Calling Macau: the Difficult Times in what was Once Gambling's Most Fertile Region Continue

In Macau, another month of almost total drop-off year-on-year extends a forlorn string.

The most difficult Covid industry effect would have to be in the Macau industry, where the damage is almost complete, and hopefully not permanent.

The Drop

The numbers continue to tell the sad story in Macau, with the Special Administrative Region's (SAR) Gaming Inspection and Coordination Department reporting a revenue drop for July that is 3.5% down year-on-year.

Logistical Interference

The hit is absorbed in the gambling hub not just through direct shutdowns within the jurisdiction of one of the lowest reporting countries in the world, but because of secondary blows to China's economy and key sectors which would traditionally feed Macau's revenues logistically.

The environmental impacts include travel restrictions against crossing over from mainland China; visa restrictions against foreign tourist entry; less demand from the key junkets transporting groups of high rollers in and out of the island; and the trade war between China and the USA.

Revenues

As for more numbers in the month of July, Macau's gambling industry generated $3.04 billion in local currency value, which barely beat the previous month's total of $2.95 billion in local currency value, in a time in which a recovery is ardently needed.

GGR Tells the Tale

While the intake in the billions might sound substantial at face value, it belies the greater truth that translates to gross gaming revenue for July of $168 million, representing a staggering (yes you are reading right) 94.5% drop from 2019. Sequentially speaking, the loss is right in line with June's 97% drop and May's plummet.

Nothing to Celebrate

Hopes for recovery in time for a 20th anniversary celebration of Portugal's handing over the SAR on December 20, 1999 were re-ignited in July, when Guangdong province lifted quarantine requirements for Macau arrivals, but that comes off as but a drop in the ocean.

Policy Developments

That's because the only tangible benchmark visible is the targeting of August 12th for the reopening of borders to non-tourist visas, and the ones coming over the border to gamble require tourist visas.

Outlook

Only the full realisation of the most advanced stage of removal of visa restrictions can give Macau any realistic change of recovering in time for its independence anniversary—and in time to resuscitate the gambling industry.