A Jefferies Group expert suggests that Macau’s gaming sector may not rebound until 2023. This assessment arises as the industry confronts substantial obstacles stemming from the ongoing COVID-19 crisis and China’s stringent “zero-COVID” approach.
The global health emergency has led to severe limitations on travel and mandated closures of enterprises, particularly casinos, which have been severely affected. The repercussions on Macau’s financial status have been significant, with joblessness reaching its peak since 2009.
Data published by Macau’s Gaming Inspection and Coordination Bureau disclosed a staggering 95% year-over-year decline in gross gaming income for July, signifying the most substantial decrease since the pandemic’s onset. July’s earnings amounted to a mere 3.98 billion patacas (roughly $49.3 million), reflecting an 84% reduction compared to the preceding month.
Expert Andrew Lee forecasts that visitor volumes will stay low due to apprehensions of additional lockdowns and limitations, delaying a complete resurgence for Macau until 2023. This projection is more cautious than that of Ben Lee, a managing partner at IGamiX Management & Consulting, who, while recognizing the dismal July figures and anticipating a similarly grim August, anticipates a swifter recovery.
While casinos were granted permission to resume operations in July, they continue to function under stringent regulations, encompassing capacity limits on both personnel and customers. Travel between Macau and mainland China remains severely curtailed, significantly impacting the influx of guests and tourists.
Macaus gambling sector witnessed a steep downturn in the April-June period of 2022, as pandemic limitations continued to batter travel and leisure. MGM China’s earnings nosedived by almost half, while Melco Resorts & Entertainment confronted a nearly identical decrease. Studio City, a cinematically-themed destination also under Melco’s umbrella, saw its income descend into negative territory, recording a deficit of $1.9 million. The firm cautioned that the health crisis would persist in having a “significant negative influence on our operations, financial standing, and operational outcomes” throughout the remainder of the year.
