Macau October GGR Trending Higher, But Motorcycle Grand Prix Probably Canceled

Posted on: October 20, 2020, 04:42h. 

Last updated on: October 20, 2020, 05:20h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

JPMorgan analysts estimate gross gaming revenue (GGR) in Macau averaged $27.8 million on a daily basis through the first 18 days of October. That’s a far cry from pre-coronavirus pandemic levels, but still a marked improvement over September’s tally.

Macau Grand Prix
Scenes from the 2017 Macau Motorcycle Grand Prix. The event is out this year because of COVID-19. (Image: Roadracing World)

The Golden Week holiday, which concluded on Oct. 8, was sluggish compared to prior years. But average daily GGR for that period was $35.1 million. That figure declined to $25.1 million a day last week, according to JPMorgan.

That is (obviously) weaker than Golden Week’s MOP$280 million (US$35.1 million), but well above September’s MOP$74 million. It reflects the IVS resumption for non-Guangdong residents (which kicked-in in earnest after Golden Week given lead-time,” note the bank’s analysts.

During the earlier stages of the coronavirus pandemic, analysts widely forecast a recovery for Macau concessionaires, one supported by pent-up demand, in 2021. However, that was based on the notion the special administrative region’s (SAR) gaming-heavy economy would materially spring to life in the current quarter. If that doesn’t happen, the rebound time line gets pushed out to 2022.

Travel Woes Linger

Hindering concessionaires’ ability to shake off the effects of the pandemic are still-slack visitation numbers, which appear to be the result of procedural problems.

It’s been about two months since Guangdong province resumed issuance of individual visit scheme (IVS) visas, with the rest of mainland China following suit a month later. However, there is no online option, meaning applicants have to file in person. Compounding the problem is that approval times are as long as two weeks.

Then there’s the matter of coronavirus testing. Tourists wishing to travel to Macau must present the results of a nucleic acid test confirming they’re negative for the virus. The results cannot be any older than seven days, making spur-of-the-moment trips to the casino center difficult. Authorities are considering extending that time line to 14 days, which could provide a modest boost to gaming revenue.

Motorcycle Grand Prix Likely Out

While the Macau Grand Prix is still slated to run from Nov. 19-22, the president of Macau’s Sports Bureau, Pun Weng Kun, says it’s likely the motorcycle portion of the event will be scrapped because of a dearth of foreign drivers.

The SAR allows residents of mainland China to enter without quarantine. But citizens of other countries face a 14-day quarantine, a policy making visits, for whatever reason, impractical for many. Additionally, Europe, which is home to many of the would-be participants in the motorcycle portion of the competition, is experiencing another wave of COVID-19 cases, prompting Macau to reiterate travel bans on many countries in that region.

The Macau Motorcycle Grand Prix was held for 57 previous years, often dominated by drivers from the UK, a region still grappling with the pandemic.

Organizers say that event will be replaced by lower-level auto races, with drivers coming exclusively from Asia.