COVID restrictions lead to sharp drop in gaming revenue in Macau
Macau’s gambling revenue fell significantly in August, with casinos in the former Portuguese colony making $ 554.5 million in August, according to figures released by the Gaming Inspection and Coordination Bureau.
On a year-over-year basis, this is an increase of 234%, but Macau’s gross gaming revenue has almost halved from July levels. Year-over-year comparisons are still a weak indicator to assess the health of the market, as it has still been stagnant since the COVID-19 pandemic a year ago.
The continuation of the pandemic was most likely the reason for the drop in income last month. According to a report by GGR Asia, financial analysts believe that measures taken by the Chinese government to prevent the spread of the Delta variant of COVID-19 was the main cause of the fall.
During the first three months of the month, measures were reapplied that were common to the region earlier in the pandemic. The ones that hurt business the most were travel restrictions and rules for moving between Macau and Guangdong province, which is a huge source of tourism for Macau. Tourists from Taiwan and Hong Kong were placed in quarantine, while other travelers from the mainland were required to test negative.
The warrants were put in place following the identification of four new cases earlier this month. This is the first recorded case for about 18 months. Fortunately, there have been no other confirmed cases other than the first four positive tests.
As a result, the number of daily visitors to Macau from the mainland has dropped significantly. It was ultimately one of the main factors that made August become the worst month for casinos this year.
“[August] should come as no surprise, given the well-documented travel restrictions and effective border closures, ”wrote a JPMorgan analyst.
Since the first four cases did not lead to a full-scale epidemic, many expect a rapid rebound. Especially with Golden Week, one of the most celebrated holidays in Chinese culture, which takes place in the first week of October.
Since the start of the year, Macau’s gambling operators have generated $ 7.7 billion in revenue, an increase of 70.1% from the first eight months of 2020. But it’s a massive drop from the $ 24.75 billion earned by casinos during the same period in 2019.