JP Morgan predicts GGR decrease for June following surge in May

Macau is on course for an expected gross gaming revenue (GGR) pull-back this month after “a record high mass GGR” in May, analysts at JP Morgan Securities Asia Pacific predicted.

Last month’s mass-market gross gaming revenue (GGR) recovered to around 115% of pre-pandemic levels, according to the institution’s estimates.

“Not only was it better than the (already elevated) consensus of MOP19.5-20B, the month also saw the best GGR in more than 50 months, as well as the highest mass GGR in Macau’s history,” said analysts DS Kim, Mufan Shi, and Selina Li, as cited in a GGRAsia report.

Macau’s overall May GGR was nearly MOP20.19 billion, up 8.9% on April’s circa MOP18.55 billion, according to official data. This was the best monthly performance since January 2020, when the city’s GGR stood at MOP22.13 billion.

“The continued strength in GGR growth remains clear,” said analyst Vitaly Umansky of Seaport Research Partners. However, he cautioned that “base mass recovery remains subdued… offset partially by strong premium mass.”

Looking ahead, JP Morgan analysts forecast a pullback in June, predicting monthly GGR to reach MOP18 billion, or MOP600 million per day. Deutsche Bank Securities Inc expects a sequential per day decline of 9.0 percent for the month.

“Weather often plays a role in June results as typhoon season has already begun,” noted Umansky. “Any major weather event in the region could have a negative impact on revenue and visitation during the summer months.”

Overall, Macau’s second quarter GGR could reach US$7.07 billion, an increase of 24 percent year-on-year, but still down by 23 percent versus the same period in 2019, according to Deutsche Bank Securities.