Macau’s gross gaming revenue will suffer a “negative impact” of around 5 or 6% for the month of August as a direct result of Typhoon Hato, according to brokerage Sanford C Bernstein, with closures and power outages continuing to affect the city.
In a Thursday note, Bernstein analysts Vitaly Umansky and Zhen Gong estimated a revised GGR range of between MOP$22.2 billion and MOP$22.8 billion for August, representing an increase of 18 to 21% – down from the previous estimate of 24 to 26%.
“We are now reducing our August estimate as a result of the disruptions,” they said.
However, it is those companies lacking exposure in Cotai – SJM and MGM – that will suffer the most in the short-term according to Union Gaming’s Grant Govertsen, despite disaster insurance mitigating much of the impact.
“Being only based on the peninsula will have a disproportionate impact for these two companies,” Govertsen said. “Further, and while we don’t believe MGM Cotai experienced any worse damage than any other property in the market, the sudden surge in demand for construction labor could result in a slight delay for this project.
“Wynn Macau seemed to have a lot more gaming space operating than the other peninsula operators both [Thursday] and overnight, thus limiting exposure.”
Govertsen added that VIP revenue was likely to suffer the greatest hit from Typhoon Hato.
“We would attribute this to the relative inability of mass market customers to redirect an already-planned holiday,” he said. “As such, we would expect the low-end of mass market to remain robust despite the typhoon. However, those customers with the ability to easily change their plans – namely premium mass and VIP customers – are likely to lay low for a while, both out of convenience to themselves and also out of political expediency given the sensitivities of gambling during a now-sensitive time period. This will also have a disproportionately negative impact on the high-end heavy peninsula.”
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