S&P Global is pessimistic about city’s 2022 GGR
International economic rating institution S&P Global Ratings expects that Macau’s 2022 end gross gambling revenue (GGR) will at most reach USD10.08 billion, several media report.
In addition to the pessimistic forecast, according to gambling industry media GGRAsia, the institution has placed several local casino operators, namely Wynn Resorts Ltd., Sands China Ltd. and Melco Resorts and Entertainment Ltd. under negative credit watch.
S&P Global Ratings cited in a report published last week the city’s recent outbreak of SARS-CoV-2 and the subsequent strict control measures as a core reason for the poor forecast. Moreover, similar to what Macau Chief Executive Ho Iat Seng has said, Macau’s disease control measures are mostly mirroring those imposed in mainland China, meaning that such measures will also discourage mainland tourists and gamblers from visiting Macau.
Moreover, despite the government’s attempt to retain consumption by providing grants from public funds to individual citizens for them to spend, the report remarked that “shrinking disposable income and weakening consumer sentiment, which surfaced in late 2021, may also hinder the recovery.”
At the time the S&P Global Ratings were published, the government had not yet announced the de-facto lockdown of the city to commence in the coming week. The city’s SARS-CoV-2 infections tally is still on the rise as of press time.
According to the institution at its most optimistic, the city will see about MOP88 billion in GGR at the end of this year. This amount is only about 20% to 30% of the city’s pre-Covid GGR level, S&P Global pointed out.
In the first six months of this year, the city has only garnered about MOP26 billion in GGR, lowest in the past 16 years.
Looking into the year ahead, S&P Global Ratings estimates the city will regain about 50% to 70% of the mass-market synergy from pre-Covid time. It added that the city should not be too optimistic about VIP markets.
The city cannot attract foreign visitors as they are currently banned from entering, although its government has promised incentives or benefits to future casino operators to lure foreign visitors.
