Macau GGR for January might perform better than expected, analysts say
Brokerage Morgan Stanley has revised its predictions for Macau’s daily average gross gaming revenue for January.
Macau.- Morgan Stanley has predicted that Macau’s daily average gross gaming revenue (GGR) for January might perform better than expected and increased its forecast from MOP200m (US$24.8m) to MOP250m (US$31m) arguing that recent minimum bets placed in local casinos were higher than expectations.
Based on the adjusted GGR estimate, the increase from month-to-month stands at 123 per cent, representing 31 per cent of January 2019’s level, with 85 per cent being mass market.
Analysts also pointed out that table minimum bets were generally around MOP2,000 in Cotai and, in casinos on the Macau Peninsula, MOP500.
The numbers topped Morgan Stanley’s expectations due to low utilization rates, which analysts believe will help boost earnings, tables and daily productivity figures for the second half of the year.
According to the brokerage, traffic on the casino floor is between 35 per cent and 45 per cent of 2018/2019 levels. Analysts also added travel between Hong Kong and Macau is similar to pre-pandemic levels, but ferry and bus frequencies could multiply.
In 2019, Macau implemented high-speed stations and added 15 per cent casino rooms, expanded capacity at various immigration channels, and enlarged capacity at different immigration channels. According to analysts, this will enable Macau to support much higher visitor numbers in the future.
The brokerage also stated this could help the city generate higher mass revenue if spending per capita is to be kept, and added that minimum bets on many casino tables had not been reduced, which should support more elevated table productivity.
According to data released by the Gaming Inspection and Coordination Bureau (DICJ), for full-year 2022, Macau’s casino GGR decreased by 51.4 per cent compared with 2021 to MOP42.19bn (US$5.25bn). That’s just 14 per cent of pre-pandemic 2019 and the lowest yearly figure since 2004.
Macau CE forecast GGR of US$16bn for 2023
As previously reported by Focus Gaming News, Macau Chief Executive Ho Iat Seng said that the government will maintain its 2023 gross gaming revenue forecast of MOP130bn (US$16bn), noting that in order for the city to recover economically it will need to bring in at least MOP10bn (US$1.24bn) per month.
“For now the budget remains unchanged, but it is a figure that we all need to work hard together to achieve,” Ho told the media before attending a government banquet in celebration of the forthcoming Lunar New Year. The government initially estimated GGR for 2023 at MOP130bn when announcing its budget in November.
He added they have to observe how the situation will play out after travel among mainland China, Hong Kong, Taiwan, and Macau resumed.
