Macau’s October gaming sales are on track for the steepest decline this year, and analysts expect casino gross gaming sales (GGR) to fall more than 20% year-over-year.
“Macau posted a GGR of $18.7 billion ($2.3 billion) for the month, meaning its average daily revenue (ADR) was $984 million,” a note from Credit Suisse AG issued in Hong Kong through Oct. 19 read.
The investment bank expected an ADR of $829 million last week, down 15% year-over-year. “While this trend is in line with normal seasonality, year-over-year declines have shrunk from 30% in the first week of October, as sales tend to slow after the Golden Week holiday,” analysts Kenneth Fong and Isis Wong said.
“In October, GGR is expected to be down 18% to 21% year-on-year to $28.9 billion to $29.5 billion, with an ADR of $850 million to $900 million for the rest of the month,” the Credit Suisse team added.
Daiwa Capital Markets expected October sales to drop 21% to 25% year-over-year. “According to surveys in the market, overall activity remains weak,” Daiwa analysts Jamie Su and Adrian Chan said in a note on Tuesday.
The broker said the market share of Sands China Ltd, SJM Holdings Ltd and Galaxy Entertainment Group Ltd has leveled off to about 23%.
Cameron McKnight of Wells Fargo Securities LLC also expects a year-over-year decline of at least 20% in October. “The week-over-week decline was better than last year’s 15% decline in the second week after Golden Week, and smoking cessation doesn’t seem to be an issue at the moment,” McKnight said.
Under the new smoking regulations, casino public floors, including premium public spaces, will be required to quit smoking from Oct. 6.
“It’s important to note that October 2013 is difficult to compare, with VIP, bulk and total sales growing 28%, 45%, and 32% respectively,” McKnight added.
Analysts expect VIP sales to fall more than 30% in October and bulk sales to remain flat.
If the final monthly tally confirms analysts’ predictions, Macau casinos GGR will decline for the fifth straight month compared with the same month a year earlier. Macau casinos GGR declined 11.7% in September compared with the same month a year earlier, government data showed. 바카라사이트
The slowdown has not been seen since the first and second quarters of 2009, following the global financial crisis of the fall of 2008. Since then, gaming sales have dropped 12.7% year-over-year in the first quarter of 2009, and 12% in the second quarter compared to the same period in 2008.