Report | July gaming revenue may close above austerity level

Citigroup has stated that Gross Gaming Revenue (GGR) reached around MOP14.9 billion during the first twenty-six days of July, according to information provided by the industry. “To reflect the recent trend, the GGR forecast for July has been cut from MOP19 billion to MOP18.5 billion, down 35% yearly, but up 7% monthly, indicating that the average Daily GGR will be around MOP580 million for the rest of the month,” Citigroup mentioned in a report.
If confirmed at 18.5 billion, July’s GGR will be slightly above the “austerity”-triggering level of 18.35 billion announced by Secretary Lionel Leong. Last week, the Secretary for Economy and Finance said to reporters that, “if revenue doesn’t reach 18.355 billion patacas, we will have to launch austerity measures.”
As for market share (quoted from industry information), Sands China holds the top spot at 23.8%, followed by Galaxy (23.1%), SJM (20.1%), Melco Crown (14.3%), MGM China (9.5%), and Wynn Macau (9.2%). According to the Citigroup report, Sands saw the biggest gain in market share in comparison with results from the June period.
Meanwhile, Deutsche Bank (DB) noted that Macau stocks have rallied 15% since the relax-
ation of the transit visa rules on July 1 in the hope of improving GGR. However, July MTD GGR/day was only MOP596m (still -35% y-o-y), merely 3% above the seasonally-weak June.
The research house expressed its fears that Macau is losing its appeal to visitors: June marked the fourth month of falling visitation (total -8% y-o-y; Chinese -10% y-o-y).
It added that the recent Chinese stock market crash would likely hurt VIP and premium-mass demand. Historically, there is a high correlation (70%) between the fall in Macau’s GGR and the fall in Shanghai A-shares six months earlier. After the recent rally, DB sees “more downside risks.”
Nomura analysts agree: “The tech, internet, property and logistics sectors will likely grow [in China]. Macau gaming will remain weak.” PC

Chui: local finances are ‘stable’

Chui Sai On said yesterday that the if austerity measures are implemented the livelihood of the residents won’t be affected. Replying to journalists, the chief executive pointed out that local finances are “stable” and the financial reserve is sufficient to face “unexpected incidents” that may result from economic instability.