November's 70.5% year-over-year decline follows a 72% drop in October
Casino companies operating in Macau were in focus on Tuesday after it was reported that gaming revenue in the region fell just over 70% last month, the smallest year-over-year drop since January. Publicly traded companies in the Macau gaming space include Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN) and Melco Resorts (MLCO).
GAMING DATA: Macau's Gaming Inspection and Coordination Bureau said November gross revenue from games of fortune in the region decreased 70.5% year-over-year to 6.75B patacas. This compares to a 72.5% drop in October to 7.27B patacas and a 90% decline in September to 2.21B patacas. November's result represents a 7.2% decline from October.
The aggregate of Macau casino GGR for the 11 months to November 30 stood at 52.62B patacas, a contraction of 80.5% year-over-year.
Macau previously said it expected a drop of 56% in annual gross gaming revenue this year to 130B patacas, down from 260B patacas forecast last year.
WHAT'S NOTABLE: The November GGR figure comes after China reinstated the Individual Visit Scheme, or IVS, for residents of Zhuhai from August 12, all of Guangdong Province from 26 August and all of mainland China from September 23. October's Golden Week in China was eagerly anticipated by the industry as a possible boost to Macau’s post-COVID GGR recovery, but was generally considered disappointing by experts, with visitation down 85.7% year-over-year.
Visitation numbers to the region have declined dramatically in recent months, both due to the ongoing coronavirus pandemic and also because of fears that China will soon introduce stricter measures with regards to offshore gambling.
ANALYST COMMENTARY: Bernstein's Vitaly Umansky said Macau's November GGR came in weaker than expected, adding that the month continued to be negatively impacted by visitation "bottlenecks" due to visa processing and COVID test requirements and by weakness in VIP volumes. Umansky expects visitation to continue to increase slowly over the next months with a pickup in gaming visitors, as visa processing improves over time, but adds that the key jump in visitors will come when visa processing becomes same day and via e-kiosk again, which may take some time, and doesn't see a material alleviation of bottlenecks in the near-term.
Meanwhile, JPMorgan analyst DS Kim described the November GGR results as "not terrible but not good either," saying the month "failed to deliver much-anticipated sequential recovery in GGR versus October."
PRICE ACTION: In morning trading, shares of Las Vegas Sands are up 1%, MGM Resorts shares are up 2.2%, Wynn Resorts shares gained 2%, and Melco Resorts shares trading in New York rose 1.3%.