Embattled casino sector suffers worst GGR in decades in July
The casino sector has suffered its worst month as gaming revenues tumbled 95% year-on-year in July due to the largest flare-up in Covid-19 cases the city has ever recorded from mid-June.
Data from the the Gaming Inspection & Coordination Bureau shows that gross gaming revenue (GGR) amounted to MOP398 million, the lowest since the 1990’s, according to a TDM report.
Analysts had predicted that Macau was poised for a 99% plunge in revenues, as Macau’s new wave of Covid-19 cases dealt a fresh blow to the crippled gaming sector.
July casino revenues suffered an 83.9% fall when comparing month-on-month.
“You are stuck in this zero-Covid situation where it’s unclear when the government’s actually going to do anything about it,” said Sanford C. Bernstein analyst Vitaly Umansky.
The analyst considered that border restrictions are constraining the city’s potential for recovery.
The gaming sector has long been suffering from a slump in revenues, as casinos burn millions of dollars of cash each day.
The industry has suffered a revenue slump, recording its worst losses in 18 months in April, when GGR was only MOP2.68 billion as Macau endured stricter border restrictions whenever fresh outbreaks arose in neighboring regions.
Meanwhile, the crackdown on junkets, which bring high-rollers to the city’s casino floors, are expected to hammer further the already depressed sector, as well as the fact that the clock is ticking, with their gaming licenses to expire in December 31.
To obtain a new license, casinos are set to undergo processes of tough scrutiny with the new gaming law – which gives power to the Chief Executive to terminate a concession if it is considered a threat to national security or to the security of Macau.
“The reality is, right now, there’s nobody in Macau,” Umansky said.
In early July, casinos closed for the first time in two years to curb the spread of infection, and gaming operators saw their stocks plunge by up to 8%.
Following the closure announcement, leading the stock market falls was Sands China, at an 8% decrease, while shares in Melco International, Wynn Macau, SJM, and Galaxy MGM China, dropped between 6% and 7%.
The public tender process for the issuing of the new licenses to operate casinos in Macau officially started last week and will continue until September 14.
The president of the new Commission for Gaming Licenses Tender and Secretary for Administration and Justice, André Cheong, said that Macau is to enter a whole new era for the local gaming industry, with different goals and purposes to those held in the previous 2001 tender.
One of the requirements is the expansion of the gaming sector into foreign markets, which is set to “bring a new era” to the city’s gaming sector.
