Macau gaming revenues decline 3.2% in October, continuing a disappointing 2019

Friday, November 1, 2019 4:09 PM

The Golden Week holiday wasn’t so golden in Macau for the casino market.

Macau gaming revenues slipped 3.2% on October despite the week-long holiday that analysts saw as underwhelming.

The Gaming Inspection & Coordination Bureau said Friday casinos collected $3.3 billion from gamblers and continued a downward trend in 2019. A month earlier, Macau gaming revenues were up less than 1%, which ended two straight monthly declines and was only the third time in 2019 that Macau reported a positive month.

For the first 10 months of 2019, Macau gaming revenues are down 1.8% and analysts said the region might be challenged to match last year’s $37.6 billion total. Macau recorded two consecutive years of gaming revenue increases in 2017 and 2018, which followed a prolonged slump of three years.

Analysts have long considered Golden Week a lucrative gaming holiday for Macau, but results this year showed a 12% revenue decline during the week compared to a year ago.

Ongoing anti-government protests in Hong Kong have seemingly disrupted transport and deterred travel to Macau in recent months. Analysts said the impact on gaming has been minimal. However, the turmoil, coupled with troubled softening Chinese economy, has hurt visitation.

“At this point given the continued uncertainty around multiple factors that could impact Macau over the next couple of months, we would expect full-year gross gaming revenue to come in toward the low-end of our forecasted range,” Stifel Financial gaming analyst Steven Wieczynski told investors.

Many analysts have written off 2019 and are focused on 2020. Other challenges could face the market over the last two months.

Chinese media reported that President Xi Jinping would meet with President Donald Trump in Macau to sign a temporary trade deal. Macquarie Securities gaming analyst Edward Engel, who is based in Hong Kong, said Chinese state affiliated media called the idea “groundless speculation.”

“VIP players have historically avoided Macau during Xi’s visits to either special administrative region, presenting headwinds to gross gaming revenue,” Engel said.

The Chinese president is already scheduled to visit Macau for the 20th anniversary celebration, and Engel told investors the occasion could result in “a 10% year-over-year decline, or worse.”

Jefferies gaming analyst Andrew Lee, who is based in Hong Kong, told investors that gaming operators are forecasting a better year in 2020 for the Macau market.

“During recent third quarter results conference calls, we sense management are relatively more optimistic for 2020 citing low base for VIP, strong mass (market business) and no impact from Hong Kong situation,” Lee said Friday.

Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.