Macau’s GGR Drops in August, but Recovery Could Be Coming

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As Macau continues to struggle with its COVID-19 recovery, the numbers are much lower than previously expected. New bouts of the coronavirus, including through the Delta variant, are hurting efforts to rebound and August didn’t bring much relief. According to analysts, September won’t be any better, either, but October could finally result in a welcome uptick in performance.

Macau GGR Continues to Disappoint

The latest figures from Macau’s gaming regulator, the Gaming Inspection and Coordination Bureau (DICJ, for its Portuguese acronym), show that August produced gross gaming revenue (GGR) of $554 million for the city. While that may be good for some locations, it is far below what Macau was used to prior to the COVID-19 pandemic and is also a 47.4% drop from what was seen just a month earlier. However, it’s much better – 234% better – than the $166 million Macau reported in August of last year.

The August results are also the second-lowest recorded over the past 12 months. In September of last year, the DICJ stated that revenue was just $276 million for the month. From January to August of this year, Macau saw GGR of $7.72 billion, representing a 70.1% jump over the same period in 2020. Compared to the first eight months of 2019, though, the figure is way off. The entire year produced GGR of $36.66 billion.

Help Coming, but Not Soon Enough

The slow August was a result of ongoing COVID-19 issues in mainland China that will spill over into September. Travel restrictions have been eased; however, some requirements are still in place. These will continue to hinder Macau’s recovery until regional stabilization occurs. According to analysts with JP Morgan, that won’t happen this month, but could be seen in October.

DS Kim, Amanda Cheng and Livy Lyu, JP Morgan’s regional analysts, write in a new update on Macau, “While one week doesn’t make a trend, a near instant recovery post border normalization bodes well for upcoming high season in 4Q, including the October Golden Week. September is unlikely to be upbeat given seasonality, but we’re hopeful to see GGR back on solid recovery path in October, which we expect to print a post-pandemic high of ~MOP$350 million ($43.8 million) per day versus May’s MOP$337 million ($42 million) per day.”

Analysts with the Bernstein brokerage agree, predicting a 70% month-on-month gain this month, followed by a more significant gain in October. Visitors arriving in Macau must now show a negative COVID-19 test within seven days of their arrival, instead of the 48-hour period that has been in place. This will help facilitate some rebound in the city, although at a slow pace. Travel restrictions from 13 cities in seven mainland China provinces are still in force, which will impact the numbers.

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