Gaming | Experts hold mixed views on GGR prospects following revenue of MOP7.8b in December

Macau’s gross gaming revenue (GGR) declined by 65.8% to MOP7.82 billion in December 2020 year-on-year, according to figures released last Friday by the Gaming Inspection and Coordination Bureau (DICJ).
Even though the city’s GGR for December took a huge plunge, it represented the smallest drop since February 2020. The drop in GGR was 70.5% in November 2020.
The annual GGR for 2020 was MOP60.4 billion in total, representing a sharp drop of 79.3% from the figure of MOP292.5 billion that was recorded in 2019.
Bloomberg published a story on the same day following the DICJ’s announcement, saying that the city’s casino operators “end their worst year with little sign of recovery.” However, they added that the prospect of a rebound in the city’s GGR in 2021 is still possible.
In Bloomberg’s report, the drop in December’s GGR was “roughly in line with the median analyst estimate for a 68% decline.” The report also stated that analysts are expecting “solid gains” for Macau’s GGR in 2021 compared to the greatly truncated 2020 figures.
Sanford C. Bernstein expects the city’s GGR to rise to about 80% of 2019 levels, whilst analyst Vitaly Umansky is not expecting “a significant easing of bottlenecks in the near term.”
However, Ben Lee, a Macau-based gaming expert and managing partner of IGamiX Management & Consulting, told the Times earlier that he believes Macau will not be likely to reach the government’s annual GGR target of MOP130 billion in 2021, which is just 44.5% 2019 figures. He ascribed his forecast to a new amendment to China’s national criminal law that criminalizes anyone who “organizes [for] citizens of mainland China to participate in gambling outside the country (or border), which involves a hefty sum or cases with serious consequences.”
According to the official document, the new law will come into force on March 1, 2021. Wang Changbin, director of the Center for Gaming and Tourism Studies at the Macao Polytechnic Institute, told the Times that the law, by literal interpretation, could cover all places outside mainland China, including Hong Kong, Macau, Taiwan, and all other countries.
Lee said that China’s new law arguably acts as a deterrent to not only high-rollers, but also regular gamblers who come to Macau from mainland China. As a result, Macau’s VIP and premium mass sectors will be “severely depressed.”
Given the VIP sector often contributes the biggest share of the total GGR, Wang also added the new law could hinder Macau’s GGR as well as the overall economy.
Ricardo Sio, an associate professor at the University of Macau’s Faculty of Business Administration, told TDM yesterday that Macau’s GGR recovery will also bank on how Hong Kong’s Covid-19 situation fares in the future, as Hong Kong visitors, he believes, “can propel the gaming income growth of Macau.” Staff Reporter