Macau casinos face their worst year ever as Covid restrictions discourage gamblers

With China's tough Covid directives and travel restrictions discouraging gamblers, this year will go down as a particularly bad year for the gambling business in Macau,says a Bloomberg report. Casino revenue plummeted 56 per cent from November, 2021 to 3 billion patacas ($374 million), according to the Gaming Inspection and Coordination Bureau, which released its report on Thursday. With that, revenue from January through November was 38.7 billion patacas, which is a significant decrease from the 270 billion patacas earned during the same time period in 2019, pre-pandemic.Analysts had anticipated a 47 per centdipin revenue to 3.6 billion patacas in November compared to the same month last year.

What's causing the economic fallout?

Tourist numbers in Macau are still substantially below pre-pandemic levels. Around 2.9 million people arrived in October 2021,compared to 5,80,000 in October of this year. This is due to China's continued strict compliance to zzero-Covidpolicies, that proved futile for Macau's economybecause the mainland is its primary tourist attraction.

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Macau still remains inaccessible to people from other countries, but transit between Macau and mainland China is not subject to quarantine. Five days of hotel isolationis mandatory for visitors from Hong Kong.

To contain a minor flare-up, Macau conducted widespread Covid testing and shut down a significant casino resort in late October, which had an adverse impact on tourism.

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The Chinese government cracked down on junkets in Macau, the only region in Greater China where casinos are permitted, and as a result, the tourists who are visiting are also spending less money.

Since March of this year, when omicron spread throughout China, Macau's casino income has been consistently falling. In July, when the city experienced its worst outbreak and went into lockdown for two weeks, it fell to a record low, leaving casinos with little to no income. Long-term prospects for the six casinos in Macau are improved owing to the recent renewal of their operation licences for an additional 10 years. Beginning in 2023, the new permits will be in force.

Following the announcement of renewed licencing on 26th November, a Bloomberg Intelligence index of Macau casino operators increased by 56 per cent in November. The index has increased 30 per cent only this week. In November, the benchmark Hang Seng Index increased by 27 per cent

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