Macau gaming revenues rise during first quarter

by Charlotte Lee Last Updated
Draft gaming law forecasts tough days ahead for Macau junkets

Macau’s gross gaming revenues are on the up, reaching US$1.14 billion in the first quarter of the year.

GGR Asia reports that this value is up 19.7 per cent sequentially, according to data released by the Gaming Inspection and Coordination Bureau.

The figure is still down 38.3 per cent from the prior-year period.

VIP baccarat, which in 2019 accounted for as much as half of all Macau GGR, accounted for 38.6 per cent of the city’s GGR in the three months to March 31.

That was an increase from the 34.9 per cent share it had in the fourth quarter of 2020.

A number of industry observers said that the VIP segment has been placed recently under commercial pressure due to a combination of regulatory and pandemic-related factors.

Mass market games, including poker machines, provided 61.4 per cent of all Macau’s casino GGR in the first three months of 2021.

The figure was up 2.1 per cent from the previous quarter, but down 7.4 per cent from a year earlier.

Mass market baccarat alone made up 51 per cent of all GGR for the first quarter of 2021.

JP Morgan Securities said in a recent note that the VIP revenue in the Macau market was “bad” in the first quarter of 2021, “hovering at circa 20 per cent of pre-COVID-19 levels.”

The mass segment had “fared better” in the three months to March 31, at 39 per cent of pre COVID-19 levels, estimated the institution.

Macau scraps casino coronavirus test certificates

A coronavirus test certificate is no longer required to enter Macau casinos, GGR Asia reported in March.

From midnight, March 3, people wishing to enter Macau casino floors will no longer need to show a test certificate proving they are free of COVID-19 infection.

The rule where all individuals from mainland China arriving in Macau must have a negative nucleic acid test report issued within seven days of arrival, stays in place, authorities said.

A number of investment analysts had suggested that the COVID-19 test requirement for entry to Macau itself and the duration of the test certificate validity was an inhibiting factor for would-be tourists to Macau from mainland China.

The mainland is currently the only place to have a largely quarantine-free travel bubble with Macau.

DS Kim, an analyst at the JP Morgan banking group said in a note that dropping the need for the test certificate might be a “tiny step toward further easing” of restrictions on the market.

But he observed: “Since those entering Macau from China would already have negative test results anyway, the rule change is unlikely to affect inbound demand.”

But the change would probably “help revise demand” from “local” players, who had been “nearly absent since mid-July,” he added.

Brokerage Sanford C Bernstein said in a Wednesday memo that “Macau locals play is likely two to three per cent of gross gaming revenue in the market”.

Analysts Vitaly Umansky, Tianjiao Yu and Louis Li described dropping the COVID-19 test requirements for casino entry as a “positive step forward on the path to normalcy, but we do not see any border changes forthcoming in the immediate near-term.”

The local authorities had introduced the COVID-19 test certificate rule for casino entry with effect from July 15.

Factors affecting the decision to ease the COVID-19 test rule for casino access included, said the local government, the ongoing “strict compliance” with COVID-19 countermeasures on casino floors.

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