Gaming revenue tumbles 8.6% in fastest decline of 2019

Gross gaming revenue tumbled 8.6% year-on-year in August to 24.26 billion patacas ($3 billion), according to official data released yesterday, owing partly to a difficult comparison base for the month last year.

Of the first eight months of 2019, gaming revenue has expanded in year-on-year terms for three months and contracted for five months, failing to sustain momentum either way.

According to the data released by Macau’s Gaming Inspection and Coordination Bureau, August saw the sharpest decline so far this year, surpassing the 8.3% contraction in April. The contraction was far worse than analysts had forecast only a week earlier, when the median estimate was a 4% fall.

However, actual gross gaming revenue did not fare quite as poorly as the growth indicators would suggest. In month-to-
month terms, August represented a slowdown of less than 1% compared with July, while it stood about 4.3% lower than gross gaming revenue in February, six months earlier.

Cumulative gross gaming revenue reached about MOP198 billion as of the end of August, about 1.9% lower than the MOP202 billion recorded in the equivalent period of 2018. Gross gaming revenue for the whole of 2018 amounted to about MOP300 billion.

The results seem to suggest that Macau’s gambling sector continues to resist major headwinds from a slowing Chinese economy and the ongoing China-U.S. trade war. With Macau’s economy reliant on mainland tourism and its currency indirectly pegged to the U.S. dollar, the special administrative region is particularly vulnerable to shocks to the world’s two largest economies.

The sector is also thought to have been unscathed by the ongoing protests and travel disruptions in nearby Hong Kong, as well as regulatory uncertainty over high-roller junkets, which faced increased scrutiny from Beijing and Macau over the summer.

Bloomberg analysis suggested that high-roller gamblers have been more cautious to travel to Macau as a result of the poor economic climate. Well-heeled gamblers have been affected by the sluggish Chinese economy and more high-rollers are staying away from baccarat tables, Bloomberg reported, cutting short over two years of sustained gaming revenue growth at the start of the year.

Casino stocks have been volatile over the past few months. In May, the Bloomberg Intelligence index of Macau operators dropped 20%, before recovering some gains in June and July.