Macau’s GGR influenced by politics. According to a memo released on Monday by Goldman Sachs (Asia) LLC, Macau’s casino gross gaming revenue (GGR) has experienced seasonal softening since October Golden Week and may do so for the rest of this year. At around MOP20.79 billion (US$2.60 billion), last month’s GGR was the highest since January 2020. This includes that significant holiday for mainland Chinese customers, Macau’s primary feeder market.
Per the banking institution, a number of political events planned for December could have an impact on the city’s GGR.
An important milestone for Macau since its transfer from Portuguese to Chinese governance was mentioned in the memo by analysts Simon Cheung, Alpha Wang, Leah Pan, and Dorothy Wong: “Investors will likely pay attention to whether President Xi [Jinping] will confirm a visit to Macau for the 25th anniversary of Macau’s return to the motherland.” December 20th is the anniversary.
The experts also noted that Sam Hou Fai, the first post-handover leader of Macau to be born on the mainland, is set to be sworn in as the city’s new chief executive on the same day.
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Regarding such events and anniversaries, “past experience would suggest a temporary GGR impact from late November.” The possibility that certain players will postpone their visits to Macau has been brought up by analysts in respect to past visits by China’s leadership.
“Whether President Xi may introduce other policies to support Macau (e.g., more IVS [individual visit scheme] cities, [and] less friction for commuting between Macau and Hengqin),” the bank’s analysts noted, was one possible political advantage for Macau. The latter was a reference to a portion of mainland property adjacent to Macau that is being marketed as a major gateway for mainland tourists in the future.
Following October Golden Week, Goldman Sachs said that Macau’s daily casino GGR had “decelerated” to between MOP560 million (US$69.9 million) and MOP630 million each day, or “flattish” year-over-year.
According to Goldman Sachs, daily GGR during the holiday season reached MOP1.1 billion, a 30% increase from the previous year.
Mass-market GGR had decreased after the vacation, although it was still between 110 and 120 percent of pre-Covid levels, as opposed to 130 percent during October Golden Week.
The organization added that it thought the “regulatory overhang” over consumer perception regarding a crackdown on unauthorized money changing in and around Macau casinos had been “removed” with the recent publishing of the “Law to Combat Crimes of Illegal Gambling.”
The Goldman Sachs analysts wrote that the policy only targets illegal POS [point-of-sale] machines brought across the border [from the Chinese mainland], and the pawn/jewelry shops are allowed to remain in operation. As we argued in previous reports and highlighted by casino operators, we viewed the actual GGR impact in relation to money changing as “likely to be rather limited.”
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