Macau Recovery Continues, as Gross Gaming Revenue Improves in October
Posted on: November 2, 2020, 09:10h.
Last updated on: November 2, 2020, 09:38h.
Macau’s gaming industry continues to show signs of life in the wake of COVID-19. But the six licensed casino operators nonetheless still have a way to go before returning to pre-virus normalcy.
Gross gaming revenue (GGR) totaled 7.27 billion patacas ($910 million USD) last month, a 72.5 percent decrease compared with October of 2019. October marked Macau’s 13th straight month of year-over-year GGR decline.
However, the 72.5 percent was an improvement on the previous six months, which all saw gaming win tumble more than 90 percent. October’s GGR total was more than three times what the industry pulled in during September.
Year to date, Macau’s casinos have won $5.75 billion of gamblers’ money. That’s $25 billion less than what the operators had won through 10 months of 2019.
Several gaming industry analysts focused on Asian markets expected a steeper year-over-year gross gaming revenue falloff in October. Citigroup forecasted a 77 percent decline, while JPMorgan and Bernstein were closer at 73 percent.
October’s GGR numbers beating expectations has caused some optimism on Wall Street. The three US-based casino giants that are invested in Macau — Las Vegas Sands, MGM Resorts, and Wynn Resorts — are all trading higher today.
As of trading around noon, Sands is up two percent, MGM 1.75 percent, and Wynn 3.5 percent.
Toward the end of October, the number of visitors increased. But it’s still far away from our normal level,” said Joe Liu, director of Macau Pass, the city’s largest e-payment company.
October benefitted from the annual Golden Week holiday, as well as the resumption of the Individual Visit Scheme (IVS). The visa program allows people in mainland China to come and go to the gaming enclave without quarantining on either end.
Mainlanders must apply for and receive a visa at a Public Security Bureau immigration office. Self-service kiosks remain offline for the time being, and only over-the-counter applications are being accepted.
Viruses and Visas
The IVS program came as a result of the Severe Acute Respiratory Syndrome (SARS) outbreak in Hong Kong that ran rampant from March to June of 2003.
SARS turned out to be a relatively rare disease, the World Health Organization confirming only 8,098 confirmed cases and 774 deaths. Regardless, SARS greatly reduced travel to Hong Kong, which, along with Macau, is China’s other Special Administrative Region.
IVS was designed to boost the economies of both SARs. Some 17 years later, IVS is now expected to play a critical role in Macau’s recovery. But with a much deadlier and contagious disease, analysts aren’t overly confident in that happening soon.
In a recent note, JP Morgan forecasts that Macau casinos will not experience pre-COVID-19 gaming revenue until 2022. It isn’t entirely COVID’s fault.
The Chinese government in Beijing is on a crusade to better limit the cross-border flow of money that is used to gamble. One of the ways China President Xi Jinping’s administration is doing that is by limiting VIP gamblers’ ability to move money into off-mainland junket accounts.
China is also expected to pass a law early next year that will impose prison sentences of up to 10 years for anyone found guilty of facilitating the transfer of money from the mainland to international casino floors.
Related News Articles
Related News Articles
January 5, 2022 — 7 Comments—
December 9, 2021 — 5 Comments—
December 30, 2021 — 2 Comments—