Maybe Macau GGR softness amid political milestones: GS

Macau’s casino gross gaming revenue (GGR) has seen seasonal softness post October Golden Week, and might continue to do so in the remainder of this year, suggested Goldman Sachs (Asia) LLC in a Monday memo. Last month, which included that important holiday for consumers from the Chinese mainland – Macau’s main feeder market – had generated the best monthly GGR since January 2020, at nearly MOP20.79 billion (US$2.60 billion).

The banking institution said the city might see GGR impacted from several politics-related events that were scheduled to occur in December.

The memo by analysts Simon Cheung, Alpha Wang, Leah Pan and Dorothy Wong stated, referring to China’s leader, and to an important milestone for Macau since its handover from Portuguese administration to that of China: “Investors will likely pay attention to whether President Xi [Jinping] will confirm a visit to Macau for the 25th anniversary of Macau’s return to the motherland.” The anniversary is on December 20.

The analysts also mentioned the expected swearing-in on the same date, of a new Macau Chief Executive, Sam Hou Fai, the first post-handover leader of the city to have been born on the mainland.

“Past experience would suggest a temporary GGR impact from late November,” in relation to such ceremonies and anniversaries. Analysts have mentioned in relation to previous visits by China’s leadership, the likelihood some players postpone trips to Macau.

A potential plus for Macau in terms of politics, was “whether President Xi may introduce other policies to support Macau (e.g., more IVS [individual visit scheme] cities, [and] less 온라인카지노 friction for commuting between Macau and Hengqin),” wrote the bank’s analysts. The latter was a reference to a piece of mainland territory next to Macau that is being increasingly touted as an important future entry point for mainland visitors.

Goldman Sachs observed that Macau’s daily casino GGR had “decelerated” to between MOP560 million (US$69.9 million) and MOP630 million a day, or “flattish” year-on-year, post October Golden Week.

The festive period had seen daily GGR as high as MOP1.1 billion, a year-on-year growth of 30 percent, noted Goldman Sachs.

Post-holiday, mass-market GGR had receded, though it was still 110 percent t0 120 percent of pre-Covid levels, compared to October Golden Week’s 130 percent of pre-Covid levels.

The institution said additionally, that following the recent the “Law to Combat Crimes of Illegal Gambling”, it believed “regulatory overhang” in terms of consumer sentiment about a crackdown on unlicensed money changing in and around Macau casinos, was now “removed”.

“As we argued in prior reports and highlighted by casino operators…we viewed the actual GGR impact,” in relation to money changing was “likely to be rather limited since the policy only targets illegal POS [point-of-sale] machines brought across the border [from the Chinese mainland] and the pawn/jewellery shops are allowed to remain in operation,” the Goldman Sachs analysts wrote.

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