Seaport expects Macau October GGR to fall 5pct y-o-y on soft demand

Macau casino gross gaming revenue (GGR) is likely to decline 5 percent year-on-year in October, amid continued “softness” in demand and a challenging comparison with a year earlier, says Seaport Research Partners. The institution’s forecast implies October GGR of approximately MOP22.9 billion (US$2.83 billion), according to a recent memo from analyst Vitaly Umansky. He noted that the year-on-year comparison would be affected by a high casino win rate in October last year. “We forecast October to remain soft with GGR -5 percent year-on-year,” Mr Umansky wrote. The forecast followed official figures showing Macau’s September casino GGR fell 1.2 percent year-on-year to MOP18.06 billion. It was the fourth consecutive month of year-on-year decline. It took the first nine months’ tally to nearly MOP187.12 billion, up 3.2 percent from a year earlier. Seaport’s Mr Umansky said September’s result was close to its forecast of a 1-percent decline, but came against an easy comparison, as typhoons had affected casino business in September last year. September GGR fell 17.5 percent sequentially from August, compared with what the analyst described as a more typical sequential decline of approximately 8 percent.“Softer demand is likely being caused by weaker China macroeconomic conditions and China government tax enforcement on offshore trusts impacting high-net-worth individuals with overseas assets,” Mr Umansky stated. He estimated that September VIP GGR rose by a low-single-digit percentage year-on-year, supported by a high win rate, while mass-market GGR declined by a low-single-digit percentage. Credit and market research provider CreditSights Inc said in a September 28 memo that it “does not rule out” the possibility of “tighter regulatory scrutiny remaining an overhang” for the Macau gaming sector, mainly by dampening sentiment in the VIP segment. The International Monetary Fund stated recently that the VIP segment of Macau’s casino industry was likely to account for a relatively small share of overall gaming revenue across the medium term, despite some signs of recovery. For the third quarter, Macau GGR fell 3.8 percent year-on-year, according to the institution. Seaport forecasts fourth-quarter GGR to be flat from a year earlier, with full-year growth of 2.3 percent in 2026 and 3 percent in 2027. Mr Umansky said a recovery in the base mass segment, particularly customers staying overnight, would be important for sustained growth. The institution also expects casino operators’ margins to remain under pressure from rising operating costs, modest revenue growth and continued high spending on player incentives and agent commissions. It forecasts operating expenses to increase by 4 percent to 5 percent in 2027, although that would represent a more moderate pace than in 2025 and 2026.