GGR to drop once again in Macau

According to analysts, GGR in Macau will drop in the second quarter and is expected to hit rock bottom as tax cuts and credit ease out.

Macau.- Finances have not been what the Macanese region expected over the last few months. Revenues have either been flat or dropped, and analysts have all forecasted even worse times to come.

However, experts have projected that gaming gross revenue (GGR) in Macau will hit rock bottom in the second quarter as recent tax cuts and credit are easing in China. That may help the market return to growth, Jefferies’ analysts said in a report on the territory’s gaming shares.

According to analysts, GGR in Macau will drop 1.1% in 2019 and VIP will go down 3.3% as well, with mass-market growing 6.5%. They also expect the market to rebound by 5.6% in 2020.

“We believe the Chinese outbound tourism market is still underpenetrated despite Chinese residential departures rising from only 10.5 million in 2000 to 162 million in 2018,” it said. “Despite this growth, only 11.6% of the population travelled abroad in 2018.”

Operators are optimistic

Brokerages in Asia have forecast poor GGR growth for the Macanese casino industry, but operators remain confident. Chairman and CEO of Melco Resorts and Entertainment Ltd Lawrence Ho Yau Lung assured he remains confident of “decent growth” in the area and was optimistic about Melco even as Macau financial pr.

“Look, it is not going to be as great as 2018 – 2018 blew everybody’s expectation at a 14% growth,” he said about GGR in Macau. “For us as a company, Melco, we care more about the underlying cash flow and EBITDA, and I think the quality of the cash flow is better now then it’s ever been.”