According to the Gaming Inspection and Coordination Bureau, Macau’s gaming revenue has hit an all-time low; their worst month ever since records began in 2009. Data shows gross gaming revenue fell 95% to 398 million patacas ($49 million) in July, 98% lower than pre-pandemic levels.
Macau’s casinos reopened on July 23, after a nearly two-week shutdown mandated in an effort to stop the spread of Covid-19. However, without tourists, business was slow for the gaming venues.
As per the announcement, authorities will further relax social-distancing rules from Tuesday, allowing venues such as bars and gyms to reopen and dining-in services at restaurants to resume. Still, as previously reported, patrons will need to show a negative nucleic acid test result to enter those venues.
Despite government efforts to reduce covid-related restrictions, China’s extended suspension of quarantine-free travel is expected to keep discouraging visitors. City authorities want infections to hold near zero to bolster the case for reopening the border.
The downturn has already made the city lose its title as the top gambling hub to Las Vegas. And China’s strict adherence to Covid Zero policies like lockdowns and movement curbs, which have become increasingly challenged in the face of highly transmissible variants, portends more pain to come.
“You are stuck in this zero Covid situation where it’s unclear when the government’s actually going to do anything about it,” said Sanford C. Bernstein analyst Vitaly Umansky. Border restrictions are constraining the potential recovery for Macau, he said, as reported by Bloomberg.
Although China also suspended quarantine-free travel with Macau for months in 2020, the city’s junket operators, which provided services and credit to high-rollers, were still bringing in some customers, said Umansky.
But that industry has been largely dismantled since late last year when China began its campaign against illegal gambling activities that facilitated capital flight, which saw two of the enclave’s top junket bosses arrested. “The reality is right now there’s nobody in Macau,” Umansky said.
According to analysts, it could take weeks for visitation numbers to bounce back. Experts have also predicted that any recovery in gaming revenue would most likely not happen until the end of the third quarter or during the fourth quarter, as it takes time to rebuild confidence among customers. They may choose not to visit, fearing future curbs on any recurrence of local infections, Credit Suisse analysts including Kenneth Fong wrote in a note Monday, according to Bloomberg.
China’s tightening control over frequent gamblers traveling to Macau would also continue to depress gaming revenue this year, Fong said, expecting any meaningful improvement to come only in the first quarter of next year.
A Bloomberg gauge of Macau’s six gaming operators fell 1.1% on Monday, taking this year’s slump to 18%. Casinos’ dollar bonds rose further on Monday, extending an advance.
Las Vegas Sands‘ Macau operations posted a loss of $110 million before interest, taxes, depreciation, and amortization in the quarter through June, which doesn’t capture the shutdown. That compares with a profit of $132 million a year earlier and $765 million in 2019. Its Singapore gaming resort reported $319 million in EBITDA, which is 92% of pre-pandemic levels.
While other casino operators in Macau haven’t reported their results yet, analysts surveyed by Bloomberg estimated the industry could see a combined loss of about $500 million for the last quarter. In the first six months of this year, the city recorded $3.3 billion in gaming revenue, compared with $4 billion for the Las Vegas Strip. Before the pandemic, the Chinese territory’s gambling market was six times the size of the popular Nevada city.
Original article: https://www.yogonet.com/international/news/2022/08/01/63645-macau-casino-gaming-revenue-hits-alltime-low-in-july-collecting-only–49m-amid-covid-restrictions
