Macau Gaming Preview: June Revenue to Show Another Deep Plunge

(Bloomberg) -- Macau casinos’ June gaming revenue is expected to plunge by more than 90% for the third straight month, as China’s border curbs imposed during the coronavirus outbreak continue to hurt the world’s largest gambling hub. The monthly data will be reported on July 1, according to the Gaming Inspection & Coordination Bureau website.

Estimates

• Gross gaming revenue, or GGR, in June is estimated to plunge by a median 95% y/y, according to a Bloomberg survey of seven analysts. Forecasts ranged from -80% to -96%
• July GGR is forecast to drop 80% y/y, according to estimates by six analysts ranging from -33% to -95%
• Full year 2020 GGR is seen falling 46% y/y, according to estimates by seven analysts ranging from -38% to -65%
  • Annual VIP revenue is estimated to decline 50% and mass revenue to decrease 48% in 2020
• NOTE: May data, Macau Gaming Revenue Falls 93% in May as Borders Stay Tight

What to Watch

Sanford C Bernstein (Vitaly Umansky)

• Macau continues to be impacted by the travel curbs and border restrictions. While there have been some minor relaxations, restrictions on visitation are still largely in place. The outbreak in Beijing may delay the opening of the borders
• June is most likely to see a revenue decline similar to April and May (down mid-90s%) and if border restrictions remain for all of July, it’ll also show a similar outcome
• Easing of travel curbs will determine when GGR begins to pick up and at what pace. Current forecast is for a 44% decline in 2020 GGR y/y followed by a rebound of over 96% in 2021

Citi (George Choi)

• The GGR volatility in June was mainly due to the low gaming volumes generated by a small pool of players
• Low GGR trends to likely continue until the mainland Chinese government lifts the outbound travel restrictions and the mainland Chinese, Hong Kong and Macau governments lift the quarantine rules
• Hopeful that GGR decline will narrow from 3Q this year, assuming the travel restrictions are lifted in the next few weeks

Jefferies (Andrew Lee)

• Expects selective and gradual reopening of borders
• This would be in line with recent small steps toward border easing with selective groups exempt from compulsory quarantine such as workers and students traveling between Zhuhai-Macau and directors of listed companies on Hong Kong Stock Exchange between China-Hong Kong

Bloomberg Data

• YTD share price performance: SJM Holdings -3.7%, Galaxy Entertainment -11.5%, MGM China -26.1%, Sands China -27.5%, Wynn Macau -32.3%, Melco -37.3%

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