Macanese GGR in May on track to be flat

Forecasts for Macanese GGR in May vary but are between flat and a moderate increase, two weeks into the month.

Macau.- 2019 hasn’t been the best year for the gaming segment in Macau so far, but May seems to be on track for decent results. According to different forecasts, GGR will be either flat or moderately better year-on-year, as revealed by the first two weeks of the month.

According to Sanford C Bernstein, Macanese GGR in May will grow between 2-4% from the same month in 2018. Nomura’s Instinet, however, sees it flat despite seeing the same stronger revenues from VIP and mass gaming than Macau casino GGR in the eight days ended May 13.

“Potential high-end GGR stabilisation and renewed strength may come from a recovering credit cycle in China, which may support VIP recovery in the second half,”  Sanford analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu wrote.

“The recent heightened tension in U.S.-China trade relations, however, casts uncertainty over the GGR recovery. If the trade war sustains over an extended period, it will likely pose a headwind to China’s economy and gaming spend from China’s high-net-worth individuals in Macau.”

Preparing the tender

Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac has revealed that the local government is preparing work that would lead to a public tender process for gaming rights. The tender could take place in 2021, a year before the licenses expire.

The concessions for Macau’s six casino operators expire in 2022. Leong said that the government is taking steps towards a public tender, including legislative ones. He added in a news statement from the Government Information Bureau from Macau that putting the terms of all the gaming concessions in line would benefit the preparation for the public tender. He also said that the government had enough time to prepare itself in order to avoid any negligence and be completely ready once it launches the tender.