In August 2024, Macau’s gaming gross gaming revenue (GGR) reached MOP$19.8 billion (US$2.47 billion), surpassing industry expectations and marking its highest recovery rate since the pandemic ended. This figure represents a remarkable 81.5% of the GGR recorded in August 2019, showcasing a robust comeback for the gambling hub.
August Performance: A Record High
August’s GGR result stands out as a significant achievement for Macau’s gaming industry. The MOP$19.8 billion not only exceeded market consensus but also set a new benchmark for recovery. The recovery rate of over 81.5% compared to August 2019 is particularly notable, reflecting the strong resurgence in gaming activities and visitor spending. This impressive recovery underscores the resilience of Macau’s casino sector, which has been navigating the post-pandemic landscape with considerable success.
Analysts’ Forecast for September: Anticipating a Slowdown
Despite the encouraging August figures, industry analysts are bracing for a potential slowdown in September. The month is traditionally seen as a “shoulder season,” situated between the summer holiday period and the peak October Golden Week. This transition period often results in lower tourism and gaming activity.
JP Morgan’s Outlook
In a note released shortly after the August figures were published, investment bank JP Morgan provided a cautious outlook for September. Analysts DS Kim, Mufan Shi, and Selina Li forecast a GGR of approximately MOP$17.5 billion (US$2.18 billion) for September. This projection implies a 12% month-on-month decline, translating to a daily run-rate of MOP$580 million (US$72.2 million). According to JP Morgan, this expected decrease should not be surprising given recent trends, including missed expectations in June and July and deteriorating data from the broader China consumer and leisure sectors.
JP Morgan’s analysts note that while the Macau gaming demand trend is slightly better than recent market fears, it still reflects a broader pattern of subdued consumer spending and leisure activity in China.
Deutsche Bank’s Perspective
Carlo Santarelli of Deutsche Bank offers a somewhat less pessimistic forecast. He predicts a smaller 9% month-on-month decline in GGR, estimating September’s total at around US$2.24 billion. This would represent a decrease of approximately 6.2% on a daily basis. Santarelli’s outlook reflects a more optimistic view of Macau’s gaming industry, suggesting that while September will see a decline, it may not be as pronounced as some other forecasts indicate.
Seaport Research Partners’
Vitaly Umansky, Senior Analyst at Seaport Research Partners, aligns closely with the average forecast, projecting a 10% decline in September’s GGR, bringing the total to MOP$17.78 billion (US$2.21 billion). Umansky notes that September is historically one of the weaker months for Macau’s gaming industry, along with June.
Additionally, Umansky addresses the potential impact of China’s crackdown on illicit money exchange gangs. He suggests that while this crackdown may have temporarily affected money flows into Macau and caused some individuals to postpone their visits, the overall impact is expected to be minimal. As the year progresses, the severity of the crackdown is anticipated to decrease, leading to a stabilization of revenues.
Macau’s gaming industry demonstrated significant resilience in August 2024, achieving a record GGR that highlights its recovery since the pandemic. However, the outlook for September suggests a period of adjustment as the industry navigates seasonal fluctuations, broader economic trends, and regulatory impacts. Analysts are predicting a range of outcomes, with estimates varying from a 9% to a 12% decline in GGR. Despite these anticipated challenges, the overall trend indicates that Macau’s gaming sector continues to perform better than some other areas of the Chinese consumer market.