Macau Gaming Likely Softer Pre-Golden Week

19 Sep 2017

Macau Gaming Likely Softer Pre-Golden Week

A slight slowing in late September regarding consumer demand for Macau casino gambling – prior to the expected peak holiday period of October Golden Week – would be likely to contribute to a month-on-month decline in September for the city’s gross gaming revenue (GGR), said a brokerage.

But Telsey Advisory Group LLC added that judged year-on-year, expansion for September GGR was still expected, in the range of 12 percent to 14 percent.

“The pre-Golden Week period is expected to be slower than normal, which suggests that next week should be soft as well before the holiday during the first week of October,” wrote analyst David Katz in a Monday note, referring to a holiday period in China encompassing the country’s National Day on October 1. This year China’s State Council has declared October 1 to 8 as the festive period.

Mr Katz added in his Monday note: “According to our industry sources, the past seven days in Macau generated GGR table win per day of MOP595 million [US$74 million] to MOP605 million, which suggests that the month is running at MOP700 million to MOP710 million. This implies that the month is running up 12 percent to 14 percent [year-on-year] and down 7 percent to 9 percent sequentially.”

Analysts at another institution suggested early-September GGR demand might also have been affected by the aftermath of Typhoon Hato and of Typhoon Pakhar, which respectively struck the city within the space of a few days in late August. The first storm in particular caused damage to local infrastructure and disruption to tourist travel.

“We believe that month to date daily GGR has been impacted by: normal VIP hold percent of approximately 2.8 percent (versus the “normal” range of 2.7 percent to 3 percent); and early-month impact from Typhoons Hato (the strongest storm to hit Macau in 53 years) and Pakhar,” stated Japanese brokerage Nomura in its Monday note.

Telsey and Nomura said year-on-year comparisons in GGR for September were made difficult by factors including the fact that demand in September 2016 was influenced by the opening on August 22 that year of Wynn Palace, a new US$4.4-billion Cotai resort from Wynn Macau Ltd.

Nomura estimated September 2017 GGR growth would be 15 percent year-on-year. Sanford C. Bernstein Ltd analysts Vitaly Umansky and Zhen Gong forecast September GGR expansion would be 10 percent to 12 percent year-on-year.

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