Macau casinos post year-best revenue figures 

By Ethan Anderson Updated
Macau showing signs of improvement with GGR spike

Macau casinos posted a gross gaming revenue growth of 24.3 per cent in May, compared to April.

GGR Asia reports that year-on-year, the gross gaming figure was up a whopping 492.2 per cent, due to the closure of casinos last April due to the coronavirus pandemic.

Aggregate casino gross gaming revenue figures in the five months to May 31 showed a 28.7 per cent increase on the first five months of 2020.

In the first quarter of 2020, the city’s casino sector had a strong performance in January, before the onset of the pandemic.

Macau’s casino gross gaming revenue for May 2021 was the highest monthly figure since the start of the pandemic.

The result coincided with a five-day holiday period in mainland China, linked to Labour Day on May 1.

JP Morgan Securities Asia Pacific described Macau’s May gross gaming revenue as a “respectable print…modestly above consensus”.

Analysts DS Kim, Derek Choi and Livy Lyu stated: “The daily run-rate has risen sequentially for six consecutive months to the highest post-pandemic print in the first quarter 2021.”

The analysts added the May result implied “mass GGR has recovered to more than 50 per cent of pre-COVID-19 levels, nearly a 10 per cent jump from recent months.”

The official figures for market split between mass and VIP play will only be detailed by the regulator on a quarterly basis, once the June figures are published.

The Morgan Stanley banking group recently cut by 19 per cent its estimate for Macau’s market casino GGR this year.

The institution said its downward revision was due to “continued delay” in easing of travel rules relating to movement between Hong Kong and Macau and between mainland China and those places.

The banking group now thinks Macau’s 2021 GGR will be up 115.4 per cent year-on-year compared to 2020.

Several industry figures have said they think that newly reported COVID-19 cases in mainland China, including some in the Guangdong province neighbouring Macau, are likely to cloud, in the near-term, the enthusiasm of mainland residents to come to Macau as tourists and might also delay steps to ease travel restrictions between the two places.

Full Macau recovery not expected until at least early 2023

In a recently published report, research firm Moody’s noted that while the Macau economy was the worst hit by the coronavirus globally, the casino hub maintains strong sovereign finances.

Moody’s has an Aa3 rating, with a “stable” outlook on Macau’s credit grade.

“The Aa3 rating reflects a balance between inherent credit constraints and strengths. The growth volatility of Macau’s economy is among the highest of all rated sovereigns,” said the credit evaluator.

“While efforts to diversify growth away from the gaming industry have been ongoing since 2015-16, Moody’s does not expect them to yield material results over the near-term.”

“But despite the highly volatile nature of economic growth, Macau’s vast fiscal and external reserve, significantly stronger than those of similarly rated peers, and very high per capita incomes continue to support its credit profile.”

Entering 2021, Macau was widely viewed by analysts as poised for a more rapid rebound from the pandemic than rival gaming markets, including Las Vegas.

However a series of fits and starts and head fakes prompted investors to grow frustrated with the pace of its recovery.

As a result, analysts expect Macau’s gaming economy won’t flirt with pre-pandemic levels until 2022, with a more earnest recovery developing in 2023.

“Under Moody’s assumptions, a full recovery in tourist arrivals and gaming revenues will not occur until early 2023,” the ratings agency said.

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