Macau Gambling Revenue Nosedived in 2020

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Macau’s casino gross gaming revenue fell almost 80 per cent in 2020 amid disruption to travel and the economy caused by the coronavirus pandemic.

GGR Asia reports that data, released last Friday by the Gaming Inspection and Coordination Bureau revealed Macau’s GGR was US$7.57 billion in 2020, compared to almost five times that in 2019.

The year 2020 closed with December gross gaming revenue down 65.8 per cent from a year earlier, the lowest monthly rate of year-on-year decline since January.

The December tally was just under US979 million, up 15.9 per cent compared with the previous month.

Fourth-quarter data on the relative contribution to Macau GGR from the VIP segment versus the mass segment won’t be available until a later date.

From September 23, China’s Individual Visit Scheme exit visa system was fully reinstated for mainland residents wishing to visit Macau as independent travellers.

The return of IVS coincided with some improvement in Macau tourism numbers.

The mainland is currently the only place to have a travel bubble with Macau that is most-based on a quarantine-free approach.

In a Tuesday note, JP Morgan Securities Asia Pacific said investors in Macau gaming stocks should not view too enthusiastically the news that the daily average of Macau visitors during the December 23 to 27 Christmas season was greater than the daily average in either November or October.

Macau visitor volumes had “shown little” in the way of positive correlation with the city’s casino GGR in the past, stated the institution.

“December could mark the first month since April that fails to deliver month-on-month improvement in visitor volume to Macau, said analysts DS Kim and Derek Choi.

Macau and Vegas struggle as pandemic’s impact lingers

The coronavirus pandemic has decimated gambling revenue in Macau.

Yahoo Finance reported that in November, Macau gaming revenue is down 80.5 per cent in 2020 to $6.58 billion, according to the latest figures from Macau’s gaming bureau.

In November, Macau gaming revenue fell 70.5 per cent to $845.34 million, which was worse than the 65 per cent decline analysts expected, but better than the past six months, with each saw 90 per cent declines.

In June, Macau gaming revenue dropped 97 per cent year-on-year to $89.7 million, its lowest monthly gaming revenue ever.

The numbers have picked up since then, suggesting casinos there have seen the worst of the damage and are on their way back, though a recovery is likely to be very slow.

Located on the southern coast of China and a one-hour ferry ride from Hong Kong, Macau is the world’s largest legal casino destination by revenue, bigger than Las Vegas.

The city is home to 41 casinos as of 2019, and only three US casino companies have properties there – Las Vegas Sands, MGM and Wynn.

In February, Macau’s government forced casinos to close for two weeks and they reopened with masks and social distancing on February 20.

Nevada closed casinos for far longer, 78 days, starting in mid-March and reopening on June 4.

Macau hit harder than Vegas

Despite reopening sooner, Macau has been harder hit by the pandemic than Vegas.

Nevada statewide gaming revenues were down 36.5 per cent through October and in the month of November, they declined 19.5 per cent year-on-year, the lowest monthly drop since the start of the pandemic in the United States.

Analysts predict it will take well into 2021 for casinos in the United States or China to return to pre-pandemic levels, since the biggest question mark is customer comfort.

The pandemic’s hit to physical casinos comes at a time when sports betting tech companies in the United States have surged, taking advantage of states legalising sports betting and bettors being stuck at home.

William Brown

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