‘Firm recovery’ only in 2023 as gaming sector losses up to USD2b in first half
The gaming sector may only see steady recovery in 2023, says investment banking company Jefferies Group, as all gaming operators have reported revenue losses of up to 50% in the second quarter.
The forecast comes as low gaming revenue in Macau takes a heavy toll on the economy.
The crisis has caused rising unemployment, which is at its highest level since 2009, and the city has recorded its lowest revenue in July, the steepest fall in decades.
The casino sector has suffered its worst month yet as gaming revenues tumbled 95% year-on-year to MOP398 million in July due to mid-June’s Covid-19 flare-up, the largest number of cases the city has ever recorded.
According to Jefferies analyst Andrew Lee, Macau is unlikely to see a “firm recovery” until 2023. “We expect visitation to remain low in the near term on fear of quarantine,” he wrote in a note cited in a report by NikkeiAsia.
Figures from the Gaming Inspection and Coordination Bureau show the city’s gross gaming revenue for the second quarter has plunged to HKD8.2 billion, down 67% year-on-year and down 52% quarter-on-quarter.
Since January, the city’s big six have racked up losses as high as USD2 billion as the city adheres to a zero-Covid strategy which requires the border to remain closed to foreign arrivals.
“Due to the local Covid cases in Zhuhai, daily visitation cap into Macau and stringent 24-hour Covid test [required] to cross the border, the near-term gross gaming revenue recovery is still uncertain,” Vitaly Umansky of Bernstein wrote in an earlier research note.
