The casino industry of Macau is expected to announce a record low in monthly gross gaming revenue (GGR) for July 2022 due to the ongoing Covid-19 outbreak.
As CasinoGamesPro previously reported, the Government of the special administrative region (SAR) ordered the immediate closure of local non-essential businesses, including more than 30 casino venues, on July 11th amid the record of 1,526 active coronavirus cases since June. The authorities’ decision marked the first time when Macau casinos had become subject to closures for over 2 years. Last week, they announced an extension of the closures by 5 days, with the local casino venues now set to resume operations on July 23rd.
The prolonged lockdown, however, has added more uncertainty for patrons of the largest gambling hub in the world. The restrictions implemented on so-called “non-essential businesses” in Macau have been unveiled as part of the “zero Covid-19” policy of mainland China, which aims at eliminating the infection within the country’s borders.
The rare move of local authorities made the casinos part of the massive shutdown, which left only the most essential businesses and institutions in the former Portuguese colony operational. These measures, however, affected casinos’ profitability, with some analysts predicting their gross gaming revenue is likely to remain close to zero for weeks. According to a team of analysts at Bernstein, Macau casino’s GGR will fall by 98% in July in comparison to July 2019 in case local casinos resume operation as planned.
Gambling in Macau Has Been Slow Because of Zero-Covid-19 Policy’s Shutdowns
For years, gambling has been the most important industry in Macau, as it accounted for over 80% of the revenue received by the local Government and employed thousands of people. However, casino operators, such as MGM, Wynn and Sands have faced the negative effects of the Covid-19 pandemic, which has left the city’s borders largely closed since the outbreak. Reportedly, major casino stocks in the region have fallen by 60% or more since the beginning of 2020.
Casino guest numbers had declined before the closures as a result of the border and travel restrictions in Macau. According to reports, a total of 600,748 people visited Macau in May 2022, with this number falling to 380,671 by June 2022.
As mentioned above, gambling industry experts and analysts are now predicting that Macau casinos will face their worst monthly gross gambling revenue to date in July, with the Covid-19-related closure being the ones to blame. In contrast, July 2021 was the second-best month for local casinos in terms of gross gaming revenue, with the GGR worth MOP8.44 billion.
In the mid-week, one of the major casino operators in Macau – Las Vegas Sands Corp. – reported that its results declined in the second fiscal quarter as health restrictions in the special administrative region continued to affect local casinos’ performance. Analysts believe that similar results are set to be posted by the rest of the casino companies in the former Portuguese colony.