Gaming revenue plummets in Macau
Gross gaming revenue in the gambling city of Macau has tumbled in April.
Casino.org reports that GGR fell 96.8 per cent in April.
That is in light of continued travel bans due to the spread of coronavirus.
Macau’s six concessionaires combined to generate turnover of $94.68 million in April.
The 96.8 per cent decrease, one of the worst on record, follows declines of almost 88 per cent and nearly 80 per cent in February and March.
Analysts were expecting an April contraction of 95 per cent.
Macau casinos were shuttered for 15 days in February in an effort to prevent the spread of coronavirus.
It’s a gambit that’s been mostly effective on that front, but one that is playing a pivotal role in punishing 2020 GGR.
“The 97 per cent drop should not be a surprise to anyone, given the Macau market remained essentially shut down during the month,” said Stifel analyst Steven Wieczynski in a note provided to Casino.org.
“While the casinos were opened for part of April, play levels and visitation remained depressed.”
There is talk that provinces vital to Macau’s numbers, namely Guangdong and Fujian, are mulling relaxation of some travel restrictions.
Until that happens, it is likely May will be another brutal month.
“We are assuming May 2020 will show a 70 to 80 per cent drop in total GGR.
If that’s the case, and we are even remotely close, we will expect that second quarter data would end up showing a 70 to 80 per cent drop in GGR, year on year,” Wieczynski said.
Guangdong, China’s largest province by population and the one closest to Macau, has a 14-day quarantine protocol in place that’s enforced on any visitor to the region, regardless of where they are coming from.
Analysts view that policy as a major roadblock for Macau’s recovery efforts.
Additionally, there’s little visibility as to when Beijing will lift a freeze on the individual visit scheme.
The IVS is the primary source of visas used by individuals from the mainland to travel to the gaming centre.
Removal of that ban is integral to Macau’s success, because gamblers using the VIS are typically VIPs, not mass market.
With little visibility as to when IVS restrictions will be lifted and when Guangdong will halt its quarantine policies, analysts are saying it’s difficult to forecast what the rest of this year has in store for Macau.
They merely know it’s going to be bad, and the fourth-quarter recovery concessionaires and investors were hoping that could be delayed until 2021.
“Looking out into the remainder of 2020, we are now forecasting a GGR drop in a range of 40 to 50 per cent, versus our previous estimate of 35 to 45 per cent,” Wieczynski said.
“Trying to model out the rest of 2020 remains pretty much impossible right now.”
Macau keeps casinos open for social impact – expert
An industry consultant has suggested to GGR Asia that the reasoning for keeping Macau’s casinos open amid the ongoing coronavirus pandemic is now “social” rather than commercial.
The local tourism and casino sector have faced growing challenges in light of many layers of travel restrictions imposed by Macau and by governments outside, in order to combat the spread of the novel coronavirus and its associated infection.
Authorities in Macau’s neighbouring mainland province, Guangdong, implemented a 14-day quarantine treatment for people entering from Macau and Hong Kong.
Guangdong authorities said in a Thursday statement that the province would start requiring all travellers coming from outside China to undergo a 14-day quarantine at designated facilities, and to take a test checking for coronavirus infection.
Such conditions apply to people from Guangdong that have visited Macau and wish to return home.
Earlier this week, the Macau authorities announced more stringent entry limits for visitors arriving from mainland China, Hong Kong and Taiwan.
The latest round of travel restrictions has further depressed visitor arrivals to Macau.
According to the city’s Public Security Police, Macau received fewer than 250 visitors on Sunday.
In 2019, the statistical daily average was about 108,000 tourist visits per day, based on the year’s 39.4 million arrivals reported by the Statistics and Census Service.
Casino industry consultant Ben Lee, managing partner of IGamiX Management and Consulting said: “With the mainlanders and Hong Kongers now effectively barred from entering Macau, the only rationale possible for keeping the casinos in Macau open right now is a social one, which is to keep Macau residents employed.”