MACAU GAMING STREET WRAP: Weak Start to June Amid New AML Rules
(Bloomberg) -- Macau gross gaming revenue for June is tracking to fall from 2% to as much as 13% Y/y, according to four analyst estimates.
BERNSTEIN (Vitaly Umansky)
- Macau’s gaming regulator tightened anti-money laundering rules for casino, junket operators on May 13; weren’t previously published
- New set of rules more than doubles number of provisions included in AML instructions; didn’t change threshold of “large” transactions (500,000 patacas - $62,500) required for casinos to report to government authorities
CITI (Anil Daswani)
- Weak start to June perhaps driven by luck, poor weather
- Tightened anti-money laundering rule doesn’t have any impact on mass market business
- New rule another negative to “decimated” VIP business
CREDIT SUISSE (Kenneth Fong)
- Revised anti-money laundering rules to significantly increase documentation; should have limited operational impact
- New procedures will probably hurt small junkets which lack resources for compliance
- Disappearance of smaller junkets, which make up 25% of junket business, could slow VIP recovery despite better China liquidity
- Weaker June revenue due to telephone betting ban, seasonality, Euro cup
HSBC (Charlene Liu)
- June seasonally weak month for gaming rev.
- Poor weather conditions may have continued hurting casino traffic
- Sees short-term volatility for Macau gaming sector
- Prefers Galaxy Entertainment, MGM China
NOMURA (Richard Huang)
- Previous expectation of growth in June now seems unlikely
- More time needed to gauge whether softer performance during first week of June was because of recent phone-betting ban and implementation of new UnionPay terminals, or because of GGR volatility
- Still likes MGM China
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Vitaly Umansky (Sanford C Bernstein & Co Inc)
Anil Daswani (Citigroup Inc)
Charlene Liu (HSBC Securities Asia Ltd)
Kenneth Fong (Credit Suisse Holdings USA Inc)
Richard Huang (Nomura Holdings Inc)
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