It’s a well-established fact that in Macau’s casino scene 2019 hasn’t measured up to expectations. Generally, gross gaming revenue (GGR) was flat compared to last year, which is another way of saying that the industry is extremely soft, and the expanded image is also starting to look grim. If there was optimism that an end-of-year drive could help stop the hemorrhaging in 2019, it doesn’t look like it will happen and November is on pace to see the year’s largest fall according to reliable Gambling source

Analysts with Nomura Instinet released an update yesterday on Macau’s gaming activity, claiming that demonstrations in Hong Kong definitely have an impact on the casinos of the city. Nevertheless, the degree to which GGR is impacted by the protests is not exactly known.

Both Nomura and Sanford C. Bernstein identify the demonstrations as a cause, but agree that Chinese consumers ‘ overall attitude, which is worse than last year, plays a greater role. Certain considerations include the movement of currencies, explained Sanford Bernstein analysts,

“Aside from a softer China economy, several other factors continue to create headwinds to GGR. Continued weakness in China’s currency poses weakness to GGR growth. Historically, there has been some correlation between GGR and the renminbi/Hong Kong dollar and U.S. dollar foreign exchange rate.”

So far this year, August recorded the largest drop year-on-year when GGR was seen at $3.01 billion on the local gambling market, down 8.6 percent. The GGR could be as small as $2.77 billion, which would be around 9 percent lower than a year earlier, based on what has been seen so far for November.

Macau appears to be preparing for an ongoing slump, and the government of the city recently stated that GGR will most likely see no growth for next year. Analysts are now updating their 2020 forecasts, and Morgan Stanley has been chiming in. Its market analysts, Praveen Choudhary, Gareth Leung and Thomas Allen, released an update last Friday indicating that GGR will only grow by 2 percent next year.

The analysts added, “GGR growth could remain negative in the first half of 2020 unless VIP recovers. Consensus earnings revisions remain negative…For fourth quarter 2019, we expect mass revenue to be up 11 percent, while VIP revenue continues to decline [in this case] by 27 percent year-on-year. For 2020, we estimate mass revenue to be up 11 percent, [with] VIP to be down 13 percent, with GGR up 2 percent (earlier 13 percent).”