JP Morgan: Macau GGR likely to go down 8 per cent

JP Morgan revealed that casino gross gaming revenue (GGR) in Macau is likely to decrease 8% in the fourth quarter.

Macau.- Macau GGR is likely to shrink by 8% year-on-year in the fourth quarter; driven by an anticipated 26% decline in VIP, mitigated by a 6% to 7% expansion of mass-play revenue, said a Tuesday report from brokerage JP Morgan Securities (Asia-Pacific) Ltd.

In the third quarter this year, VIP baccarat revenue as a proportion of all casino GGR stood at 43.9%, according to market-structure data by the Macau government. In the second quarter, it had been 47.2%. Macau VIP baccarat GGR fell by 22.5% in the third quarter according to the data released last week.

JP Morgan said in its latest take on Macau – a lookahead on third-quarter earnings and an overview of the fourth quarter and beyond – that there had been “signs of VIP stabilisation” since September this year.

The “confidence” of VIP agents and VIP players “seems to be improving when looking at key metrics at major junkets”. Nonetheless, JP Morgan expected “GGR momentum to get worse before getting better” in Macau.

Last week, Sanford C. Bernstein Ltd, said casino gross gaming revenue (GGR) for October would likely drop between 3% and 6% judged year-on-year.

A number of commentators has speculated that President Xi Jinping will visit Macau in December to mark the 20th anniversary of Macau’s handover from Portuguese administration to Chinese, although no announcement has been made on the topic.

Observers have noted that any visits by China’s government officials tend to depress casino play and decrease the number of visitors from mainland.