates, adjustments to existing mortgage rates, and liquidity injections into brokers and insurance companies.
The government also announced an increase in state-owned enterprise (SOE) share buybacks to stimulate the Chinese stock market. More easing is anticipated, which markets welcomed, as there had been low expectations for meaningful stimulus in the short term. Following the announcement, the CSI 300 (China A-share benchmark) rose 4.3 percent, and the Hong Kong HSI increased by 4.1 percent.
Macau gaming stocks in Hong Kong saw gains between 2.4 percent and 6.6 percent. Seaport expects U.S. shares in the sector to reflect similar gains, despite the softer-than-expected September GGR.
