According to some analysts, the ability of gaming companies in Macau to get off to a great start in 2020 will depend hugely on the relaxation of visitation visa restrictions implemented recently.
Starting in late November, Beijing laid down stricter controls on its visa policy for the Special Administrative Region (SAR). Those came prior to President Xi Jinping’s December visit to the area to take part in the 20th anniversary festivity of the handover of Macau to China from Portugal.
The limited visit policy was put into effect earlier than many market observers expected and continued throughout December, contributing to a 13.7 percent year-over-year fall in gross gaming revenue (GGR). Macau’s worst GGR showing since March 2016 was the last month of 2019.
In a recent note to clients, Bernstein analysts said, “One key driver of the January result will be how the visa constraints that were in place in November and December are being loosened.”
It is still early in January; however, some analysts are already offering up predictions for how the month is shaping up in the world’s biggest gaming center. Nomura said Macau GGR averaged $102.4 million per day through the first five days of this month, increase from the daily rate of $92 million last month.
Not Much Expectations
As reported by casino.org, the consensus for Macau’s January GGR calls for a fall of 1.5 percent on a percentage basis. However, Nomura thinks this year’s number could be on par with the $3.11 billion posted in the first month of 2019.
Just a few days into 2020, a familiar theme is emerging in Macau: revenue generated by premier players continues slumping, while mass market turnover is steady. Nomura estimates that through Jan. 5, VIP revenue was lower by 15 percent to 20 percent, while turnover among lower-tier gamblers was higher by five percent to seven percent. In 2019, mass market players accounted for more than half the peninsula’s GGR.
Because the Chinese New Year celebration begins on Jan. 25, market observers believe Macau’s January gaming numbers will benefit from easy comparisons to the 2019 figures. In 2019, those merriments didn’t start until Feb. 5.
Related To Visas
Analysts believe relaxing of the aforementioned visa is vital to the peninsula’s fortunes this month even with the aid of the early arrival of the Chinese New Year.
Bernstein said, “If we see continued tight visa controls in place, the GGR impact will be more negative than we currently forecast.”
Usual sentiment on Wall Street recently, has been that the position for Macau operators this year stands to improve because issues like the visa controls, weariness in the Chinese economy, and the trade war between the US and China were headwinds restricted to 2019.
Analysts covering Macau concessionaires like Las Vegas Sands and Wynn Resorts, have observed that 2019’s loose numbers make for easier comparables in 2020, and that GGR on the region should bounce back greatly in the second half of this year.