With 2020 over, Macau has posted its worst year to date for the special administrative region’s casino industry.
Macau’s GGR Collapses to 79.3% YOY
Macau has turned the key on its worst year for gambling to date, with casino gross gaming revenue (GGR) plummeting by 79.3% year-over-year in 2020. All of that has been caused by the crippling effects of the pandemic, which forced shut casinos in the absence of Chinese and international tourists who left the city for months.
Traveling has not been yet restored in full and new data by the Gaming Inspection and Coordination Bureau (DICJ) released on Friday indicates that the special administration region is far from making a full recovery.
Going off these numbers, Macau generated approximately MOP60.44 billion in 2020, as opposed to MOP292.46 billion in 2019, a significant overall decrease. December alone saw GGR tumble by 65.8% year-over-year, the lowest rate of decline since January.
The number is line with the median 68% decline expected by analysts, and it’s slightly worse than November’s 71% drop. Yet, most observers, including JP Morgan, don’t seem to be panicking.
What’s Happening in Macau?
Macau has faced difficult times, and the recovery will be slow, estimate analysts. The key issue is that even though China relaxed traveling restrictions in October, players have not been returning to the city, because of what is a time-consuming and difficult process to obtain a permit.
Outside of that, not all players are too happy to specifically state their reason for visiting as gambling, something that sits bad with authorities. Yet, the long-term outlook is that the ease of restrictions should help boost Macau’s gaming recovery with the medium-term expectations bullish on a tangible recovery.
With a new strain of the virus in the United Kingdom, though, entering Macau is once again a little more challenging, and Chinese residents who have travelled to any country in the past three weeks won’t be able to enter the city for unspecified period.
The good news is Macau hasn’t reported a single case in over six months now, but the virus has reappeared in Hong Kong, China, and Singapore, and it has marched on in South Korea.
Recovery Should Begin Now
Despite the slowdown and painful recovery, analysts from Sanford C. Bernstein expect gaming revenue to start climbing back to 2019 levels, at least 80% of the results in January 2019.
However, JP Morgan Securities said on Tuesday that the increased foot traffic in Macau between December 23 and December 27 should not mislead investors to think that things are all working themselves out in Macau just yet.
In 2021, the city is planning to bid on various tourist initiatives, including sports events, to attract visitors back.