Macau showing signs of returning to normal

Macau’s gross gaming revenue year-on-year for the month of September has fallen 90 per cent, but the market is showing strong gains, compared to last month.

GGR Asia reports Macau’s year-on-year gross gaming revenue fell by US$220 million, according to data released from the city’s Gaming Inspection and Coordination Bureau.

The latest monthly tally was up 66.2 per cent from what was achieved in August.

Thursday’s data means the prior-year period data for the first nine months of 2020 is down 82.5 per cent compared to the same period in 2019.

Brokerage Sanford C. Bernstein said in a note issued after the data was released that the year-on-year performance has been “weaker than expected”, negatively affected by a “soft ramp” in terms of growth of visitor volume to Macau and “concerns over money flows” to the city’s gambling market.

September saw “weaker than expected” visitor volume from neighbouring Guangdong province, “on the back of visa restart in late August”.

The institution identified other negative factors being “weakness in VIP, and hold” on the part of the casino operators, said its analysts.

Starting from August 26, as part of travel easing measures following the coronavirus pandemic, eligible residents from the neighbouring mainland province of Guangdong have been allowed to apply for an exit visa for tourist trips to Macau, either as part of a tour group or under China’s Individual Visit Scheme programme.

Such a measure was therefore in place for the whole of the September-GGR reporting period.

From August 12, residents of Zhuhai, immediately next door to Macau, had been able to apply for tourism permits.

Since September 23, these have been open for the entire mainland.

Sanford Bernstein had said in a September 21 note that since Zhuhai and Guangdong tourism visa issuance resumed on August 12 and 26, the average daily number of visitors to Macau had climbed to above 17,000, from 5,000 in early August and fewer than 1,000 in June.

Past research has indicated many IVS permit holders stay overnight in Macau.

Prior to the pandemic, a high level of Macau hotel occupancy was often seen as a positive indicator for the levels of gambling in the territory.

Macau’s casino tax revenue on the up

Macau’s casino may have turned a corner, with a 52.4 per cent increase in tax revenue reported by the Financial Services Bureau in Macau for August. 

Calvin Ayre reported in September that the figure, $76.8 million, was a marked increase from a month earlier.

Despite the substantial monthly increase, Macau is still a long way off from its normal revenue levels.

The gross gaming revenue reported by the casinos remains flat and is down 94.5 per cent year-on-year.

The total GGR for the city’s casinos was $166.38 million, an indication that the relaxation of border restrictions has not had a huge impact on visitation to Macau’s casinos.

At the end of August, the cumulative total GGR for casinos in Macau had only reached $4.552 billion, an 81.6 per cent decrease compared to the same period last year.

As a result, Macau was only able to receive about $2.85 billion in tax revenue from its gaming properties.

This is only 29.8 per cent of what it had received over the first eight months of last year, and is obviously impacting previous budget forecasts.

Macau had anticipated taking in about $520 million each month in gaming tax revenue and, with only four months left in the year, there’s no chance it will be able to recover all the losses.

The actual figures represent just 45.6 per cent of the forecasted take for the year and Macau has had to revise its end-of-year projections to reflect the shortfall.

Now, Macau believes it will receive a total of around $6.252 billion in gaming tax revenue by the time 2020 wraps up.