Lusa, the Portuguese-language news agency that seems to act as the unofficial breaker of stories on behalf of Macau’s gaming regulator, has scooped the opposition again. Lusa revealed that Macau’s gross gaming revenue (GGR) for games of fortune in November actually rose 2.6 percent year-on-year.
This reversed two months of year-on-year decline that began in September.
The revenues reached 7.55 billion patacas in November according to the unofficial data from the Macau Gaming Inspection and Coordination Bureau,
The September and October falls were starting to look like a trend and were widely attributed in the media to the impact of the Chinese government’s visa restrictions.
Commentators are now talking about the fact some of Macau’s junket operators expanded operations so quickly during the VIP boom of the last 18 months that they may have broken their own golden rule: know your customer.
Any failure to follow this simple but fundamental piece of wisdom is said in junket circles to increase dramatically the risk of bad debt. Combine this with possible liquidity issues for the junkets themselves and that’s a real sign of a global credit crunch if ever there was one.
The South China Morning Post reported recently that Las Vegas Sands Corp’s net accounts receivable, which are mainly gaming debts, rose 78 percent to USD333 million between the end of last year and September.
The newspaper added that Galaxy Entertainment Group’s receivables from ‘other debtors’, mainly junkets, increased 91 percent to HKD667 million at the end of June compared with six months earlier; SJM Holdings’ total receivables rose 28 percent to HKD1 billion during the same period.
So what, if anything, does the November GGR tell us about the state of the Macau market? Probably not very much—yet.
The modest year-on-year growth for November pales in comparison with the stellar 45.2 percent year-on-year growth in GGR seen in the first eight months of 2008. November’s figures, although moving in the right direction year-on-year, were still 15 percent down month-on-month compared with October this year.
November is though traditionally a quiet month. This is when the region’s gamblers prepare for a flurry of spending in the run up to Chinese New Year. It’s also a time when all Chinese traditionally pay off outstanding debt and square their account with the forces of luck and good fortune. The junket and casino operators will be hoping that is one tradition that modern Macau will not forget.
