Casino woes: September revenues down 50% y-o-y
September has been another bleak month for the city’s casinos as revenues plunged 49.6% year-on-year to MOP2.96 billion, another blow to the sector as China’s lockdown continues across the country.
Although September’s revenue rose 35% from the previous month, the base in August was very low as the sector suffered in the wake of the travel halt caused by the city’s largest outbreak in
mid-June to July.
The results, however, were in line with the median analyst estimate of a 50% year-on-year decline, a slump that has continued since March. The results are down 87% from pre-pandemic levels in 2019.
Some cities in China are returning to lockdowns ahead of the Communist Party Congress later this month, where President Xi Jinping is expected to secure this third term in power.
Up until now, the mainland remains the city’s largest market.
Meanwhile, the sector is anticipating the resumption of group tours from mainland China, which are expected as soon as late October, along with the reinstatement of digital travel endorsement applications.
Tours will restart gradually from the provinces of Guangdong, Zhejiang, Jiangsu, Fujian and the municipality of Shanghai, with Guangdong being the frontier.
However, gaming analysts are less optimistic about their return as their spending power is not high and they have never been a major driver for the city’s casinos.
As gaming operators await to secure new 10-year licenses to operate casinos, which will be announced before the end of the year, analysts have expressed concern about cash burn rates in the gaming sector and are particularly doubtful of the ability of gaming companies to survive under harsh operating conditions.
The maximum number of gaming tables for all casinos in the city is capped at 6,000, while gaming machines will be capped at 12,000 from 2023.
The annual gaming revenue generated by each gaming table should be MOP7 million, while the minimum cap for the annual gaming revenue generated by each gaming machine is set at MOP300,000.
