Gaming revenues to decline 35 per cent this month

By
Joanne Kuai

Equity security research agency Sterne Agee CRT has updated its forecast of the July gross gaming revenues of the city predicting now a 33 to 36 per cent decrease. This compares to the previous predictions of 30 to 34 per cent drop in year-on-year terms.
Analyst David Bain wrote in his report that according to their channel checks, Macau table-only gross gaming revenue was MOP14.86 billion (US$1.87 billion) from July 1 to July 26. Including slot assumptions, the July gross gaming revenues run rate indicates a 35 per cent year-on-year monthly decline and a total of MOP18.4 billion for the whole month.
In addition, the analyst pointed out that July gaming revenues are typically 9 per cent higher than in June, which suggests MOP18.9 billion or a 33 per cent year-on-year gross gaming revenue negative growth result.
Sterne Agee CRT also expects that if the July gaming market drops 35 per cent, it would mark the fifth consecutive month of “less bad” year-on-year growth results, a trend that they expect to continue through the remainder of the year.
“Wake-up call”
The Secretary for Economy and Finance, Lionel Leong Vai Tac, has estimated that July gaming revenue may come in below MOP18 billion, in which case the Macau Government would consider introducing austerity measures to control spending as early as next month.
However, Sterne Agee CRT sees this piece of news as potentially positive for Macau’s gaming operators. They said that the public acknowledgement of potential austerity measures may be beneficial for future policy decisions impacting GGR.
‘In essence, discussions could act as a ‘wake-up call’ for policymakers of key gaming topics, including stronger smoking restrictions and table allocations for new property openings,’ the Monday report reads.
Macau’s aggregate gross gaming revenue for the first half of this year stands 37 per cent lower than in the same period of 2014, at about MOP121.65 billion. Casino revenue has fallen for 13 consecutive months year-on-year.