The growth of gaming revenue continued to be lackluster in July, falling short of analysts’ projections despite the popular summer travel season.
This could signal rising concerns among gamblers over China’s crackdown on the gambling hub.
According to data published by the Gaming Inspection and Coordination Bureau yesterday, gross gaming revenue (GGR) increased by 12% to MOP18.6 billion for the month.
This figure is below the median analyst forecast of a 14% year-on-year rise and represents 76% of the gaming revenue levels seen prior to the pandemic in 2019.
This trend indicates that Beijing’s efforts to curb illegal money exchange and cross-border gambling have negatively impacted player sentiment.
According to a recent study by Citibank, despite concerns over Beijing’s intensified efforts to curb illicit cross-border capital flows, Macau’s premium mass gaming segment has continued to demonstrate remarkable resilience.
Analysts George Choi and Ryan Cheung noted the number of premium mass players increased 61% year-on-year to 575 individuals, while total wagers surged 34% to reach HKD12.2 million.
“Our July 2024 table survey suggests that concerns by some investors about a crackdown on illegal cross-border fund flows and its negative impact on Macau’s GGR are likely overstated,” the analysts stated in their report.
In June, revenue from casinos amounted to MOP17.69 billion in June, the lowest monthly total since November of last year.
Since June, Beijing and state-owned media have highlighted a series of arrests involving illegal money exchange and loan sharks, along with cross-border gambling. These actions by the Chinese government have likely contributed to the decline in visitor arrivals.
That same month, Macau reported 2.55 million visitor arrivals, which was about 82% of the pre-pandemic level. The city is expected to release data for July later this month, but industry analysts anticipate the numbers will show a continued slowdown.
This trend is partly due to China’s easing of international travel restrictions and visa regulations, which have encouraged mainland Chinese tourists – Macau’s dominant visitor group – to travel overseas instead.
The economic slowdown in China has also weakened tourist spending in Macau, with travelers cutting back on luxury shopping in favor of more budget-friendly eating and drinking options.
Brokerage CLSA Ltd has revised its forecast for gaming revenues and earnings before interest, taxation, depreciation and amortization (EBITDA) for 2024 and 2025, lowering projections in 2024 to MOP232.7 billion, a 27% year-on-year increase, and expects 3.9% growth to MOP241.7 billion in 2025.
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