Macau’s gross gambling revenue dropped for a third straight month in August, falling 6.1 per cent, worse than most analysts’ expectations.
According to the Gaming Inspection and Coordination Bureau, revenue fell to 28.9bn patacas in August ($3.6bn) from 30.7bn patacas a year earlier. Analysts had been expecting a decline of between three and six per cent.
The drop in June and July was mainly blamed on the distraction of the World Cup. For August, analysts say China’s crackdown on corruption is crimping revenue from VIPs, which makes up about two-thirds of the total in the territory.
The 3.7 per cent June drop in GGR was the first decline recorded in the world’s biggest gambling hub in five years. Analysts had been predicting a recovery once the World Cup effect had passed.
A smoking ban due to come into effect in October is also expected to further slow revenue, at least in the short term. Construction work on many of the casino floors to comply with the new regulations is having some impact on mass market gamblers.
UBS said the lack of a seasonal rebound in the VIP sector had been a disappointment and the firm is reviewing its estimate for the full year.
UBS said in a note that it estimates mass market revenues grew mid to high teens in August, while VIP revenues declined in the high teens.
“Based on our checks with industry participants, we believe that some properties were hampered by weak VIP hold in the latter part of August, which could have dragged headline revenues.
“Nonetheless, we believe VIP volumes have remained flattish month on month versus July and June, showing no seasonal sequential growth typical of the summer months. We believe mass segment could have shown slightly better than seasonal growth in August against July.”
UBS said the consensus estimate for full-year revenue currently stands at about six to seven per cent, meaning forecasts for the rest of the year are for growth of four to five per cent.
