Gaming | GGR acceleration expected from March: JP Morgan

The city’s gross gaming revenue (GGR) for the first 14 days of March is expected to reach MOP3.7 billion, with its run rate in the second week estimated at MOP271 million a day, “somewhat better” than the MOP257 million per day and MOP220 million per day for the first week of March and the preceding week respectively, according to JP Morgan.
The brokerage released a statement on March 15 ascribing the GGR advancement to the “gradual improving travel sentiments in China” and “a come-back of local gaming demand after a recent easing of [the] Covid-testing rule.”
The city’s month-to-date GGR has picked up to 30% of levels of March 2019, which are considered as pre-Covid-19 levels, with mass and VIP figures sitting at around 40% and 20%, analysts DS Kim and Derek Choi stated.
In terms of GGR prognosis, the analysts anticipate it to keep advancing “sequentially” from March (MOP260 million-270 million/day) into May (MOP350 million-370 million/day).
“The pace of recovery should step up sharply from the next big holiday (May Golden Week) in our view, and further accelerate into [the second half] with more re-opening and potential travel easing,” they added.
The potential relaxed travel regulations, the analyst mentioned, include the relaxation of cross-province travel restrictions, the reopening of the Hong Kong border, the normalization of e-visas and package tours, and more.
“We forecast mass GGR to recover to 70-75% or 85-90% of pre-COVID levels in [Q3] or [Q4], before hitting 100% by 2022,” the statement said.
Since March 3, the mandatory Covid-19 test requirement to enter casinos has been scrapped by the SAR government. This means that all residents can now enter casinos freely without the need to display the certificate of a negative Covid-19 test result.
In February, Macau generated a GGR of MOP7.31 billion, representing a sharp surge of 135.6% year-on-year, yet down 8.9% month-to-month.
The month-on-month decline is mostly attributed to the weaker tourism performance during the Chinese New Year holiday, as municipal governments in China issued travel advisories to impel residents to avoid unnecessary travel during the holiday.