Macau casino revenue hits 2021 low, direct investment slumps in 2020

Casinos in Macau have seen their worst month of the year, reporting a 40% drop in gaming revenue for October. The news comes amid pandemic-related restrictions and the much-discussed gambling law review, which has cast doubt on the gaming enclave’s future operations, as tighter government oversight of the industry is expected.

Gross Gaming Revenue (GGR) has declined to $545 million versus 2020, according to the Gaming Inspection and Coordination Bureau. Revenue fell 26% from the previous month and was down 83% from the pre-pandemic level in 2019.

Operations have been affected by restrictions imposed by China during the last weeks after isolated Covid-19 cases have been reported. From September 25 to October 15, Macau entered a “state of immediate prevention”, including a series of countermeasures.

A quarantine requirement for people entering the mainland from Macau was still in place during the seven-day national “Golden Week” holiday, which starts on October 1, reports Bloomberg. Visitor arrivals during the said week were 95% down year-on-year.

On a more positive note, the number of visitor arrivals to Macau has been increasing steadily since late October: the enclave recorded 28,299 arrivals on October 26, the highest daily tally since late September. Currently, mainland China is the only place to have a quarantine-free travel arrangement with Macau.

On top of Covid-related restrictions, Macau is also facing uncertainties revolving around September’s proposal to review the enclave’s gaming law. Whilst the full scope of revisions to be introduced isn't clear yet, and no time frame has been given, it is expected operations and profit distribution to be more tightly controlled by authorities.

Along with the review announcement, a 45-day consultation period was launched, during which the industry and public were able to submit suggestions. Officials claimed during the period that a plan to send government representatives to monitor casino operators wouldn’t affect business operations. Further proposals include the increase of local ownership in the companies and approval of dividend payout.

The negative results posted by the casino industry in 2021 are an extension of similar hardships faced in 2020. According to figures released by the Statistics and Census Bureau (DSEC), direct investment in Macau’s gaming sector declined by 30% to $15.8 billion in 2020 versus pre-pandemic 2019. Additionally, casino gross gaming revenue shrank by 79.3% year-on-year in 2020.