April 13, 2020 3 min read


Nomura Predicts Macau GGR Slowly Returning to 2019 Highs, Not Until 2022 Though

The casino gaming industry suffered its first major blow in February, when a major casino jurisdiction, Macau, was forced to shut down operations for 2 weeks to contain the spreading like wildfire coronavirus in mainland China. Since then, casinos started recovering but getting back to the state where they were before the virus crisis struck will be a slow process, an analysis from Nomura Instinent suggests.

Macau Still Sinking

In a recent note sent to clients, the analysts of Nomura Instinent, a research, trading and data analytics for institutional investors and security traders provider company of Nomura, project the second quarter of 2020 gross gaming revenue /GGR/ in Macau to plummet 80%. Q3 GGR is also estimated to be down, but at least the rate of slide is slowing a bit, 65%, while for the last quarter of the year the analysts expect an improvement, albeit an incremental one.

The projected numbers in terms of GGR are more or less in line with the registered plunge of 88% in February, after the longest ever closure of casino operations happened during the month. It was in fact only the second instance of closing casinos, the first being a 33-hour shutdown of operations due to a typhoon in 2018.

Regarding the expectation for improvement during Q4, Nomura Instinent analysts see it restrained due to the enforced travel restrictions and the possibility of a second wave of the disease. China governments ceased issuing individual visit scheme /IVS/ visas to the Special Administrative Region, the status of Macau, but without the traffic from mainland China, casino operators have no chance of restoring their pre-crisis revenue levels.

Travel Restrictions Must Be Lifted

As the IVS was the travel permit type many gamblers used to enter the gaming hub from mainland China, restoring the issuance of this type of visas will be vital for Macau, something the analysis counts on to happen for 2021, projecting the first significant rebound in the industry’s GGR.

“We believe that GGR can recover to $22.6bn, or roughly 62% of the 2019 level if the reinfection rate is low. To achieve this number, IVS needs to expand to larger, more distant provinces, mass and group visitors must have confidence in health screening protocols at the borders, and social distancing policies on casino floors should be relaxed, thus increasing the number of operational gaming positions during peak periods.”

Harry Curtis, Analyst, Nomura Instinent

The Nomura analysts do not eliminate entirely to possibility of even a bigger rebound in the gaming industry in Macau, but only if a vaccine for the disease is invented.

For 2022, however, the analysis projects almost a complete recovery, 90% of 2019 highs. Returning to pre-crisis gaming revenues is highly dependent on borders, IVS and casino operators all returning back to normal.

Lead Editor

Mike made his mark on the industry at a young age as a consultant to companies that would grow to become regulators. Now he dedicates his weekdays to his new project a the lead editor of GamblingNews.com, aiming to educate the masses on the latest developments in the gambling circuit.

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