Macau’s gaming industry extended its slump last month, with revenue plunging 68 percent year-on-year as China tightened travel restrictions during a record COVID-19 outbreak, and casinos burned through millions of dollars of cash per day.
Gross gaming revenue dropped to 3.34 billion patacas (US$413.6 million), the Macau Gaming Inspection and Coordination Bureau said.
The results were worse than the median analyst estimate of a 64 percent year-on-year decline, and follow a 68 percent slump in April and a 56 percent drop in March.
Photo: Reuters
Revenue rose 25 percent from April, but was down about 87 percent from levels before the emergence of COVID-19 in 2019.
The gaming industry has been mired in uncertainty due to the strict COVID-19 curbs in China, Macau’s biggest source of visitors.
Last month, officials strictly limited unnecessary outbound travel for its citizens and tightened the approval of entry and exit documents to prevent COVID-19 from being brought into the country.
There was also a separate China-led crackdown on cross-border gambling, which led to a further tightening of visa issuance for those suspected of illegal gambling activities.
Visitation plunged 24 percent year-on-year in April, after a 30 percent decline in March. Later this month, Macau is to release figures for last month.
With gaming revenue plummeting, the territory’s six major casino operators are facing increasing liquidity pressure.
The industry was burning an average of US$12 million per day in the first quarter, estimates from Morgan Stanley and Goldman Sachs Group Inc showed.
In a worst-case scenario of no revenue coming in at all, every operator except for SJM Holdings Ltd (澳門博彩控股) could survive between one and two-and-a-half years, an estimate from Sanford C. Bernstein showed.
SJM might survive three months, but the company is in the process of negotiating refinancing that could provide it with HK$5.7 billion (US$726.5 million) in further liquidity, Bernstein said.
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