The world’s largest casino market appears headed for another catastrophic month with little hope of recovery until the Covid-19 pandemic shows signs of containment and travel from mainland China resumes at a normal or near-normal level.
Coming off year-on-year gaming revenue declines of almost 90 percent in February, when the industry was closed for two weeks, and almost 80 percent in March, Macau’s casinos could see revenue plunge 95 percent in April, and possibly worse, according to analysts.
Channel checks through April 5 indicated win market-wide was averaging MOP100 million a day (US$12.5 million), 98 percent below the average for the same week last year. The daily average for April 2019 was MOP786 million ($98.3 million).
JP Morgan Securities (Asia-Pacific) said in a note to investors it was possible Macau might book close to “zero” for the month.
Brokerage Sanford Bernstein concurred, stating that a “pickup in coronavirus cases leading to new travel restrictions in mid-March” had “plummeted GGR and visitation.”
Win could be down “closer to 100 percent if travel restrictions stay firmly in place,” the firm said.
It’s been more than two months since the Chinese government, acting to try to contain the spread of the virus, locked the country down and suspended individual and group travel visas, the two most popular means for mainland residents to enter Macau, where they comprise some 90 percent of annual gaming revenue.
The virus, which is believed to have originated in the Chinese city of Wuhan, has infected more than 80,000 on the mainland and claimed more than 3,300 lives, according to official statistics, though many international experts suspect the numbers are much higher.
In Macau, unlike neighboring Hong Kong, the spillover of confirmed infections stayed for weeks at a low of 10. Then the numbers began to increase in mid-March (they stand currently at around 45), prompting the local government to effectively seal off the territory from the rest of the world.
Entry is permitted only from China, Hong Kong and Taiwan, but no one from any of those jurisdictions who has traveled abroad is allowed in. Entrants from Hong Kong and Taiwan are subject to a mandatory 14-day quarantine, and returning mainland residents must undergo quarantine in neighboring Guangdong province. Ferry service from Hong Kong has been halted, as has traffic on the newly opened Macau-Hong Kong-Zhuhai bridge. Needless to add, flights into the city’s airport have been severely curtailed.
The city’s 39 casinos are open, but they’re operating under strict limits regarding the spacing of gaming tables and allowable seats per table, and patrons are subject to health checks when they enter and leave which, all in all, hasn’t been as burdensome as it seems considering that on some days during the first week of April fewer than 300 visitors entered the city.
Last year at this time, the city was welcoming well over 100,000 visitors a day. Total visitation in 2019 was 39.4 million, of which mainland China accounted for 70 percent.
