Macau’s August GGR result of MOP$19.8 billion (US$2.47 billion) beat consensus while recording its highest recovery rate compared to its respective 2019 month since the pandemic ended at more than 81.5%, but industry analysts are anticipating a far more subdued September.
In a Sunday note shortly after the Gaming Inspection and Coordination Bureau (DICJ) released its August figures, investment bank JP Morgan wrote that it’s unlikely September’s GGR is going to wow due to the month being a “shoulder season” between the summer holiday and October Golden Week.
Analysts DS Kim, Mufan Shi and Selina Li are forecasting September GGR of around MOP$17.5 billion (US$2.18 billion), which would represent a 12% month-on-month decline at a run-rate of MOP$580 million (US$72.2 million) per day.
This would also keep combined 3Q24 GGR flattish quarter-on–quarter and therefore below historical seasonality but “should not come as a surprise by now given June/July misses and a slew of deteriorating datapoints from the China consumer and leisure space in the past few months,” they wrote.
“Rather, we believe the Macau’s demand trend is tracking slightly better than the market has feared lately, faring better than many other China consumer spaces.”
Carlo Santarelli of Deutsche Bank isn’t quite as bearish, tipping a smaller 9% month-on-month decline to around US$2.24 billion, or around 6.2% lower per day, while Seaport Research Partners Senior Analyst, Vitaly Umansky, has September GGR down 10% versus August at MOP$17.78 billion (US$2.21 billion) and in line with historical trends.
Umansky notes that September is historically among the weakest months of the year along with June and also has one less “weekend day” – a Friday, Saturday or Sunday – than August did.
He also suggests any short-term impact from China’s crackdown on illicit money exchange gangs should ease as the year progresses.
“We believe this crackdown round is having some negative impact on money flows into Macau and certain individuals have postponed their visits to Macau; however, the overall impact is likely minimal, and we do not expect the crackdown to continue in the same degree of severity as we enter the fourth quarter,” he wrote. “We (and the casino operators) do not expect the crackdown to materially impact revenues.”
