Macau GGR Slips 14% in September as Premium Segments Weaken

Macau’s average daily casino gross gaming revenue for the first 20 days of September came in at MOP610 million (US$75.5 million), falling short of market expectations and marking a notable month-on-month decline driven by weakness in premium segments, according to banking institution UBS.

Read more Cricket

The figure represents a run-rate below the market consensus expectation of circa MOP650 million to MOP670 million for September’s average daily GGR. If this level were hit, it would indicate a month-to-month fall of around 5% to 8%, but still a rise on an annual basis of about 7% to 10%.

Premium Segments Lead the Drop

The latest data from UBS, based on its own channel checks, points to a circa 14-percent month-on-month decrease in average daily GGR for the first 20 days of the month. The institution noted that the sequential decline appears to be led by the premium segments, coinciding with the implementation of individual income tax rules governing offshore trusts.

Between the segments, mass daily revenue run-rate was down 13% to 16% month-on-month, while VIP volume daily run-rate was down 15 percent to 18 percent month-on-month, at a VIP hold of 3.4% to 3.7%.

Macau’s GGR averaged about MOP614 million a day from September 14 to September 20, up from the circa MOP586-million daily run-rate in the previous week. UBS said the increase was likely led by VIP hold volatility. Despite the weekly uptick, the average daily GGR run-rate for the first 20 days of September remained flat year-on-year.

A 14% month-on-month fall represents an even greater-than-usual seasonal decline from the normal 5% sequential decline experienced in the 2015-2019 period, according to the institute.

Tax Rules Impact Offshore Trusts

The tax rules referred to by UBS involve Chinese authorities imposing, from July 24, individual income tax on assets placed by Chinese tax residents in offshore trusts and on income generated by such assets. Under the rules, a 20% tax is levied on appreciation in value at the time shares, property, or other assets are transferred into offshore trusts, according to a July joint announcement by China’s Ministry of Finance and State Taxation Administration.

Read more Football

Unpaid taxes on assets placed in trusts since January 2023, and on trust income received before 2026, must be settled within a 90-day period, meaning by October 22, to avoid penalties for late payment. New income tax regulations for offshore trusts in China seemed to plug a loophole exploited by wealthy citizens to shelter their wealth abroad, according to the Reuters news agency.

This timing in relation to the tax implementation coincides with the evident weakness seen in premium classes, implying that the new tax regulations could affect gaming in these high-end players.

Golden Week Hotel Demand Shows Strength

Regarding the outlook for October Golden Week, the seven-day National Day holiday period for mainland Chinese, UBS cited its own Macau hotel booking survey. The institution noted a 20% year-on-year increase in average comparable hotel prices, based on a survey covering 31 hotels.

As of Monday, a total of 21 of 36 hotel brands surveyed by GGRAsia, all housed within Macau casino resort complexes, appeared to have sold out their rooms for at least five nights of the upcoming October Golden Week, according to checks of the hotels’ official booking engines.

The strong hotel demand during the holiday period suggests that visitor interest remains robust despite the recent softness in premium gaming segments. Operators may see a boost in mass market activity during the holiday, even as high-end play continues to face headwinds from the new tax environment.

Read more Golf

Source: GGR Asia