Macau Casinos See Worst Month of Year As City’s Future Debated
(Bloomberg) -- Macau casinos had their worst month of the year as the world’s largest gambling hub reported a 40% fall in gaming revenue for October, after a pandemic-induced travel halt and as uncertainties swirled over tighter government oversight of the industry.
Gross gaming revenue declined to 4.37 billion patacas ($545 million), the lowest monthly number this year, according to the Gaming Inspection and Coordination Bureau. That was still better than the median analyst estimate for a 42% year-on-year fall.
- Revenue fell 26% from the previous month and was down 83% from the pre-pandemic level in 2019.
- Macau casinos’ recovery was thwarted in October by tougher travel restrictions imposed by China -- the city’s biggest source of tourists -- after rare Covid-19 flareups in Macau. A quarantine requirement for people entering the mainland from Macau wasn’t lifted until Oct. 19 -- and encompassed the seven-day national “Golden Week” holiday that started Oct. 1, traditionally a peak travel season.
- Macau recorded just 8,159 visitor arrivals during Golden Week, down 95% year-on-year, according to government data. While tourists started to return after travel restrictions eased, a Covid resurgence in mainland China later in the month has now led the enclave to require quarantine for visitors traveling from 20 regions in nine mainland provinces, and added uncertainty to the tourism outlook.
- Hong Kong, the second largest contributor of visitors, announced it will resume a quarantine exemption for arrivals from Macau from Nov. 2. Still, Macau maintains its quarantine requirement for people traveling from Hong Kong, making the future impact on tourism to the gaming hub unclear.
- The biggest questions facing Macau still revolve around a Sept. government proposal to review its gaming law, which has triggered fear that casinos -- including their operations and profit distribution -- will be more tightly controlled by authorities. A 45-day consultation period, during which the industry and public were able to submit suggestions to officials on how to revise the rules, ended Friday. The government will finalize its plan after considering the suggestions, though no time frame has been given.
- During the consultation, officials maintained that a plan to send government representatives to directly monitor casino operators wouldn’t affect business operations. Other proposals to increase local ownership in the companies and approve dividend payout are meant to ensure operators focus on investment in Macau and use their profits to help the city diversify its economy, JP Morgan analysts led by DS Kim said in a note on Oct. 26. That suggests the government could be softening its tone to alleviate public concerns, Kim said.
- The Bloomberg Intelligence index of Macau’s six casino operators gained 10% in October, compared with the benchmark Hang Seng Index, which was up 3%.
- Oct. 21, Bloomberg Intelligence’s Macau Monthly Visitation Updates
- Oct. 19, Macau Casino Profits Expected to Plunge in Latest Quarter (1)
- Oct. 19, Zhuhai Lifts Quarantine Requirement for Macau Travelers
- Oct. 16, *MACAU TO REOPEN SOME LEISURE VENUES FROM OCT. 19
- Oct. 5, Macau to Shut Some Venues Like Gyms, Cinemas, Bars Oct. 6
©2021 Bloomberg L.P.