Macau casinos saw incremental boost in March

Macau casinos saw a 0.8% boost in gross gaming revenue for the month of March – 76.1% of the total for the month in pre-Covid 2019 and “in-line with (reduced) expectations”, according to Seaport Research Partners.

Analyst Vitaly Umansky said the results were not “materially impacted” by the 25 March arrests of dozens of alleged illegal money-changers. But the crackdown could briefly discourage visitation.

Millions in illicit cross-border transfers

Money-changers, known colloquially as “huanqiandang”, help gamblers sidestep government controls on capital flight. Last October, the Macau Legislative Assembly criminalised the unlicensed exchanges, whose agents work in and around casinos. Authorities said the operations lead to “fights, fraud, thefts, illegal immigration and other crimes”, including kidnapping and murder.

The latest sting netted 42 money-changers, including “ringleaders and gang members”, according to Macau Business. They allegedly facilitated HK$790 million (£78 million/€94 million/$101.5 million) in cross-border transfers, for estimated profits exceeding HK$21 million.

April GGR could be “slightly affected by near-term potential headwinds” from the crackdown, Umansky wrote. “Customers may stay away from pawnshops and others may forego a near-term trip to Macau,” he wrote. But long term, the effect should be negligeable.

Jefferies Equity Research said the arrests are “likely to impact sentiment and hence, GGR in the next few weeks”. However, analysts Anne Ling, David Katz and Jingjue Pei believe the impact will be “temporary and generally minimal on fundamentals”.

Flat April should precede stronger second half

Seaport projects a 0.1% year-on-year GGR decline for April (or -5.8% month-on-month), on par with the “historical average”. However, Umansky anticipates a 10.9% lift in the second half, for a 6.5% year-on-year increase for 2025.

“Growth should be driven by increase in marketing efforts by operators and consumer trends in China,” he wrote. “China stimulus and policy measures are likely to help China’s economy and improve consumer confidence later this year.”

The Jefferies team noted that March and April are typically the lowest GGR months. “The potential next catalyst for Macau is performance during the May public holiday,” they added.

Labour Day Golden Week, 1-5 May, typically drives a surge of travel to Macau. In 2024, Macau welcomed some 605,000 visitors, exceeding the 2023 total but still short of 2019 figures, according to the Macau Government Tourism Office.

 Analysts say results for the month were not affected by recent money exchange arrests. Revenue is expected to be flat for April.