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Macau Gambling Industry Set to Grow in June

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A Monday note from JP Morgan Securities (Asia Pacific) argues that the recovery of the gambling industry in Macau will continue this month due to the return of live concerts and their positive effect on mass market gross gaming revenue (GGR).

DS Kim and Mufan Shi, analysts at JP Morgan, used weekly data to show that the daily run rate for the past seven days grew from MOP$530 million to MOP$570 million per day. This compensates for the unexpectedly slow start to the month and brings June’s total GGR to MOP$9.5 billion.

As such, Kim and Shi believe that the monthly forecast they issued of between MOP$14 billion and MOP$14.5 billion (or MOP$470 million to MOP$480 million per day) might be “too conservative”.

In the note, they said, “We would not be surprised if June bucks the weak seasonality to print better than MOP$500 million ($62 million) per day”. They also highlighted that land-based casinos may be able to post strong Q2 results and do better than expected, with mass GGR and EBITDA recovering to more than 80% and 65% of pre-pandemic levels, respectively.

As mentioned, analysts believe that the return of live concerts to Macau in recent months has had a big impact on the industry’s recovery. For example, the short residency of Jacky Cheung at The Venetian Macao’s Cotai Arena attracted high-value players, which “in turn helps to lift overall industry GGR”.

Cheung, a singer and actor from Hong Kong, performed 12 concerts between June 2 and 9. There were also 14 concerts from Cantopop artist Leon Lai Ming during May and the first half of June and a number of concerts from the South Korean K-pop group Blackpink.

As such, Shi and Kim believe that Macau’s will “recover well beyond pre-Covid levels. They noted the increase in the daily rate run since the concerts took place and they cite it as evidence that the industry will post impressive results this month.

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