BofA Cuts Macau Estimates After 97% Year-Over-Year Drop In Gross Gaming Revenue

Macau reopened casinos to guests, but gross gaming revenue was still down 97% year-over-year in June — and down 59.4% month-over-month — to MOP716 million ($89.67 million), according to BofA Securities. 

The Macau Thesis: Macau's June GGR was lower than expected, as BofA was expecting an 80% year-over-year decline and the consensus estimate called for a 95% decline, analyst Billy Ng said in a Wednesday note. 

The month-over-month fluctuation could be due to the VIP win rate, as the gaming volume is mostly generated by a small group of players, the analyst said. 

July's GGR is likely to remain down 90% from last year assuming the border rules remain unchanged, he said. 

As it stands now, visitors from mainland China and Macau need to quarantine upon entry. Progress is being made on some agreement that would lift the quarantine for people from Guangdong province and Hong Kong, but it is proving to be more difficult than expected.

Due to limited visibility on when quarantine orders can be lifted, BofA expects full-year 2020 GGR to be down 70% year-over-year in Macau, worse than a prior estimate of a 41% drop. 

This assumption includes a first stage of reopening for business travel only in August and no full border normalization before 2021.

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