Macau sees gambling revenue drop 50% in August, but shows early signs of recovery after worst Covid outbreak ever

Macau’s gaming industry saw GGR drop 50.7% year-on-year to MOP 2.19 billion ($271 million) in Augustaccording to the latest data shared by the Gaming Inspection and Coordination Office (DICJ). However, last month’s figure has more than quintupled on a monthly basis compared to Julyas the gaming center finally begins to recover somewhat from its worst Covid-19 outbreak to date, and visitor arrivals are slowly starting to pick up again.

The city’s gambling industry faced a crippling outbreak from June 18, with first signs of recovery only beginning last month. Macau saw over 100,000 visitor arrivals from August 20-27, with a daily average of 14,737 visitors, an 18% increase from the daily average of 12,485 visitors between August 13-19, reports Macau News. By comparison, the city saw a daily average of just 315 visitor arrivals in July.

However, the recovery is far from fully established. Compared to pre-pandemic figures, Macau’s August GGR was down 91% from the same month in 2019.. The city’s GGR in the first eight months of this year is also down 53.4% ​​year-on-year to MOP28.86 billion ($3.6 billion), while it is down 85.4% from the combined GGR in 2019 before the pandemic.

Macau’s government has also taken a hit, after reporting a 37.1% year-on-year drop in revenue from direct gambling taxes in the first seven months of the year., according to figures retrieved by the cited source. This is particularly important for the city given that gambling taxes accounted for 66.2% of current government revenue between January and July.

Although August meant a marked improvement on July, tourists have yet to return in droves as many stay away for fear of being caught in the lockdowns. The month’s results were worse than analysts’ median estimate of a 47.5% year-on-year decline, extending a recession that began in March, reports Bloomberg.

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

Prolonged visitor drought has accelerated cash crunch at Macau’s six casino operators, which are bleeding millions of dollars a day. The continued decline in revenue comes as casinos submit bids to renew their operating licenses, with new 10-year terms starting in January. A new legal requirement unveiled in recent weeks introduces a minimum revenue threshold for operators for the first time, with companies being required to pay any additional sums if they cannot meet the stipulated sum.