Macau is just having the worst luck this year. While the government and gambling industry are doing their best to grow gambling revenues, and thus the economy, outside factors continue to pull it down, with July being another down month for gross gaming revenue (GGR).
The Gaming Inspection and Co-ordination Bureau (DICJ) announced GGR had decreased 3.5% year over year for the month of July, Macau Business reports. GGR came in at MOP 24.4 billion ($3 billion), which is an increase from June’s total of MOP23.81 billion ($2.96 billion), but still down year over year.
There are a few potential reasons why July 2019 didn’t match up to July 2018. Analyst Sanford C. Bernstein cites the media incident of Suncity Group, where the operator was accused by Chinese media of offering illegal online gambling to mainland China. SunCity denied that these accusations had hurt their VIP numbers, but Bernstein cites this incident as a reason for Macau’s overall decline.
They aren’t the only ones with an opinion though. As Bloomberg notes, JPMorgan analysts believe that the slide in revenue might be due to a lack of Hong Kong visitors. While Mainland Chinese tourists can use the HKZM bridge to access Macau directly, those in Hong Kong might have stayed inside to avoid potential violence from the protests against the government there. Analyst Robin Yuen specifically noted that the Hong Kong – Macau ferry was disrupted on July 28 due to the protests, lending evidence to this theory.
Add all of this to the continuing U.S.-China trade war, which has suppressed VIP revenues since the beginning of the year. Increases in tourism have helped mass market gaming improve their numbers, but the sharp decline in VIP gambling has hurt numbers overall.
Bernstein analysts expect that might change in August, predicting GGR growth of as much as 2% year over year, specifically citing an improvement in the credit situation of Chinese VIPs. They might have made that forecast without checking the weather forecast though, as typhoons have started to affect the industry, possibly putting a fast damper on August returns.
