Macau sees gaming revenue down by 50% in August, but shows early signs of recovery after worst-ever Covid outbreak

Macau’s gaming industry saw GGR drop by 50.7% year-on-year to MOP 2.19 billion ($271 million) in August, according to the latest data shared by the Gaming Inspection and Coordination Bureau (DICJ). However, last month’s figure is up by more than five times on a monthly basis from July, as the gambling hub finally begins to somewhat recover from its worst Covid-19 outbreak yet, and visitor arrivals start to slowly pick up again.

The city’s gaming industry faced a paralyzing outbreak starting on June 18, with early signs of recovery beginning only last month. Macau recorded over 100,000 visitor arrivals from August 20 through August 27, with a daily average of 14,737 visitors, an 18% increase from the daily average of 12,485 visitors between 13-19 August, reports Macao News. In comparison, the city recorded a daily average of only 315 visitor arrivals in July. 

However, recovery is far from having fully settled in. Compared to pre-pandemic figures, Macau’s August GGR was down by 91% from the same month in 2019. The city’s GGR in the first eight months of this year is also down by 53.4% year-on-year to MOP 28.86 billion ($3.6 billion), while down by 85.4% from the combined GGR in pre-pandemic 2019.

Macau’s government has also taken a hit, having reported a 37.1% year-on-year drop in its income from direct gaming taxes in the first seven months of the year, according to figures retrieved by the cited source. This is particularly of importance to the city given gaming taxes accounted for 66.2% of the government’s current receipts between January and July. 

Even though August implied a marked improvement over July, tourists have yet to return en masse, as many stay away in fear of getting trapped in lockdowns. The results for the month were worse than the median analyst estimate of a 47.5% year-on-year decline, prolonging a slump that started in March, reports Bloomberg.

Although daily visitation has improved, visitors have been slow to return, even after China resumed quarantine-free travel with Macau in early August. Recent outbreaks in top Chinese tourist destinations, including Hainan, Tibet and Xinjiang, will also hurt travel sentiment in the near term among Chinese consumers, said Sanford C. Bernstein analyst Vitaly Umansky in a note retrieved by Bloomberg.

The prolonged visitor drought has accelerated a liquidity crunch at Macau’s six casino operators, which are bleeding millions of dollars a day. The continued revenue slump comes as casinos submit bids to renew their operating licenses, with new 10-year terms starting January. A new legal requirement unveiled in the last few weeks introduces a minimum revenue threshold for operators for the first time, with the companies mandated to pay any extra sum if they can’t reach the stipulated sum.