Macau Gaming Revenue Recovery Slows Amid Travel Restrictions
(Bloomberg) -- Macau reported lower-than-expected gaming revenue for July as border relaxations with the mainland came under question following new Covid-19 flareups in China.
Gross gaming revenue rose 528.1% in July to 8.44. billion patacas ($1.05 billion), according to data from the Gaming Inspection and Coordination Bureau. That trailed the median analyst estimate for a 540.5% increase, the first time the figures have missed expectations in three months.
- Revenue increased 29.2% from the previous month and is down 65.5% from the pre-pandemic level in 2019.
- Progress in reopening the border with mainland China remains uneven. While Macau has removed quarantine requirements for visitors from the neighboring mainland province of Guangdong since July, a flareup of Covid cases elsewhere in China has triggered similar measures for Liaoning, Jiangsu and Sichuan and more stringent testing requirements for visitors arriving by air.
- Uncertainty also remains over when Macau’s border with Hong Kong will fully reopen; visitation from the financial hub that’s only a short ferry ride away is less than 10% now of what it was in pre-pandemic times due to quarantine requirements
- While gaming licenses for Macau’s six casino operators are due to be renewed by next June, Melco Resorts & Entertainment Ltd. Chairman Lawrence Ho said at a July analyst briefing that he wouldn’t be surprised if they were extended by another year or two as the government focuses on Covid-related matters.
- Anticipation is growing over further integration between Macau and the nearby mainland special economic zone Hengqin, a move that would have a mixed impact on the gaming industry. The extra land could be used to add hotel rooms to accommodate more middle-class visitors to Macau, but authorities will likely not allow casino building on Hengqin, said Bloomberg Intelligence analyst Angela Hanlee. That could limit the industry’s gaming growth.
- Gaming revenue is expected to reach a post-pandemic high in August during the summer school holidays, JP Morgan analyst DS Kim wrote in a July 19 note.
- The Bloomberg Intelligence index of Macau casino operators fell 16.5% in July. The benchmark Hang Seng Index was down 9.94% in the same period.
- July 20, Bloomberg Intelligence’s Macau Monthly Visitation Updates
- July 20, Macau Casino Profits to Stay on Recovery Path in Latest Quarter
- July 2, Macau Says No Specific Date on Hong Kong Border Easing
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