Mid-month channel checks indicate that pressure on Macau’s gambling sector will persist this December, with the data supporting predictions of a double-digit drop in gross gaming revenue (GGR).
Fears that Chinese President Xi Jinping’s visit would hit the VIP and mass streams hard this month have been realized.
Gaming analysts said this week that the average daily rate over the first 15 days of the month has fallen to 720 million patacas, or 16% less than a year earlier. That marks a slight improvement over the year-on-year comparison for the first eight days of December, which sat 19% lower than in 2018.
Still, Xi Jinping’s visit, which will extend until the anniversary of the handover on December 20, has analysts warning of “underperformance” in the gaming sector.
The President’s last visit in 2014 coincided with an anti-corruption crackdown, which was interpreted by China’s wealthy and powerful as a warning to rein in lavish spending and gambling. Today’s visit is thought to similarly deter high-roller visitation, while tighter exit controls amid heightened security protocols will dampen mass market visitor arrivals.
The double deterrent puts December on track to be the worst month of the year in both growth and absolute terms.
December was the
third-highest monthly earner in 2018, recording city-wide revenue of 26.46 billion patacas and year-on-year growth of 16.6%. Even a moderate result for this month will fare poorly in year-on-year terms, given last year’s strong comparison base.
Meanwhile, year-to-date gross gaming revenue up to November sits 2.4% lower than in the equivalent period last year.
The silver lining is a measure of pent-up demand ready to be unleashed after the President departs the special administrative region. Whether that translates into December gross gaming revenue or January remains to be seen.
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