Macau gross gaming revenues (GGR) tumbled as much as 40 percent in October, typically the strongest month for the city’s casino industry, due to a Covid surge that reinstated border restrictions just before the popular Golden Week holiday.
Data from the Gaming Inspection and Coordination Bureau (DICJ) put revenues at MOP4.37 billion (US$544.5 million), the lowest figure this year. GGR was down 26 percent from September and 83 percent from 2019. The results make it virtually impossible for the city to meet its goal of gambling revenues of MOP130 billion (US$16.2 billion) for 2021, according to the Macau Daily Times.
In October, the city recorded the lowest Golden Week arrivals ever, with fewer than 8,200 visitors during the seven-day National Holiday, down 95 percent year-on-year. Average daily tourist arrivals amounted to 1,166, down 94 percent from 2020 and a bitter disappointment for the tourism industry.
Inside Asian Gaming reports that analysts are predicting a strong GGR recovery for Macau’s gaming operators in November, but ongoing COVID-19 outbreaks across mainland China are keeping them cautious on the sector.
The revenue plunge is unsurprising, given Macau’s zero-tolerance policy toward Covid-19 management. Following a minor outbreak in late September—four total cases—the government restored border restrictions between Macau and Zhuhai for the first 19 days of the month, and Zhuhai implemented a mandatory 14-day quarantine measure on all arrivals from Macau.
According to Sanford C. Bernstein analysts, the first week after the borders reopened on October 20 saw average daily traffic of 47,000, 9 percent higher than the September average and 75 percent higher than the August average.
The analysts estimating GGR in November to be down by more than 60 percent versus November 2019, for estimated revenues of MOP$7 billion (US$873 million) to MOP$8 billion (US$998 million).
“However, due to the new wave of Covid outbreaks in China, Macau has now imposed quarantine requirements on 21 cities/districts from 10 Chinese provinces,” the Bernstein team noted.
In other Macau news, the president of the Macau Civil Servants Association (ATFPM), José Pereira Coutinho, recently called on the city’s six gaming concessionaires to pay some of the government’s “fat bills,” including maintenance of the Light Rapid Transit line and a new hospital, and also pay 3 percent of gaming revenues to the residents of Macau.
“This [3 percent] should be attributed directly without passing through any public service or the Macao Foundation, as we know that the money which enters in the FM then is shared as they please and they award it more or less arbitrarily,” Pereira Coutinho said.
Meanwhile, any revisions made to the gaming law before the retender should aim to position Macau as Asia’s “entertainment city” and clearly define its role in the region, according to University of Macau Professor Glenn McCartney.
McCartney said Macau must expect the unexpected, including public health crises such as Covid-19, and also be prepared for new competition and changing consumption trends.
“The laws have to be articulated taking into consideration externalities,” he said. “That’s for the legal scholars to come up with, but you cannot ignore the downturn Covid-19 has created. The issues of competitive environment, the evolving China consumer as well as our visitor market, how do we develop an international destination where regional markets will come to Macau?”
