Macau Gaming Revenue Jumps 530% In July From Last Year

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Casino companies operating in Macau were in focus on Monday after it was reported that gaming revenue in the region surged almost 530% last month compared to the same period of last year. Publicly traded companies in the Macau gaming space include Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN), and Melco Resorts (MLCO).

Gaming Data

Macau's Gaming Inspection and Coordination Bureau said gross revenue from games of fortune in the region increased 528.1% to 8.44 billion patacas in July compared to the same month of last year.

There was an 812.5% year-over-year increase to 6.535 billion patacas in June compared to the same month of last year, and a 492.2% year-over-year increase to 10.445 billion patacas in May. Year-to-date GGR is 57.47 billion patacas, a 63.9% increase from 35.06 billion patacas last year.

What's Notable

June's GGR decline from May followed an outbreak of COVID-19 in neighboring Guangdong Province in late May, which saw border restrictions between Macau and mainland China tightened and mandatory quarantine measures imposed on arrivals from parts of Shenzhen, Guangzhou, and Foshan.

On Feb. 23 of this year, Macau authorities announced that no city in mainland China was considered by the Macau authorities to be "medium risk" for transmission of COVID-19 infection.

Macau has ramped up efforts to promote tourism to mainland residents given that both sides have largely managed to contain the virus, yet the city's government still has tight restrictions for travelers from most spots, including neighboring Hong Kong and Taiwan. May's revenue was aided by the five-day Labor Day Golden Week. According to the Macau Government Tourism Office, 167,000 visitors came to Macau during the holiday, with more than 93% from China.

While Macau's tighter countermeasures to prevent the spread of COVID-19 were gradually eased between the second half of June and early July, travel restrictions between Macau and mainland China were again increased in late July due to new COVID-19 infections on the mainland.

As of midnight on July 31, people intending to enter Macau on a direct flight from mainland China must hold a nucleic acid test certificate issued within 48 hours proving they are negative for COVID-19. As of Aug. 2, Macau authorities have also added new locations to the list of places where departing travelers must do a 14-day quarantine upon arrival in Macau.

Analyst Commentary

Bernstein analyst Vitaly Umansky commented that July's month-on-month GGR improvement was driven by visitation recovery following the June travel disruption in Guangdong. However, as the COVID-19 cases are still spreading across China, and Macau-Hong Kong travel is not likely to reopen soon,

Umansky sees August GGR down 60% compared to August 2019. The analyst expects GGR improvement beginning in late summer as COVID-19-related travel constraints begin to decline.

Price Action

In morning trading, shares of Las Vegas Sands were down 0.3%, MGM Resorts shares were up 0.7%, Wynn Resorts shares gained 1.3%, and Melco Resorts shares trading in New York were up fractionally.

Disclosure: None

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