Here's why July mass gaming revenue growth tumbled downhill

Hint: One is a popular sports event.

Macau’s mass table revenue growth in July slowed to just HK$10.3 bn, or a growth of 17% y/y, which is much weaker than the +27% y/y growth seen in June and the +35.6% growth in 1H14. According to a research note from Barclays, the firm spoke with a few operators to find out the possible reasons behind this slowdown.

Potential reasons include: The World Cup continued to impact the first two weeks of July.

Together with the onset of the summer vacation season, this could have interrupted travel to Macau.

The change of transit visa holders’ duration of stay from 7 days to 5 days, which was effective starting July, could also have had an impact.

Barclays believes the impact might not be that big from this reason, however, as the average length of visitor stays in Macau is only 1-2 days.

Here’s more from Barclays:

We estimate there was potentially a slowdown in Macau mass revenue growth of 3ppt in July due to the reclassification of SJM's premium mass revenues from the VIP segment into the mass segment starting July 2013.

This creates a higher base of comparison for mass table revenue growth starting July this year.

We believe that while the reclassification base effect should stay in August, we look for a rebound in August mass revenue growth (and overall GGR growth rate), now that the World Cup impact should have passed.

We highlight the possibility of downside risks to sector earnings if these weaker-than-expected mass growth trends continue into August, as mass growth not only drives top-line growth, but also margin improvement at operators.