CREDIT SUISSE: SUBSTANTIAL DECLINE IN NOVEMBER GAMING REVENUE

2014/11/26

From;Macau Business Daily

Assuming average daily revenue remains at the same level as last week – at around MOP800 to MOP850 million – for the rest of November, gross gaming revenue this month may drop by 18 to 20 percent year-on-year, says Credit Suisse

Macau’s November gaming revenue is tracking a year-on-year decline having already recorded five straight months of plunging figures since June this year, according to a gaming industry report by Credit Suisse.
The Swiss-based bank’s analysts Kenneth Fong and Isis Wong noted that up to 23 November, Macau’s gross gaming revenue is MOP18.7 billion, implying an average daily revenue of MOP813 million month-on-date, which is lower than that of MOP850 million in October and MOP852 million for September.
But the equity researchers have also indicated a pick-up – the average daily revenue of last week (17-23 November) increased week-on-week from MOP750 million to MOP850 million in the wake of the city’s major event, the Macau Grand Prix, coming in at the high end of the researchers’ anticipated range of MOP800-850 million.
The Swiss bank, however, remains pessimistic. ‘Despite the week on week improvement, mass business continued to remain soft. By revenue mix, adjusted for the impact of Melco premium mass revenue reclassification, we estimate VIP revenue to decline by 25-28 per cent and mass by 5 to 6 per cent, respectively,’ the report reads.
‘China easing of monetary policy helped sentiment and a steady macro should gradually help Macau longer term, in our view,’ wrote the Swiss bank. ‘That said, we are not overly optimistic on that yet as its near-term impact is likely to be muted and the gaming revenue is still finding its bottom.’
Four reasons are identified for Macau’s gaming revenue slowdown: the smoking ban, transit visa restrictions, anti-corruption campaign in China suppressing demand, and tight junket liquidity.
In terms of market share, except for MGM and Galaxy posting increases of 3 percent and 0.6 percent, respectively, the other gaming operators all suffered a decline in November, according to the research team’s calculations.

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