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Macau Gaming Revenue Down 94.5% In August, Analyst Sees Rebound In September

Macau Gaming Revenue Down 94.5% In August, Analyst Sees Rebound In September

Macau, the world’s largest casino gambling hub, reported another abysmal month of numbers on Tuesday. Gross gaming revenue for the month of August was down 94.5%, slightly worse than consensus analyst estimates of a 93% decline.

However, Bank of America analyst Billy Ng believes Macau’s business will finally start picking back up in September.

Investors were optimistic business would start to pick back up in Macau in August after the Chinese government resumed travel visas to Macau from Zhuhai and Guangdong residents mid-month, but Ng said required COVID-19 testing may be delaying the first wave of visits. Automatic visa application machines are not yet online. Therefore potential visitors must make a reservation to apply in person and then wait an estimated seven days for their applications to be processed.

Looking Ahead: While the overall August numbers weren’t great in Macau, Ng said Macau received 9,500 visitors on Aug. 30 compared to 2,387 daily visitors on average in the month of July.

“We forecast that Sep GGR will start to pick up but still be down 80% YoY (+232% MoM), with visa to Macau already resumed in GD and to be resumed in rest of mainland from Sep 23,” Ng wrote in a note.

The Macau Tourism Association projects Macau visitation will improve from down 90% in August to down between 70% and 80% in September and down just 50% in October.

Ng doesn't expect Macau to be subject to a new blacklist of cross-border gambling tourist destinations recently established by the Chinese Ministry of Culture.

How To Play It: Bank of America has the following ratings and price targets for U.S.-listed Macau casino stocks:

  • Wynn Resorts, Limited (NASDAQ: WYNN), Buy rating, $95 target.
  • Las Vegas Sands Corp. (NYSE: LVS), Buy rating, $61 target.
  • Melco Resorts & Entertainment Ltd (NASDAQ: MLCO), Buy rating, $23.20 target.
  • MGM Resorts International (NYSE: MGM), Underperform rating, $15 target.

Benzinga’s Take: Lifting the travel restrictions to and from Macau is the first step in the recovery process, but it will still take time for gamblers to feel comfortable traveling and gaming in a crowded casino. Las Vegas casinos are struggling in a similar fashion in the U.S., but the online gambling business is booming.

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