Macau Casino Annual Revenue
The gaming results for April represent the seventh straight month of declining revenue, coming after Macau had already been battered by a two-year-long trade war and months of Hong Kong protests. Background Macau (also spelled 'Macao') currently has a thriving casino industry, pari-mutuel and sports betting, and a lottery. With annual gambling revenues of more than $13 billion, Macau is the largest casino gambling jurisdiction in the world.
© Bloomberg A man wearing a protective mask descends the steps at the Ruins of Saint Paul's in Macau, China, on Tuesday, March 3, 2020.(Bloomberg) -- Macau casinos suffered their worst month ever as travel restrictions during the coronavirus pandemic left the world’s biggest gambling hub struggling with few players and a heavy daily burn of cash.
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Gross gaming revenue plummeted 97% to 754 million patacas ($95 million) in April from a year earlier, according to data from the Gaming Inspection & Coordination Bureau. That’s the biggest drop on record, surpassing an 88% plunge in February. Analysts were looking for a decline of 94%.
The situation for casino operators in Macau has continued to deteriorate even after they reopened their doors following a 15-day shutdown in February aimed at curbing the contagion. While operations have restarted, baccarat and roulette tables remain nearly empty, and casinos are each losing more than $1 million a day.
The outbreak has been largely contained in Macau as well as in neighboring Hong Kong and mainland China, but restrictions on travel make it almost impossible for tourists and high rollers to show up to place their bets.
Melco Resorts & Entertainment Ltd. this week highlighted the unprecedented damage the coronavirus is having on the $36 billion industry, culling its senior ranks while other executives take a pay cut. Chairman Lawrence Ho, who will forgo his salary for the remainder of this year, wrote in an internal memo that the number of customers since re-opening has been “virtually zero.”
Melco earlier this year pulled the plug on its plans to buy a stake in Crown Resorts Ltd., citing the impact of the coronavirus on Asian tourism. MGM Resorts International on Thursday reported that its Macau unit’s first-quarter net revenue dropped 63% amid the “unprecedented crisis.”
Despite the damage to the industry, analysts expect travel limits to begin loosening beginning this month. Bill Hornbuckle, MGM’s acting chief executive officer, said in an earnings call Thursday that Macau casinos should recover early this summer.
Investors have also remained optimistic, with the Bloomberg Intelligence index of Macau operators rallying 21% last month after reaching a nearly four-year low in March.
Casinos are also likely to endure the daily drain of cash. JPMorgan Chase & Co. analyst DS Kim wrote in early April that all the casino operators “have ample liquidity to survive this unprecedented period of ‘near-zero revenue’ for over a year.” Galaxy Entertainment Group Ltd., with $6.8 billion in liquidity at the end of 2019, has enough cash to last more than six years, he wrote.
The gaming results for April represent the seventh straight month of declining revenue, coming after Macau had already been battered by a two-year-long trade war and months of Hong Kong protests.
For casinos to recover, they need to see the return of the Chinese visitors who power the territory’s gambling industry. Mainlanders are the largest source of VIP and mass gamblers for Macau, and they have been virtually shut out as China continues its freeze on individual and group visas as part of virus-containment measures.
Access to Macau has been further hobbled by a 14-day quarantine rule started by China’s Guangdong province in late March.
The situation should improve as Macau hasn’t found any new coronavirus cases for more than 20 days. Rob Goldstein, president of Las Vegas Sands Corp., said China should begin lifting limits on travel from the mainland to Macau this month.
Macau will ask the Chinese government to resume tourist visas to the city and increase the number of places that travelers can apply for individual visas “at an appropriate time,” Macau Chief Executive Ho Iat Seng said at annual policy address on April 20.
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The world’s largest casino market experienced a 70.5% drop in year-over-year gambling revenue in November, which was the best month it had since the COVID-19 pandemic began wreaking havoc in February.
Macau’s casinos won $845.34 million from gamblers in November, according to numbers released by the Gaming Inspection & Coordination Bureau. It’s actually down from the $910 million casinos won in October, but the percentage decline was slightly better in November.
Following six months with more than 90% drops in revenue year-over-year, the market is beginning to show signs of a rebound. However, analysts were expecting a slightly better month with a 60%-65% fall, according to a Reuters report. Those same analysts believe it will be well into 2021 before casinos return to pre-pandemic levels of revenue.
Through the first 11 months of 2020, Macau gambling revenue is down 80% compared to the same time frame last year. June was the worst month of the year for operators with $89.7 million in revenue.
Earlier this year, the Chinese government had very strict travel restrictions on anyone trying to travel to the former Portuguese colony. As they have relaxed those mandates, tourism saw an uptick. Now, travelers from China only require a negative test before arrival.
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In November, hotel occupancy reached 45 percent and the daily average tourists were more than 20,600, according to numbers released by the Council for the Development of Tourism. Both of those figures were the highest since the pandemic began.