Analysts Label Macau’s July GGR “Weak,” Predict August Recovery

Investment analysts have described Macau’s casino gross gaming revenue (GGR) for July as “weak” compared to market expectations, attributing this to a slowdown in the daily run-rate towards the month’s end. According to the Gaming Inspection and Coordination Bureau, Macau’s July GGR increased by 5.1 percent from June, reaching nearly MOP18.60 billion (US$2.31 billion).

Carlo Santarelli of Deutsche Bank Securities Inc. noted in a memo that the July GGR growth represented a daily increase of 1.7 percent compared to June. This figure was 310 basis points below the historical trend, which saw an average sequential uplift of 4.8 percent from 2013 to 2019.

Vitaly Umansky from Seaport Research Partners also highlighted in a note that the 5.1-percent month-on-month rise fell short of the historical average increase of 9 to 10 percent and was below expectations. Umansky pointed out that July experienced weak performance at both the beginning and end of the month, despite a strong mid-month period.

Umansky observed that daily visitation averaged 95,000 through July 25, a 6.7 percent year-on-year increase. This suggests that while average gaming spend per visitor improved, overall GGR growth was weaker due to reduced performance in the mass market.

Seaport’s analysis estimated average daily GGR in July at MOP600 million, making it the second weakest month of the year, following June. Despite this, August is anticipated to show sequential improvement.

Deutsche Bank forecasted August GGR to be just under US$2.40 billion, reflecting a 3.0 percent sequential daily increase. This forecast is slightly better than the 2.1 percent average sequential improvement seen in August from 2013 to 2019.

Seaport projected August GGR at around US$2.47 billion, marking a 6.7 percent increase from July and above the historical average of 1 to 3 percent, with a more than 15 percent rise compared to August 2023.

Umansky noted that August could test the strength of the recovery, given the weaker-than-expected performance in June and July. He also pointed out that recent crackdowns on money changers in Macau and China might have short-term negative impacts on GGR but are not expected to pose long-term issues, though they could limit performance in August and possibly into September.

Read: Macau GGR projected to reach $29 billion in 2024: Goldman Sachs report

Source: GGRAsia