Macau gaming stocks up after online gambling crackdown was said to be beneficial to local operators

Credit Suisse said that Macau’s tougher measures on online gambling were beneficial to local casino operators and Macau gaming stocks were higher this week.

This came even as Goldman Sachs rebutted the connection, saying that less business for online casinos based in Southeast Asia would not necessarily translate into more business for the Macau SAR, Macau Daily Times reports.

"We do not believe stopping proxy betting in the Philippines or Cambodia would necessarily result in gaming volume being repatriated back to Macau," Goldman Sachs said.

"Some of these [Chinese] players who participate in proxy betting in the overseas markets may have difficulty securing visas to travel abroad – whether it is Macau [or elsewhere]."

The latest estimates tracking performance in July 2019 show that revenues are roughly in line with those of the same month last year. Still, the average daily rate of MOP821 million over the first two weeks of the month indicates a rise of about 3% compared to June.

Meanwhile, according to data released on Tuesday by the Gaming Inspection and Coordination Bureau, the VIP gaming segment continued its decline in the second quarter of 2019.

Gaming revenue from VIP baccarat declined 15.6% compared to the second quarter in 2018, while the mass segment, including slot machine earnings, climbed 18.6% over the same period. Mass-market baccarat led the increase, with growth of 22.8%.

Baccarat is by far the most popular game of chance in Macau. Last year, VIP and mass baccarat accounted for about 88% of the city’s total revenue.

The second quarter recorded combined gaming revenues of MOP73.5 billion, with VIP baccarat accounting for MOP34.6 billion, or 47% of the total. Meanwhile, mass-market baccarat accounted for MOP29.6 billion, or 40% of the total.

Some brokerages yesterday suggested that the quarterly figures were overstated due to the reclassification of some gaming tables.

The analysts said that prior to the full cessation of smoking at gaming tables by January 1, 2019, some mass-market gaming areas had been classified as VIP. The analysts attribute the continued rise in the mass segment to the classification correction.

Gross gaming revenue in the first half of 2019 fell just short of MOP150 billion (USD18.6 billion), down 0.5% from the equivalent period in the previous year. The result came as June performed well above expectations, recording 5.9% growth in what is usually considered the weakest month of the year.