Bloomberg | | Posted by Zarafshan Shiraz
Macau’s slowdown extended into September, with gaming revenue falling 49.6% as China’s snap lockdowns to control Covid-19 outbreaks discouraged tourists from visiting the gambling hub.
Gross gaming revenue dropped to 2.96 billion patacas ($366 million), according to data released by the Gaming Inspection and Coordination Bureau. The results were in line with the median analyst estimate of a 50% year-on-year decline, extending a slump that started in March.
- Revenue rose 35% from the previous month, but it was still down 87% from pre-pandemic levels in 2019.
Key Insights
- China has embraced lockdowns for their success in stamping out cases, with pressure to swiftly contain flareups building ahead of this month’s Party Congress, where President Xi Jinping is expected to secure a precedent-busting third term in power. While some of the recent shutdowns have been relatively short — Chengdu endured two weeks — others have lasted for 40 days or more.
- Macau’s six casino operators are also facing uncertainty around licensing. Their permits to operate in the only part of China where gambling is legal will expire at the end of the year. They are also competing with a newcomer, Malaysia’s Genting Group, for a maximum of six new licenses. The Macau government is expected to announce winning bidders by December.
- The sector has been buoyed by plans for China to resume issuing e-visas for people visiting Macau by early November, which would make it easier for travelers to obtain permits to enter the city. Tour groups will also be allowed to resume.
- October may also see an increase in tourism during China’s week-long National Day holiday, with analysts estimating just a 9% fall in Macau gaming revenue for the month. Still, it’s uncertain how many Chinese will take trips during the period, with authorities urging residents to stay put.
Market Performance
- The Bloomberg Intelligence index of Macau’s six casino operators rose about 9% in September, compared with a 14% fall in the Hang Seng Index.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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