Macau GGR misses July estimates, analysts cite war on illegal money-changers
Macau’s gaming industry fell short of revenue estimates for July.
Gross gaming revenue (GGR) for the month improved 12% over 2023, to MOP18.6bn (£1.795bn/€2.105bn/US$2.31bn). But analysts projected a year-on-year increase of 14%.
June, too, missed median estimates. According to Macau’s Gaming Inspection and Coordination Bureau (MGTO), GGR for the month rose 16.4% year-on-year. Analysts had called for 17.5%.
Inhibiting factors
The Macau GGR shortfall can be attributed in part to the midsummer slump. Travel from the mainland typically surges during the May Golden Week holiday, then tapers off in June and July.
In addition, there were only 12 weekend days last month, versus 15 during the same period in 2023. Weekends generally boost revenue by about 20% over weekdays.
A larger and potentially more enduring factor is the government’s hardline stance on illegal money exchanges.
In June, the ministry of public security ordered “a fierce offensive against crimes such as illicit money-exchange activities”. The operations have been linked to “fraud, thefts, illegal immigration and other crimes” including money laundering and loan sharking.
The secretary for security, Wong Sio Chak, says gaming-related crime rose 122% year-on-year in the first quarter. Fraud crimes accounted for 21.7% of the total. Loan sharking was second, at 17.9%.
Officials contend the crimes have “seriously affected social stability” in the Chinese SAR. They hope to disrupt the “entire industry chain” with targeted intervention, including increased border checks.
On the upswing
Despite a sluggish July, the trend continues positive. Through July, GGR in Macau was up 36.7% from 2023 to MOP132.4bn.
According to JP Morgan, the numbers signal “pretty decent – albeit not fantastic – demand from summer holidays, despite concerns regarding a crackdown on illegal foreign currency exchange gangs”. For the year, GGR is running at 76.1% of 2019 levels, before Covid-19 shut down the city for almost three years.
The analyst team anticipates a big boost during the next Golden Week celebration, which starts on National Day, 1 October.
In 2023, Macau welcomed more than 930,000 visitors for the seven-day autumn celebration. That was shy of the record, almost 975,000 visitors, set in 2019. But it exceeded the MGTO’s estimates by more than 16%.