Macau’s August GGR To Fall By 89% as Casinos Remain Dependent on Locals

Summary

• Analysts say Macau casinos will still record low GGR in August
• The gaming sector still largely relies on local customers as travel restrictions continue
• Gradual border reopening won’t take place until at least fall or winter

Macau’s gaming sector remains heavily reliant on locals and gross gaming revenue (GGR) for August is expected to suffer a significant decline when compared to the figures recorded in 2019, just before COVID-19 hit.

Investment research and institutional asset management firm Sanford C Bernstein Ltd has provided its latest analysis of the city’s gaming industry following a recent rise in COVID-19 cases which resulted in the government implementing a city-wide lockdown for nearly two weeks.

While casinos have since reopened, with travel restrictions with mainland China also eased, tourist numbers remain relatively low and gaming venues still largely depend on the domestic market. Hence, the brokerage is predicting Macau’s August GGR to fall 89% from pre-pandemic levels to just MOP2.67 billion (US$330.1 million). That compares to the MOP24.26 billion recorded in August 2019.

Macau casinos generated MOP36 million in GGR during the first week of August this year, a week-on-week increase of 26%. Sanford C Bernstein attributes that improvement to the reopening of borders with mainland China since last week. However, GGR for the entire month will still be dependent on local customers, the firm said.

Travel Restrictions Continue

Those travelling from Macau to Zhuhai city in Guangdong province are now no longer required to undergo the mandatory seven-day quarantine, but between now and September 8, most travelers would only be allowed to have one daily outbound trip to the neighboring city, and one inbound trip to Macau, as Zhuhai still deals with COVID-19 infections.

Macau would not be getting that many visitors from Hong Kong anytime soon as daily COVID-19 cases in the special administrative region remain high which has resulted in the continuous delay of the reopening of its border with China.

Sanford Bernstein said travel restrictions will likely continue until at least fall or winter. Hong Kong accounts for about 15% of the gaming business in Macau. The Hong Kong-China reopening should come first, followed by a gradual reopening with Macau, the brokerage added.

Ongoing cross-border travel restrictions have been a major factor in the decrease in GGR at Macau’s casinos. The government began imposing the measures back in June when a fresh wave of COVID-19 cases began to sweep through the city. With leisure trips disrupted, tourist numbers also dropped significantly, resulting in record-low GGR.