Macau gaming revenue suffers record plunge from virus blow

Casinos in Macau reported a record drop in gaming revenue, as they grappled with the cost of closing down their businesses for 15 days to help contain the deadly coronavirus outbreak.

Gross gaming revenue was 3.1 billion patacas ($386.5 million) in February, down 87.8% from a year earlier, according to data from the Gaming Inspection & Coordination Bureau. In a survey, analysts had predicted a median 90% slide.

The slump follows a decision by Macau’s government to suspend casino operations from Feb. 5 for just over two weeks, dealing another blow to the gambling mecca that’s already struggling to recover from a revenue decline in 2019. The closure was the longest on record and only the second such instance, after a typhoon in 2018 forced a 33-hour shutdown.

Even after the partial resumption of business around Feb. 20, gaming floors have seen few footfalls as China continued to halt individual and group visas to Macau and restrict transportation in a prolonged fight against the spread of the virus.

The respiratory disease has killed more than 2,900 people, most of them in China, while the number of infections has topped 85,000 globally. Measures to control the epidemic and people’s reluctance to visit crowded places have curtailed spending, weighing on China’s $14 trillion economy, half of which has remained idle since late January.

Casinos are about to take “an extremely bumpy ride” in 2020, according to a Feb. 25 note by DS Kim, an analyst at JPMorgan Chase & Co. in Hong Kong. He estimates gaming revenue will drop 24% and industry earnings before interest, tax, depreciation and amortization will plummet 30% this year.

More in Monday’s edition of Macau Daily Times.

MDT/Bloomberg