Macau casino revenues continuing to be hit by the coronavirus pandemic

Home » Macau casino revenues continuing to be hit by the coronavirus pandemic

The large collection of casinos in the Asian city of Macau reportedly saw their aggregated gross gaming revenues for June plummet by over 62% year-on-year to hit a 21-month low of just over $306.47 million.

According to a Friday report from Inside Asian Gaming citing official information from the enclave’s Gaming Inspection and Coordination Bureau regulator, the figure represented a decline of 62.1% year-on-year while being some 25.9% below the around $413.37 million recorded for the month of May. The source also detailed that the disappointing tally was the lowest since the about $273.44 million recorded for September of 2020 and came as a result of a raft of measures introduced to counter a recent local coronavirus outbreak.

Epidemic episode:

Macau is home to some of the planet’s largest and most prestigious casinos operated by MGM China Holdings Limited, Galaxy Entertainment Group Limited, Melco Resorts and Entertainment Limited and SJM Holdings Limited in addition to the local Wynn Macau Limited and Sands China Limited subordinates of Wynn Resorts Limited and Las Vegas Sands Corporation respectively. However, the former Portuguese enclave recently recorded its largest coronavirus outbreak since the early days of 2020 and is still purportedly dealing with a rumored 941 positive cases.

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Precautionary procedures:

Inside Asian Gaming reported that the reappearance of coronavirus led the government of Macau to shut down all public buildings and bring in multiple rounds of mass testing. The administration of Chief Executive Ho Iat-Seng moreover purportedly ordered the city’s six casino operators to keep 90% of their local employees at home from last Friday with the remainder working under strict public health and social distancing protocols.

Sizeable slump:

For its part and GGRAsia reported that the June result means that Macau’s aggregated gross gaming revenues for the first six months of 2022 have fallen by 46.4% year-on-year to stand at approximately $3.25 billion, which is the worst first-half performance since the roughly $3.18 billion chalked up for the same period in 2006. This source cited local casino industry veteran Kwok Chi Chung (pictured) as describing the current state of the city’s gambling scene as being squeezed on several fronts owing to coronavirus as well as new gaming legislation, junket closures and a range of public health-related travel restrictions.

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Kwok reportedly stated…

“The current coronavirus outbreak happened in the city at the same time we just began seeing the very beginnings of the recovery from the major infection spread in the mainland cities of Shanghai and Beijing. Now Macau only sees an average daily of hundreds of inbound visitors and this is very tough for the city when it looks to go mass gaming-centric.”

Optimistic outlook:

For its part and American investment bank JPMorgan Chase and Company reportedly used a Friday filing to assert that it currently looks unlikely any of Macau’s six licensed casino operators will generate positive first-half earnings before interest, tax, depreciation and amortization. Nevertheless, Alidad Tash from local gaming management consultancy 2NT8 Limited purportedly took an upbeat view in proclaiming that the long-term future now ‘depends on how soon quarantine restrictions on Hong Kong visitors’ are lifted.

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A statement from Tash reportedly read…

“If early, as in the third quarter, I could see a healthy boost based on pent-up demand, which would tip the balance in the second half’s favor. Any outbreak results in reduced demand so the answer depends on whether or not the current outbreak will continue over a six-month period. I doubt if this will be the case.”

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