Published: January 18, 2023

Macau: Morgan Stanley raises January daily GGR estimate, minimum bets higher than expected

Brokerage Morgan Stanley has raised its forecast for Macau’s daily average gross gaming revenue (GGR) for January to MOP250 million (US$31 million) from MOP200 million, saying that recent minimum bets placed in local casinos were higher than expectations.

The adjusted GGR estimate represents an increase of 123 per cent month-on-month, which accounts for 31 per cent of the level for Jan 2019, with 85 per cent of the total to be from the mass market.

Most casinos in Cotai have seen at least 60 per cent tables busy with players, and the minimum bets there were generally around MOP2,000, while it was MOP500 in casinos on the Macau Peninsula, analysts Praveen Choudhary, Gareth Leung and Stephen W Grambling highlighted in a note after their first trip to Macau after three years.

The figures are higher than Morgan Stanley’s expectation considering low utilization, and the analysts believe it will help with win, table, and day productivity numbers for the second half of the year.

Foot traffic on casino floors stood between 35 and 45 per cent of 2018/2019 levels, according to the note, The Venetian, Londoner Court, Galaxy, and COD were generally looking good, but Pacifica, Studio City, GLP, Wynn, and Parisian looked light.

The eased travel between Hong Kong and Macau is similar to pre-Covid levels, however, the frequency of ferries and buses can go up manyfold, the analysts said.

As cross-border travel among Macau, Hong Kong and the mainland returned to normal after the three-year-old quarantine requirement imposed on travelers was scrapped, Hong Kong visitor arrivals to Macau exceeded 10,000 on 14 January, with the SAR welcoming 153,079 tourists between January 13 and 15, logging a daily average of 51,026.

The brokerage stated that Macau had added 15 per cent casino rooms, expanded capacity at different immigration channels, and introduced high-speed stations since 2019. In that way, it believes that Macau will be able to support much higher visitor numbers in the future.

This could help Macau generate higher mass revenue, if spending per capita is to be maintained, the analysts outlined, adding that minimum bets on many casino tables had not been lowered, which should support higher table productivity.

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