Macau GGR August estimates revised down

Analysts are reducing their estimates for Macau gross gambling revenue in August, signalling an interruption in the month-on-month improving trend.

According to Sterne Agee, Macau table-only gross gaming revenue was MOP8.6 billion ($1.1 billion) from August 1 to August 16. Including slot assumptions, the August GGR run rate indicates a 39 percent drop year-on-year.

“Based on August market share results to date and other checks, we believe August continues to be negatively impacted by hold/win rate. Our August GGR growth forecast range is lowered to between -33 percent to -37 percent from -30 percent to -34 percent.”

August will need to better July’s negative 34.5 percent YoY growth result to mark the sixth consecutive month of “less bad” growth.

Wells Fargo has also adjusted its forecasts for August. The firm now sees a drop of 36 percent to 38 percent, against its prior expectation for a drop of 34 percent to 38 percent, while Bernstein Research sees a decline of 37 percent.

However, Sterne Agee is optimistic the improving trend seen in recent months will resume.

“We expect an overall trend of better YoY results to continue through the remainder of the year,” the note said.

Bernstein also remains confident of an improvement in the latter part of the year, followed by a pick up in 2016. It says it continues to believe gaming in Macau is a secular long-term growth story.

However, in the short term, it notes that casino operators with operational and marketing acumen are in a more favorable position to gain or retain market share.

Wells Fargo senior gaming analyst Cameron McKnight said he remains “neutral” on Macau as the market adjusts to the new normal.

“In our view, the Macau policy environment remains an overhang. In particular, there is still uncertainty around the full smoking ban, and the granting of new gaming tables to new properties. We believe longer term investors are looking for meaningful signs that policy settings are on a stable footing,” he wrote.

In terms of market share, Sterne Agee noted that from August 1 to 16, SJM had 23.7 percent of table-only market share, Galaxy had 20.1 percent, LVS had 23.6 percent, MPEL had 13.3 percent, WYNN had 10.4 percent and MGM had 8.9 percent.