Macau gaming revenue recovery slows amid travel restrictions
Japanese Prime Minister Shinzo Abe sees the integrated resorts as key to an economic and tourism windfall despite domestic concerns over gambling addiction. PHOTO: casino by AFP. Sketched by the Pan Pacific Agency.
MACAO, Aug 3, 2021, Bloomberg. Macau reported lower-than-expected gaming revenue for July as border relaxations with the mainland came under question following new Covid-19 flareups in China, Bloomberg reported.
Gross gaming revenue rose 528.1% in July to 8.44. billion patacas ($1.05 billion), according to data from the Gaming Inspection and Coordination Bureau. That trailed the median analyst estimate for a 540.5% increase, the first time the figures have missed expectations in three months.
Revenue increased 29.2% from the previous month and is down 65.5% from the pre-pandemic level in 2019.
Key Insights
- Progress in reopening the border with mainland China remains uneven. While Macau has removed quarantine requirements for visitors from the neighboring mainland province of Guangdong since July, a flareup of Covid cases elsewhere in China has triggered similar measures for Liaoning, Jiangsu and Sichuan and more stringent testing requirements for visitors arriving by air.
- Uncertainty also remains over when Macau’s border with Hong Kong will fully reopen; visitation from the financial hub that’s only a short ferry ride away is less than 10% now of what it was in pre-pandemic times due to quarantine requirements
- While gaming licenses for Macau’s six casino operators are due to be renewed by next June, Melco Resorts & Entertainment Ltd. Chairman Lawrence Ho said at a July analyst briefing that he wouldn’t be surprised if they were extended by another year or two as the government focuses on Covid-related matters.
- Anticipation is growing over further integration between Macau and the nearby mainland special economic zone Hengqin, a move that would have a mixed impact on the gaming industry. The extra land could be used to add hotel rooms to accommodate more middle-class visitors to Macau, but authorities will likely not allow casino building on Hengqin, said Bloomberg Intelligence analyst Angela Hanlee. That could limit the industry’s gaming growth.
- Gaming revenue is expected to reach a post-pandemic high in August during the summer school holidays, JP Morgan analyst DS Kim wrote in a July 19 note.
- The Bloomberg Intelligence index of Macau casino operators fell 16.5% in July. The benchmark Hang Seng Index was down 9.94% in the same period.
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