The year-on-year decline in casino gross gaming revenue (GGR) in Macau “shouldn’t surprise anyone,” as border restrictions keep restricting the number of visitors to the area, a number of investment analysts say.
According to official data released on Wednesday, Macau casino GGR declined year-on-year by 97.0 percent to MOP716 million ( US$ 89.7 million). This was the lowest monthly figure since market liberalisation in 2002, official figures showed.
“The border closure remains in place which has continued to limit visitation and revenue. GGR [in June] was driven by a very small number of players, which drove significant volatility especially in the VIP segment,” said a Wednesday note from Sanford C. Bernstein Ltd.
Although there has been “some minor loosening of border crossings, restrictions to visitation are still largely in place,” the brokerage said.
Travel between Macau and Hong Kong is still in each direction usually subject to a 14-day quarantine period. Many mainlanders entering Macau do not have quarantine restrictions but those who wish to return to the mainland after a visit to Macau are currently subject to a 14-day quarantine rule.
In addition, the issuance of visas by the Chinese authorities for mainlanders to travel to Macau is limited, including visas under the Individual Visit Scheme (IVS), requiring residents of the mainland from selected cities to travel separately to Macau and some other areas.
The mainland and Hong Kong are typically important markets for supplying Macau casinos to gamblers.
Macau lawmaker and scholar Davis Fong Ka Chio told local reporters on Thursday that he believed the city’s monthly GGR casino could hit around MOP8 billion once border restrictions between Macau and the neighbouring province of Guangdong in mainland China have been eased.
According to data from the city’s Statistics and Census Service, the number of visitor arrivals to Macau in May declined by 99.5 percent year-on-year to 16,133.
In a Wednesday memo JP Morgan Securities (Asia Pacific) Ltd reported that the “visibility on the timing, pace and scale of the border reopening remains frustratingly low, and this frustration is shared by every operator and junket that we talk to.”
“Notwithstanding multiple delays and disappointments, we still hope that a ‘Greater Bay travel bubble’ arrangement could be announced soon in coming weeks (if not days), but the devil will be in the details,” it added.
On Tuesday the Hong Kong government declared that it had extended its deadline for the completion of a 14-day quarantine law for arrivals from Macau, mainland China and Taiwan to August 7. A Macau government official said in a press briefing on Wednesday that extending such quarantine measures in Hong Kong would not have an impact on the progress of negotiations over easing border restrictions.
Deutsche Bank Securities Inc. said it was updating its estimates for the Macau gaming market following the publication of the June GGR figures.
The brokerage said that it was now expecting the casino industry in the city to report US$ 5.27 billion in GGR for the third quarter. Annual sales currently projected to hit US$ 16.87 billion for the full year 2020, down from an earlier estimate of US$ 19.38 billion. This would mean a fall from the GGR achieved in full-year 2019 of approximately 54 percent.