JP Morgan Predicts Recovery in Macau: but How Will the Mainland Acquiesce?

Published October 28, 2020 by Lee R

JP Morgan Predicts Recovery in Macau: but How Will the Mainland Acquiesce?

The latest assessment of the Macau economy clarifies the problems, with resolution the next hurdle.

Like many jurisdictions, and perhaps more than any other jurisdiction, Macau has to struggle to see the forest among the trees.

The Vital Gambling Industry

That's because in addition to being a former gambling hub, the island protectorate's entire economy is heavily dependent on the gaming industry.

New Upward Projections

However, investment giant JP Morgan Securities Asian branch is defining the forest with expectations of annual gross gaming revenues for Macau's 39 casinos to reach up to $36.58 billion--for 2022.

Recovery in 2022?

GGRAsia originally reported that the Hong Kong-based organisation made the projections official with a filing last week indicating an increase of 0.3% over 2019's $36.47 billion.

Macau's Struggles

While the assumption that the collapse is solely corona-related may be too narrow, Macau has nonetheless recorded six consecutive months of 90% year-on-year drops in GGR with the tally for Q1-3 down 82% lower year-on-year from 2019—down to a paltry $4.83 billion.

Barriers to Recovery

JP Morgan Securities clarified that the downturn during the pandemic has been exacerbated by “mounting uncertainty” in the VIP sector and delays in visa arrangements for mainland Chinese tourists.

Standard Struggles

Macau was in 2019 already engaged in a struggle to keep VIP junkets coming in and maintain tourist flow from China's mainland, but that standard tug of war dynamic was severely exacerbated when Covid hit.

Further Inconvenience

As of last September 23rd, residents of China have have been free to obtain Visas to travel into the island protectorate, but JP Morgan reports that the whole process has been made “much more inconvenient” as the validity of these permits is down to one week following a ten-day processing period.

Stigma Still a Factor

The permits are inherently difficult to obtain due to lingering gambling “stigma” discouraging many mainland Chinese from applying.

The Oversight

JP Morgan identifies a basic oversight in projections for Macau:

“We were overly hopeful on the prospect of pent-up demand, which we thought would outweigh the nuisances related to travel arrangement to Macau and stricter capital control.”


If JP Morgan's updated 2022 predictions for Macau's recovery are predicated on increased capital flow from Hong Kong to Macau--Macau's recovery still rests significantly in the hands of a mainland government famously oppositional to gambling.

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