Casinos end their worst year with little sign of recovery

Macau’s Cotai Strip by night (Bloomberg)

Macau casinos ended their worst year on record with little sign of progress in a recovery, though hopes remain for a rebound in the world’s largest gambling hub later in 2021.

Gross gaming revenue fell 66% to 7.82 billion patacas ($979 million) in December from a year earlier, according to data from the Gaming Inspection & Coordination Bureau released today (Friday). That was roughly in line with the median analyst estimate for a 68% decline, and follows a 71% drop in November. Full-year revenue fell 79% to 60.4 billion patacas.

Key insights

• Macau is struggling to lure back players more than three months after China relaxed travel and visa curbs, as gamblers still find it tough to enter the city because of a difficult and time-consuming application process.
• Getting into Macau is actually getting more difficult, as the government tightened border restrictions because of a new strain of coronavirus that emerged in the U.K. Under the new policy, residents from Greater China who have been to any country within the past three weeks will be prohibited from entering the city.
• Macau hasn’t seen coronavirus cases in the past six months — one of the longest Covid-free streaks in the world — but it’s still at risk as infections are reappearing in Hong Kong and parts of mainland China with the onset of colder weather.
• Analysts expect a rebound this year. Monthly gaming revenue should show solid gains due to easy comparisons with 2020 figures. Sanford C. Bernstein sees gaming revenue returning to about 80% of 2019 levels, though analyst Vitaly Umansky doesn’t expect a significant easing of bottlenecks in the near term.

Market performance

• The Bloomberg Intelligence index of Macau casino operators rose 3.9% in December, paring its decline for the year to 11%. The benchmark Hang Seng Index added 3.4% for the month.

MDT/Bloombertg