Several investment analysts predict Macau’s gross gaming sales (GGR) could fall 21% year-on-year in October, when official figures are released. The figures are due to be released on Tuesday, following a civil service holiday on Monday.
If the forecast for October’s GGR is accurate, it represents the biggest monthly decline since the Macau government began publishing GGR data in its current form in 2005.
“There is a risk to the October mass market growth consensus of 10%,” Wells Fargo Securities LLC in New York said in an Oct. 31 memo. This was a reference to the fact that the expansion of mass market play until recently made up for some of the declines in the high roller sector.
A note from the Cameron McKnight-led Wells Fargo analysts read: “In particular, our checks suggest low single-digit popular market growth potential.”
The Wells Fargo team added that it was forecasting a 21% year-over-year decline in GGR in October, driven by a 34% drop in VIPs and 5% year-over-year growth in the public market.
The October GGR is expected to fall 21% year-on-year to $28.9 billion ($3.6 billion), assuming average daily revenue of $850 million for the remainder of the month, according to a memo released on Oct. 27 by Kenneth Fong and Isis Wong of Credit Suisse AG in Hong Kong.
Macao’s U.N. economy and finance minister Francis Tambac warned on Oct. 23 that casino GGR was expected to decline further from a year earlier than in September, when it fell 11.7%.
Information publicly obtained by the Macau government showed that the previous biggest year-on-year declines in monthly sales were in January 2009 and June 2009, down 17.1% in both cases.
The next biggest drop was in February 2009, down 15.5% year-over-year. In such cases, analysts generally cited weakness caused by global macroeconomic factors related to the global financial crisis that began in late 2008. This time, it appears to be more closely related to domestic politics in mainland China. 슬롯사이트
Wells Fargo said in a note: “We continue to see balanced risk/reward over the next six months as we believe China policy settings are having a particularly negative impact on growth: (1) visa restrictions, (2) anti-corruption drives, (3) credit declines, and (4) housing market weakness.”
Chinese high rollers, in particular, appear to have avoided the city’s game table due to a crackdown on notable spending and corruption on the mainland, but other gaming jurisdictions still appear to be spending enthusiastically.
NagaCorp Ltd, the operator of the Nagaworld Casino Resort located in Phnom Penh, Cambodia, reported a 24% increase in third-quarter gross profit.