Macau | Crackdown on border currency exchange shops may have hampered mass gaming in May – brokerage

Macau (MNA) – Mainland Chinese police actions against currency exchange shops at the Gongbei border might have led to a deceleration of mass gaming market growth in May, claims a note sent by advisory firm Union Gaming this Friday.

‘To date, we believe most of the shops remain closed. To the extent these currency exchanges were being used to convert RMB into HKD to be used at the tables in Macau, we believe this would primarily just impact the lower tiers of mass and, importantly, would view the setback as temporary as workarounds typically pop up within a few weeks,’ said Grant Govertsen, Managing Director, Head of Asia Equity Research, Macau at Union Gaming.

Gross gaming revenues in Macau increased 12.1 per cent yearly to MOP25.48 billion (US$3.15 billion) in May 2018, missing expectations from Bloomberg and other firms of a yearly rise of as high as 19 per cent.

Nevertheless, Union Gaming considers May a ‘good month’ and stated that based upon recent conversations with VIP junkets, growth in the VIP sector was probably in the ‘mid/high teens’ with mass growth around ‘high single digits’.

However, the firm stated that visitors’ ability to use Union Pay or other bankcards had remained a viable alternative for mass customers, especially premium mass.

Union Gaming believes that the lower total gross gaming revenue growth could have been due to a slowdown in gross gaming revenue in the middle of the month and a comparison with a month that in 2017 saw a 24 per cent yearly rise.

Meanwhile, Union Gaming predicted a gaming revenue increase of 15 per cent yearly in June to MOP23 billion, around the same prediction as brokerage firm Sanford C. Bernstein.

Bernstein analysts even believe that this year’s World Cup – from June 14 to July 15 – could create some ‘headwind’ for gaming results in June, since in 2010 and 2014, during the last two World Cups, June saw 20 per cent and 16 per cent monthly declines, respectively.