Macau Gaming Revenue Jumps Over 800% In June From Last Year

Casino companies operating in Macau were in focus on Thursday after it was reported that gaming revenue in the region surged almost 813% last month compared to the same month 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 812.5% to 6.535B patacas in June compared to the same month of last year. This compares to a 492.2% year-over-year increase to 10.445B patacas in May compared to the same month of last year and a 1,014.4%year-over-year increase in April to 8.4B patacas. Year-to-date GGR is 49.023B patacas, a 45.4% increase from 33.72B patacas last year.

WHAT'S NOTABLE:

 While June's GGR spiked from last year, it was down 37.4% compared to May and is the lowest monthly GGR figure recorded this year. The month-on-month decline 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 February 23 of this year, Macau authorities announced that no city in mainland China was any longer 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, but, 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. Average daily visitor arrivals during the five-day holiday rose 158% compared with the Spring Festival in February and climbed 25% from last month.  

ANALYST COMMENTARY: 

JPMorgan analyst DS Kim told investors in a research note that checks with some Macau hotels suggest the government sent out a notice a few days ago on a planned reopening of the border. The analyst believes a "limited reopening scheme" between Macau and Hong Kong "could be applicable only to fully-vaccinated travelers, possibly including mainlanders entering from Hong Kong."

Meanwhile, Bernstein analyst Vitaly Umansky told investors in a research note of his own that the new wave of Covid-19 cases in Guangdong has subsided as the province has reported zero local case since June 22, and the Macau and Guangdong governments have been discussing on easing the validity of COVID-test certificate from 48 hours to seven days.

PRICE ACTION: In morning trading, shares of Las Vegas Sands were up 0.6%, MGM Resorts shares were up 1.5%, Wynn Resorts shares gained 0.2%, and Melco Resorts shares trading in New York were up 1%.

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