Macau Sept 1-20 daily GGR down 14pct m-o-m on premium weakness: UBS

Macau’s average daily casino gross gaming revenue (GGR) for the first 20 days of September was MOP610 million (US$75.5 million), a run-rate below market consensus. It also represented a circa 14-percent month-on-month decline that appeared to be led by “premium segments”, said banking institution UBS in its latest memo, citing its own channel checks. The market consensus expectation for Macau’s September average daily GGR was circa MOP650 million to MOP670 million. Such a level, if realised, would represent a month-on-month decline of about 5 percent to 8 percent, while still being up circa 7 percent to 10 percent from a year earlier. 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, with the increase likely “led by VIP hold volatility”, UBS said. The latest weekly numbers took the average daily GGR run-rate to about MOP610 million for the first 20 days of this month, flat year-on-year. It nonetheless marked a decrease of about 14 percent month-on-month, a seasonal decline steeper than the 5-percent sequential decrease typically seen during the 2015-to-2019 period, according to the institution. “The sequential decline appears to be led by the premium segments, coinciding with the implementation of the individual income tax rules governing offshore trusts,” UBS wrote. It added: “Between the segments, mass daily revenue run-rate was down 13 percent to 16 percent month-on-month, while VIP volume daily run-rate was down 15 percent to 18 percent month-on-month, at VIP hold of 3.4 percent to 3.7 percent.” The tax rules referred to by UBS involve Chinese authorities imposing, from July 24, individual income tax on assets placed by Chinese tax residents placed in offshore trusts and on income generated by such assets. Under the rules, a 20-percent 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. 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 – i.e, by October 22 – to avoid penalties for late payment. China’s new income tax rules on offshore trusts appeared to close a “loophole” that had been used by “wealthy citizens to shield fortunes abroad”, reported Reuters news agency. 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, noting that it had observed a 20-percent year-on-year increase in average comparable hotel prices. The banking institution said its survey covered 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.