Macau Experiences May Showers as Gross Gaming Revenue Plunges 93 Percent
Posted on: June 1, 2020, 12:01h.
Last updated on: June 1, 2020, 10:33h.
May was another brutal month for Macau, as gross gaming revenue (GGR) in the world’s largest casino center plunged 93.2 percent. Strict travel controls continue to hamper the Special Administrative Region’s (SAR) recovery efforts.
Earlier today, the Gaming Inspection & Coordination Bureau (DICJ) said the SAR’s six concessionaires posted combined May turnover of $221 million. The 93.2 percent decline topped analysts’ forecasts calling for a 95 percent drop, and was better than the nearly 97 percent plunge in April – a monthly record fall.
The results for May represent the eighth straight month of declining revenue, coming after Macau had already been battered by a two-year-long trade war and months of Hong Kong protests,” reports Bloomberg.
The dismal May GGR numbers arrive just a day after Macau’s statistics department said GDP there slid 48.7 percent in the first quarter, as visitor arrivals tumbled almost 69 percent on a year-over-year basis. The SAR derives about 80 percent of its economic output from the gaming industry, and the first quarter was the fifth straight in which the SAR’s GDP contracted.
June Travel Hopes
As the coronavirus gripped China earlier this year, Macau GGR slid 88 percent and 80 percent in February and March, respectively. Those figures had little room for improvement, as the SAR endures a slew of strict travel controls with vital regions, including mainland China, Hong Kong, and Taiwan.
Analysts are speculating some of the travel controls will be lifted, perhaps as soon as early this month, noting that Beijing’s freeze on the individual visit scheme (IVS) could be released soon thereafter. The IVS is the primary travel permit used by individual gamblers from mainland China, including high rollers, to enter Macau.
Data suggest VIP visits to the SAR are steady amid COVID-19 fears. But that hasn’t been enough for concessionaires to defray the loss of the usual flow of visitors and operating costs, which in some cases exceed $2 million a day.
Integral to Macau’s hopes of rebounding later this year are the lifting of quarantine protocols in the nearby Guangdong province. That’s the region of mainland China that’s closest to the gaming center, and one that delivers a significant percentage of VIP and premium mass market gamblers to the SAR.
Even if travel controls and the IVS halt are soon lifted, those are not guarantees that Macau GGR will rapidly rebound to pre-virus levels. Analysts say some would-be visitors are fearful of a second wave of COVID-19 cases appearing across Asia.
Macau hasn’t had a new confirmed case of the respiratory illness in weeks, and of its case count of 45, there haven’t been any fatalities.
Other potential problems facing Macau’s recovery efforts are China’s sluggish economy – the world’s second-largest – and heightened geopolitical tensions between Beijing and Hong Kong. China recently signaled a possible end to the “two systems, one country” policy that allowed Hong Kong to enjoy autonomy for more than two decades.