Macau records downward leveling of GGR growth in 2019

  2. by reelgamesite01
  3. May 13, 2024

Fitch Ratings said Macau is now negatively affected by a slowdown in mainland China, with 2019 game gross revenue (GGR) likely to grow "flat or low single digits".

 

 

Fitch expects Macau to "record flat to slightly positive GGR growth in 2019 due to active fiscal stimulus from the mainland government, the spread of trade tensions with the United States and recently completed improvements in transportation infrastructure," despite a slowdown in mainland China

 

The latter is a reference to the Hong Kong-Zhuhai-Macao bridge. Many recent investment analysts have noted that the opening of the Zhugang Delta crossing bridge in October last year has spurred growth in Macau day trips.

 

The forecast was part of Fitch's "All in: Global Gaming Handbook" released on Monday. In its report on the Asia-Pacific region, the ratings agency highlighted the weakness of Macau's gaming business to the economic slowdown in mainland China - China is Macau's most important supply market.

 

Fitch Ratings' 2019 GGR growth estimate for Macau already included a 0.5% decline recorded in the first quarter.

 

According to Macau's gaming regulator, Macau's casino GGR grew 14% year-over-year in 2018. Last year's cumulative GGR was about $302.85 billion ($37.57 billion) compared to MOP 265.74 billion the previous year.

 

"Macao's recent slowdown in gaming revenue is attributed to negative economic sentiment in the mainland, which has been exacerbated by trade tensions and a slowdown in credit extensions," Fitch said in a report. "The [GGR] slowdown is primarily linked to a slowdown in mainland China, which will have a disproportionately negative impact on the VIP sector (53% of total gaming revenue in Q4 2018)," Fitch added

 

Fitch, however, noted that mainland China's government is ramping up spending and tax stimulus. "More recent economic and credit indicators for 2019 are recovering," it said.

 

Mainland China's GDP growth rate in 2019 is expected to fall to 6.1%, down from 6.6% in 2018, the rating agency said.

 

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