Macau casino revenue down nearly 9% in August, below expectations

Macau casino revenue last month dipped for a second consecutive month as the world's biggest gaming hub faced headwinds from protests in Hong Kong and regulatory uncertainty over high-roller junkets.

Gross gaming revenue for Macau casino operators was 24.3 billion patacas (USD 3 billion) last month, down 8.6 percent from a year earlier, according to data from the Gaming Inspection and Coordination Bureau. That missed the median analyst estimate of a 4 percent fall, following a drop in July.

However, actual gross gaming revenue did not fare quite as poorly as the growth indicators would suggest. In month-to-month terms, August represented a slowdown of less than 1% compared with July, while it stood about 4.3% lower than gross gaming revenue in February, six months earlier.

The latest numbers further illustrate the turbulence in the Macau gaming sector this year due to a myriad of negative factors. Of the first eight months of this year, gaming revenue expanded for four months and contracted for four months, failing to sustain momentum either way.

Macau casinos are not entirely immune to the Sino-US trade war and a Chinese economy that has slowed to the weakest pace in three decades. Well-heeled gamblers have been affected by the sluggish economy and more are staying away from baccarat tables, cutting short over two years of sustained gaming revenue growth at the start of the year.

High-rollers are also cautious after a series of moves to clamp down on phone and online gaming in the past month by the Chinese government. The ongoing protests in Hong Kong have disrupted transportation and visa applications for Chinese visitors to Hong Kong and Macau. Weekend jaunts to Macau have also likely dropped due to people staying home as protests rage on in the streets of Hong Kong.

“There is plenty to blame for the miss, such as social unrest in Hong Kong, tough year-on-year comparison, negative headlines around junkets, and macro headwinds,” said DS Kim, an analyst at JP Morgan in Hong Kong, according to Reuters.

Macau visit arrivals slowed in July, the most recently available figures, growing 16% to 3.5 million during a prime summer holiday month. That’s down from 20% growth for the first six months of the year. The crucial overnight segment, comprising 48.5% of total visitors, grew 4.7% after first half growth of 8.2%. Overnight visitors have fallen as a proportion of the total since the opening of the Hong Kong-Zhuhai-Macau Bridge last October spurred a flood of mainland bridge tourists who don’t spend much but add to congestion.

Market Performance Casino stocks have been volatile over the past few months. In May, the Bloomberg Intelligence index of Macau operators dropped 20 per cent, before recovering some gains in June and July. Shares in Hong Kong-listed companies Sands China, Wynn Macau, SJM Holdings and MGM China fell early on Monday between 1.5% and 2.7%, underperforming the benchmark Hang Seng Index which was down 0.4%.