Analysts trim gaming forecast as weekly revenue softens on low win rates

The gaming sector saw a slight week-on-week slowdown in daily gross gaming revenue (GGR) in early April, with analysts attributing the softness mainly to unusually low win rates, according to recent brokerage reports.

Investment banks estimate that average daily GGR for the week from April 6 to 12 fell about 3% week-on-week to MOP663 million.

The decline was largely driven by weaker-than-normal luck factor outcomes in the VIP segment, which weighed on overall performance despite steady visitor activity.

Citing industry data, Citigroup noted that Macau generated about MOP7.95 billion in GGR in the first 12 days of April.

This implies that daily revenue for April 8 to 12 averaged around MOP630 million, roughly 8% lower than the first seven days of the month. Analysts, however, described overall performance as “broadly stable” given underlying demand conditions.

Meanwhile, the sector is expected to receive some support from entertainment events and holiday-related demand. Upcoming concerts by international artists, along with major entertainment awards at Galaxy Arena, are expected to help offset potential softness ahead of the May Day Golden Week.

Based on current trends, Citigroup revised its April GGR forecast slightly downward to around MOP20.5 billion, from a previous estimate of MOP21 billion.

It now expects daily revenue for the remainder of the month to average around MOP697 million.

Investment bank Macquarie maintained a similar outlook, projecting April GGR in the range of MOP20.2 billion to MOP21.1 billion, representing year-on-year growth of 7% to 12%. It estimated that daily revenue in the remaining days of the month could recover to between MOP680 million and MOP730 million.

However, analysts warned that growth momentum is expected to moderate in the second quarter.

They forecast gaming revenue growth to slow from 15% in the first quarter to about 5.5%, citing a higher comparison base from May onwards.

Still, full-year GGR projections remain unchanged at around MOP262 billion, representing an annual increase of about 6%.