Published: 14.04.2020, 15:53
3 min read
The COVID-19 pandemic is gradually lessening its influence in China, and the country’s economy is slowly starting to restore. In the gambling industry, however, the recovery process is taking longer than its experts predicted.
- Macau Casino Tables Are Operating at 80% After Weeks of Shut Down
- Casinos in Macau Showed a Record Drop in Profits Due to Coronavirus
The Economic Impact of COVID-19 on Macau Gambling Industry
Macau is the only area in China where gambling is legal. For two weeks in February, all Macau gambling facilities had to shut down. This was so that they could contribute to the social distancing safety measures and help prevent the coronavirus from spreading further. Recently, the major casinos of Macau, such as Wynn Resorts, Las Vegas Sands, and MGM Resorts, have been granted permission to reopen. However, even though it is safe for Chinese citizens to visit Macau casinos these days, people do not seem to be ready to come back to gambling just yet.
As a consequence of the pandemic, the revenue of Macau casinos in March 2020 was 80% less than the indexes during the same month last year. According to the statistics of the Gaming Inspection and Coordination Bureau of Macau, the gambling industry’s revenue this March reached only MOP$5.3 billion ($664 million). In comparison, the revenue in March 2019 was MOP$25.8 billion.
These numbers are especially staggering, as the analysts only forecasted a 70% decrease in revenue. Nevertheless, it is an improvement from February. At that time, the revenues of Macau casinos turned out to be 88% less than in February 2019 due to the complete closure of gambling facilities.
Further Restrictions
The Macau authorities imposed some restrictions on the entry to the Special Administrative Region until the threat of COVID-19 has subsided. The officials introduced the new measures when two new cases of coronavirus were announced after a month without any diagnoses. As for now, tourists from Hong Kong, Taiwan, and mainland China do not have the right of entry. In addition to this, residents that come back from any places outside Macau must be on quarantine for 14 days from their arrival.
The US-based casino companies have notified their investors of the negative impact that traveling limitations are imposing on their business. According to the analysts’ expectations, gamblers won’t be returning to resorts over the next few weeks. In their annual reports filed at the end of February, Wynn Resorts Ltd., Las Vegas Sands Corp., and MGM Resorts International expressed their concern about losing a significant percentage of their revenues not only in Macau but also in Las Vegas.
For the period following the coronavirus outbreak, analysts predicted a 35% drop in the gambling revenues of Macau within the first four months. However, compared to the same period of time last year, the revenue ended up dropping by 60%. As most countries have not yet reached their infection rate’s apex, and new cases of COVID-19 are still being diagnosed in China, it remains unclear when Macau gambling industry will restore to its last year’s indexes.
