November Starts Slowly for Macau’s Casinos as GGR Gains Little Ground

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Macau daily casino gross gambling revenue (GGR), for the first week in November, was up 12% week-on-week. This was supported by significant recovery of visitor volume to the city. However, GGR was still “lighter than expected,” according to brokerage Sanford C. Bernstein Ltd on Monday.

According to the firm, the average daily rate from November 1 through 7 inclusive was MOP235 million (US$29.3 million), compared to MOP209 million ($26 million) the week before. The run rate over the past week is 69% lower than in November 2019, but 67% higher than October

Macau GGR Still Struggling to Normalize

Bernstein stated that since October 19, following an earlier COVID-19 alert in Macau, daily border movements into and out of Macau have risen to over 50,000 per day. This is “not far from May peak” of 57,000 daily movements.

Analysts Vitaly Umansky, Louis Li and Kelsey Zhu stated, “Given China’s Covid outbreak is continuing and has spread to 20 (of total 34) provinces, visitation to Macau seems reasonably solid, but average visitor spend seems low.”

According to the Bernstein team, channel checks showed that VIP play average daily volumes rose approximately 75%-80% month-on-month in November’s first week. However, hold was “below normal,” negatively impacting GGR.

The brokerage mentioned that authorities in Hong Kong were in talks with mainland authorities with the hope of easing travel conditions in December. This could be followed by a possible “larger scale” easement in February.

Other Analysts Concur

JP Morgan Securities Asia Pacific Ltd released a Monday note indicating that the daily rate for November started at $29.3 million.

DS Kim, Amanda Cheng and Livy Lyu asserted, “While this itself isn’t a very pleasing print, it is not too bad either considering the recent Covid flare-ups in multiple provinces” of mainland China.

JP Morgan noted similar talks to Sanford Bernstein and placed the annual Macau mass GGR contribution to Hong Kong visitors in pre-pandemic times at “15% to 20%.”

The drop comes in spite of an increase in visitation. As border restrictions between Macau and Zhuhai in mainland China are eased, the number of daily arrivals and departures is increasing. The latest figures, according to Inside Asian Gaming, reflect a combined total of 50,000 a day, which is approaching May’s peak of 57,000.

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