Macau’s casinos posted their worst year since 2004 as China’s strict Covid Zero policies wrought havoc on the gambling hub, though a recent loosening of pandemic curbs is fueling optimism about a long-awaited revival in the year ahead.
(Bloomberg) — Macau’s casinos posted their worst year since 2004 as China’s strict Covid Zero policies wrought havoc on the gambling hub, though a recent loosening of pandemic curbs is fueling optimism about a long-awaited revival in the year ahead.
The Gaming Inspection and Coordination Bureau said Sunday that gross gaming revenue in December fell 56% from a year earlier to 3.48 billion patacas ($433 million), slightly below the median estimate of a 57% decline, according to analysts surveyed by Bloomberg.
That took revenue for the full year to 42.2 billion patacas, down 51% from 2021 and far short of the pre-pandemic level of 292 billion patacas in 2019. Still, analysts predict a rebound in 2023, with a median estimate of 195% growth.
Read more: Macau Casino Crash Shifts World’s Gambling Crown to Las Vegas
Key Insights
- Gaming revenue has been declining since March as virus outbreaks and lockdowns in China — Macau’s biggest source of visitors — led to a tightening of outbound travel, and a crackdown on cross-border gambling saw tougher rules around issuing visas. Revenue plunged to a record low in July, when the city was hit by a major flareup that saw casinos shut for almost two weeks and prompted the mainland to suspend quarantine-free travel.
- Short-term headwinds remain after China’s abrupt U-turn on Covid Zero in December sparked a record wave of infections in both the mainland and Macau. Disruptions are set to drag on casinos until the Lunar New Year holidays in late-January, according to Bloomberg Intelligence analyst Angela Hanlee.
- But the mainland’s reopening in January, and Macau’s own moves to scrap quarantine for overseas arrivals, paves the way for a major rebound for casinos in 2023. Investors are bullish on the sector, pushing casino stocks to their best annual performance since 2017 on optimism about China’s reopening.
- Casinos also face brighter prospects over the longer-term. All six current operators were recently granted new licenses for 10 years, with the decision removing a major uncertainty that had hung over the sector for much of the past year.
Market Performance
- A Bloomberg Intelligence index of Macau casino operators jumped 35.5% in December, boosted by the reopening news. The benchmark Hang Seng Index rose 6% in the same month.
Read More
- Macau Ends Quarantine for All Travelers, Including From Hong Kong
- Chinese Demand for Travel Jumps as Beijing Opens the Floodgates
- China Estimates Covid Surge Is Infecting 37 Million People a Day
- US to Require Negative Covid Tests for Travelers From China
–With assistance from Neha D’silva.
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