Analysts show cautious optimism for August casino revenues

Analysts expressed cautious optimism for August’s gross gaming revenues (GGR) after July’s figures fell short of expectations.

The casino industry experienced a disappointing month in July, with gross gaming revenue (GGR) failing to meet market expectations, according to analysts.

The local Gaming Inspection and Coordination Bureau reported a GGR of nearly MOP18.6 billion (approximately USD2.31 billion), reflecting a modest 5.1% increase from June but significantly below historical performance levels.

For August, Deutsche Bank forecasts GGR to reach nearly USD2.4 billion (MOP19.1 billion), reflecting a 3% increase in daily revenue compared to July.

Seaport Research Partners is slightly more optimistic, projecting GGR could hit approximately USD2.47 billion (MOP19.6 billion), a 6.7% rise from July and over 15% higher than August 2023.

The analysts said the August calendar appears more favorable, featuring five weekends that could enhance visitation and spending.

Umansky said any increase in tourism, particularly from package tours, would be beneficial, as current visitation levels remain at about 25% of pre-
Covid figures.

“August may be a test of the strength of the recovery,” he said, as the market seeks to stabilize after two months of weaker-than-expected performance.

Investment analysts, including Carlo Santarelli from Deutsche Bank Securities, characterized July revenue figures as “weak.”

In a memo released last week, Santarelli said the daily GGR increase of 1.7% compared to June was 310 basis points below the average July uplift of 4.8% observed from 2013 to 2019.

Vitaly Umansky of Seaport Research Partners echoed this sentiment, saying month-on-month growth fell short of the typical range of 9% to 10%.

“July started weak and ended weak, with solid mid-month performance,” Umansky said, highlighting the inconsistent revenue flow throughout the month.

The analysts attributed the underwhelming performance to several factors, including a nationwide crackdown on money changers in both Macau and mainland China, which has impacted money movement and visitation.

While July’s GGR figures fell below expectations, analysts remain hopeful August will bring a rebound, driven by improved visitation and spending patterns. Nadia Shaw