Posted on: June 23, 2022, 08:31h.
Last updated on: June 23, 2022, 01:49h.
Macau’s six casino operators have each signed six-month extensions that allow them to continue facilitating games of fortune through December 31, 2022.
Macau is finalizing its next regulatory law that will govern gaming ops from 2023 through at least 2033. The rulemaking process was greatly slowed amid the pandemic, which resulted in the Chinese enclave granting six-month extensions through the end of the year.
Sands, MGM, Wynn, Melco, SJM, and Galaxy Entertainment each paid the Macau government a roughly US$6 million fee for the licensing continuation.
Macau this week unveiled its latest regulatory draft, one that includes greater oversight and control of its gaming industry. Prior to COVID-19, Macau generated more annual gaming revenue than any other place in the world.
China’s “zero COVID” pandemic approach and Macau’s adherence to the restrictive health policy have blocked any sort of meaningful recovery in the Special Administrative Region (SAR) where gambling is permitted. A recent outbreak of new cases in Macau, the region’s first since 2020, is expected to further delay a gaming comeback.
Cases Continue Climbing
Though Macau borders mainland China, where the coronavirus is thought to have originated, being a secluded territory of the People’s Republic allowed the casino hub to isolate itself in 2020 and last year. The border controls appear to have successfully contained the virus and largely kept the respiratory disease out of the enclave for most of the past 24 months.
That all changed this week when an outbreak hit Macau. Chief Executive Ho Iat Seng said today that the total number of new COVID-19 cases has reached 115 infections. Prior to this week, Macau counted less than 50 cases throughout the entire pandemic.
Macau is on a quasi-lockdown, Ho ordering the closures of movie theaters, cafes, beauty salons, gyms, bars, and most forms of entertainment. Restaurants are no longer allowed to provide dine-in service — only takeout and delivery.
Gaming operations inside casinos, however, remain open. With the gaming industry being the economic lifeline of Macau — the industry responsible for employing more people than any other sector — local officials try and keep the resorts open and residents working.
Macau has ordered another round of mass testing. The region’s entire resident population of 600,000 people is undergoing COVID-19 testing at one of the government’s 53 examination locations. Residents can also complete an approved at-home test and upload their results to the Rapid Antigen Test Reporting Platform on the government’s Novel Coronavirus Response and Coordination website.
The Macau casinos might be open, but they are essentially empty and free of any substantial visitation. Gaming revenue, still bleak in 2022, has been further downgraded by analysts projecting low June numbers on the outbreak news.
Sanford C. Bernstein said in a note this week that it now expects gross gaming revenue (GGR) this month to be just 9% of the casino win in June 2019. Macau casinos reported a GGR of roughly MOP23.8 billion that month.
If Bernstein’s projections are accurate, that means Macau GGR this month will only total around MOP2.14 billion — or roughly US$260 million.