Casinos in Macau continue to suffer, a report of the Gaming Inspection and Coordination outlined. Gambling revenue in the Special Administrative Region (SAR) dropped again in July, 3.5% year-on-year, due to a slowdown in the Chinese economy, travel and visa restrictions and tempered demand for gambling from high-rollers, as well as the trade war between China and the USA.
The gambling industry in Macau generated in July the equivalent of $3.04 billion in local currency, missing market estimated range of between 3% drop and 3% rise, and just slightly above the amount generated the month before, the equivalent of $2.95 billion.
GGR Continue to Plunge
Gross gaming revenue in July was only $168 million, a 94.5% drop from the year before. GGR fell 97% in June and 93.2% in May and the sustained plunge in the gambling industry is threatening to derail growth in the SAR amid celebrations of its 20th anniversary since handover from Portuguese rule.
The expected recovery in the gaming industry of Macau is stalling due to several main factors, among which the imposed travel restrictions from mainland China. Shutting the borders to prevent the spread of the virus infection prevented not only casual gamblers from reaching the SAR’s casinos, but also high-rollers. Additional headwinds from the weakened Chinese economy should also be taken into the equation, as well as the political tension and ongoing trade war between China and the United States.
The first step towards easing was made in July, when the province of Guangdong lifted quarantine requirements for Macau arrivals, a move in the right direction, yet not enough to bring back players in the casinos due to visa restrictions.
Non-tourist visas are expected to be resumed August 12, yet it is the tourist visas that are needed to open up travel lanes. Macau officials expect it to be a gradual process as they keep in touch with mainland China authorities on the matter, painting a brightening outlook for the casino industry in the SAR.
Regarding the issue of high-rollers, a state-backed report pointing the finger at the SAR’s biggest junket operator, Suncity, seems to make the situation even worst. The report singled out the hospitality company for inducing harm to China’s social order by raking billions from online gaming and proxy betting.
Suncity operates 18 VIP gaming clubs in Macau and is the main attractor for high-stake players for the casinos in the SAR. All 6 casino operators, Sands China, Wynn Macau, MGM China, Galaxy Entertainment, SJM Holdings, and Melco Resorts rely on the cooperation with the junket company to attract high-rollers for their casinos.