JP Morgan Securities, the Asian financial services arm, has recently announced that it expects combined gross gaming revenues to hit as high as $36.58 billion for the 39 casinos in Macau for the whole of 2022.
The Hong Kong-based company used an official Wednesday filing to detail, according to a GGRAsia article, that this would mark a rise of 0.3 percent compared to the $36.47 billion chalked up for 2019 and signal that the casino industry in the city had finally recovered from its coronavirus-induced slump.
The source announced that Macau recently posted six consecutive months in which aggregate gross gaming revenue dropped by at least 90 percent year-on-year, with its cumulative tally falling by approximately 82 percent on a comparative basis to just $4.83 billion for the first three quarters of 2010. JP Morgan Securities allegedly claimed that the downturn caused by the coronavirus pandemic has since been aggravated by ‘growing confusion’ in the VIP sector as well as the ‘nuisances’ associated with mainland Chinese tourist visa arrangements.
While all Chinese residents have been able to obtain visas since September 23 for the purpose of travelling to Macau, the financial institution has reportedly announced that the entire procedure has recently become ‘much more inconvenient’ as these permits are now only valid for one week after a processing period of ten days. It allegedly claimed that there is still a ‘stigma’ that often prohibits potential gamblers from applying to visit the former Portuguese enclave.
The filing by JP Morgan Securities reportedly read: “We were overly hopeful on the prospect of pent-up demand, which we thought would outweigh the nuisances related to travel arrangement to Macau and stricter capital control.”
The brokerage allegedly reported that the VIP casino market in Macau is also suffering at present due to a widening clampdown on overseas and illicit gambling that has seen mainland authorities review junkets ‘and even some major players’ before freezing their accounts. It purportedly claimed that ‘this section’ remains very poor ‘with market volumes’ showing little if any progress ‘over the past two months.
JP Morgan Securities reportedly predicted that if the Chinese government reopened its self-service visa processing kiosks or lifted coronavirus-related restrictions that currently impede travel between Hong Kong and Macau, the enclave’s casino industry will see major improvements. Furthermore, GGRAsia allegedly explained, however, that this latter notion showed no sign of occurring any time soon as local officials recently extended the 14-day quarantine clause between the two cities until at least the end of the year.
The filing from JP Morgan Securities reportedly read: “We think Hong Kong’s importance lies in its position as an avenue for capital flow, where a sizable portion of liquidity goes through Hong Kong into Macau.”