Macao Casinos Feel Bite as Typhoon Matmo Makes South China Landfall

Macao casino stocks are experiencing a turbulent start to the month, with Typhoon Matmo wreaking havoc on gamblers’ travel plans.

On October 5, officials in Guangdong Province warned that Typhoon Matmo had made landfall on Mainland China, bringing with it a high risk of flooding and landslides.

China’s Jimu News reported that meteorologists have recorded wind speeds of 42 meters per second.

Sands China saw share prices fall by 2.3% on October 3, with rival Macao casino operator Galaxy experiencing a 1.82% drop.

Typhoon Matmo: Macao Casino Operators Set to Lose Out

Matmo has already caused traffic chaos across much of Mainland China, with many would-be Macao visitors now set to stay away.

Some coastal communities have been evacuated, including many on the island province of Hainan. Officials also evacuated around 26,000 tourists from resorts on Weizhou Island, in the Guangxi Zhuang Autonomous Region.

Officials noted that arrivals in Macao during the first two days of the so-called Golden Week holiday period have already proved disappointing. Many Chinese firms have allowed their staff to take a break for the entire period from October 1 to October 8.

However, on October 1, Macao officials said gross gaming revenues for last month rose 6% year-on-year.

Last month’s revenues hit the 18.3 billion patacas ($2.3 billion) mark, the regulatory Gaming Inspection and Coordination Bureau said.

That made for an eighth consecutive month of growth for Macao casino stocks, which have been booming in recent months.

However, this figure fell short of the more optimistic predictions of analysts. Some had predicted growth figures as high as 9%.

But financial experts also warned of a possible drop-off in future figures. They noted that September also saw a “transitional period between the summer vacation and Chinese National Day holidays.”

As such, they added, “sales fell by nearly 20% compared to August.” The Japanese newspaper Nihon Keizai Shimbun (Nikkei) reported that Morgan Stanley said the decline was “merely seasonal.”

The firm added that sales figures could continue to feel the effect of this “transitional period” until the final quarter of the financial year.

Mainland Chinese Visitors Still Keen on Macao

Observers had claimed that an extended October holiday in Mainland China could spur October revenues.

And Macao officials noted that demand from Mainland China, the region’s main customer base, is continuing to recover, in spite of the typhoon and the September lull.

Higher foot traffic figures for Golden Week were also forecasted in South Korean casinos, most of which rely heavily on Chinese visitors.

But the typhoon is likely to cause further disruption in the days ahead, weather forecasters claimed. They said Matmo would sweep west across Southern China until October 7.

However, they claimed that wind speeds would fall sharply in the days ahead, dropping to around 15 meters per second by the time Matmo reaches Tibet.