Macau Gaming Sector Faces Long Road to Recovery Amidst COVID-19 Restrictions

A Jefferies Group expert suggests that Macau’s gaming sector might not rebound until 2023. The COVID-19 outbreak has been catastrophic for Macau’s gambling establishments. The stringent travel limitations and mandatory shutdowns have had a significant impact. Joblessness is at its peak since 2009, underscoring the broad economic consequences.

Data published earlier this month revealed the severity of July’s impact on the sector. Total gaming income (GGR) plunged by 95% compared to the corresponding period last year. This represented the most substantial year-over-year decline since the pandemic’s start. July’s GGR was a mere 398 million patacas (approximately US$49.3 million), a dramatic 84% decrease from June.

Expert Andrew Lee highlights the apprehension surrounding stricter quarantine protocols as a primary deterrent for potential tourists. He posits that this will continue to hinder tourism, postponing a complete recovery for Macau until 2023. This projection is less optimistic than that of Ben Lee, a managing partner at IGamiX Management & Consulting. Ben Lee had foreseen a dismal July but anticipated some improvement in August.

Although casinos resumed operations in July, they are functioning under substantial constraints, including limitations on personnel and patrons. The most significant obstacle remains the restricted movement between Macau and mainland China, preventing casinos from experiencing anything resembling typical customer volume.

Macaus gambling sector suffered a significant decline in the second quarter of 2022, as COVID-19 limitations continued to severely impact travel. MGM China witnessed a 46% plunge in earnings, while Melco Resorts & Entertainment faced a 48% decrease. Studio City, a branch of Melco, was especially affected, posting a net deficit as income plummeted to under $1.9 million. Studio City cautioned that the pandemic’s consequences on its activities, financial standing, and future outlook would probably persist into the third quarter of 2022.