Macau Casinos Seek Upturn after Worst Year Since 2004

January 3, 2023 | Financial

COVID-19 HAVOC: China’s reopening and Macau’s decision to scrap quarantine for overseas arrivals are expected to accelerate a rebound in the gaming sector

MACAU, SAR (January 2, 2023) — Macau’s casinos posted their worst year since 2004 as China’s strict “zero COVID-19” policies wrought havoc on the gambling hub, although a recent loosening of COVID-19 pandemic curbs is fueling optimism about a long-awaited revival in the year ahead.

The Gaming Inspection and Coordination Bureau yesterday said that gross gaming revenue last month fell 56 percent from a year earlier to 3.48 billion patacas (US$433.7 million), slightly below the median estimate of a 57 percent decline, analysts surveyed by Bloomberg said.

That took revenue for the full year to 42.2 billion patacas, down 51 percent from 2021 and far short of the pre-pandemic level of 292 billion patacas in 2019.

However, analysts predict a rebound this year, with a median estimate of 195 percent growth.

Gaming revenue has been declining since March last year as virus outbreaks and lockdowns in China — Macau’s biggest source of visitors — led to a tightening of outbound travel, and a crackdown on cross-border gambling saw tougher rules around issuing visas.

Revenue plunged to a record low in July, when the city was hit by a major flare-up that saw casinos shut for almost two weeks and prompted China to suspend quarantine-free travel.

Short-term headwinds remain after China’s abrupt U-turn on its “zero COVID-19” policy last month sparked a record wave of infections in China and Macau. Disruptions are set to drag on casinos until the Lunar New Year holiday later this month, Bloomberg Intelligence analyst Angela Hanlee said.

However, China’s reopening and Macau’s moves to scrap quarantine for overseas arrivals pave the way for a major rebound for casinos this year. Investors are bullish on the sector, pushing casino stocks to their best annual performance since 2017 on optimism about China’s reopening.

Casinos also face brighter prospects over the longer term. All six operators were recently granted new licenses for 10 years, with the decision removing a major uncertainty that had hung over the sector for much of last year.

SOURCE: Taipei Times.

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