Macau’s Gaming Revenue Shows Signs of Life, But Remains Far From Pre-Pandemic Levels
Macaus financial state exhibited signs of revival in October, but its earnings remain significantly diminished by 85% in comparison to 2019.
Macau displayed early indications of a rebound in October, with net gaming income reaching 3.9 billion Macau patacas ($481 million/£417 million/€484 million), a mere 10.7% decrease from the total for 2021.
Macau’s income in October demonstrated signs of recovery, yet it still lags behind by 85% compared to 2019. This contrasts with the 2.96 billion Macau patacas reported by the special administrative region in September, which was 49.6% lower than the total for 2021. This signifies a 31.8% increase in earnings month-to-month. However, even this modest resurgence remains 85.3% lower than the 26.4 billion Macau patacas revenue in October 2019 before the pandemic.
The ongoing recovery in monthly income may be a consequence of the relaxation of COVID-19 regulations during the month. The former Portuguese territory had not recorded a case for over three months until Sunday, when an outbreak occurred at the MGM Cotai hotel and casino.
Since then, the City of Dreams has been placed under lockdown, with guests and staff prohibited from departing until the quarantine period concludes. Furthermore, all 700,000 residents of Macau are expected to undergo rapid flow tests on a daily basis.
The city has also eased visa requirements from today, enabling mainland Chinese citizens to submit applications through an online system – instead of needing to apply in person as they have been doing since the outbreak.
The fresh rules will enable collective travel permits, clearing the path for the return of organized travel groups.
Edmund Ho, the head of Macau’s executive branch, projected that daily visitor counts could subsequently climb to 40,000 when the regulation was revealed.
However, the new travel document policy has a built-in “circuit breaker” mechanism that will suspend the new rules if a fresh COVID-19 outbreak occurs – meaning the policy could be halted if the current outbreak widens.
**Unpredictability**
The ongoing situation has prompted Robert Goldstein, head of Las Vegas Sands, to emphasize the unpredictability in the city’s gambling industry during the company’s third-quarter earnings call:
“I believe we should exercise caution,” he stated. “The projections for Macau over the past few years have been inaccurate because we are unsure who will arrive, and we are unsure when they will shut down the market. It has been closed for an extended period. It is somewhat foolish to discuss precise EBITDA earnings.
“Can we achieve profitability in terms of EBITDA? Absolutely. If it opens tomorrow and people return, we will be profitable. It will occur eventually. But I believe it is difficult to tell you if we will be EBITDA profitable in the fourth quarter, without knowing the effect of the tour groups in November, and without knowing how the “zero-COVID” policy will be implemented. Therefore, there are numerous unknowns in Macau, and it is challenging to speculate.”
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