Pandemic-driven tourism slump is bad luck for Macau’s casinos
Dependent on foreign tourism, the territory’s gambling industry suffered its worst month of the year in
Macau’s casinos had an abysmal August, continuing an 18-month run of hard luck in the coastal Chinese city as the pandemic continues to impact tourism.
Gross gambling revenue last month fell to $554 million, the lowest monthly total so far this year and a mere fraction of the $3 billion per month averaged recorded in 2019, according to the Wall Street Journal.
Macau is a major source of revenue for some of the world’s largest casino operators, including U.S.-based Wynn Resorts, MGM Resorts and Las Vegas Sands, who all operate casinos there.
The slump is of particular concern to Las Vegas Sands. Shortly after the death of its founder, Sheldon Adelson, earlier this year, the company sold off its Las Vegas holdings for more than $6 billion to focus on its properties Macau and Singapore, which already accounted for 85 percent of the company’s revenues in 2019.
Wynn Macau recorded a $117 million loss in the second quarter and Sands China lost $166 million. At MGM China Holdings, revenue fell to $311 million, down over 50 percent from the same period in 2019.
August may prove to be the floor in terms of gross revenue this year — the Macau government on Aug. 24 relaxed restrictions on visitors from the Chinese mainland, a move which jolted casino operators’ share prices on hopes it would encourage more tourism.
Still, a research note from Jefferies last week read that the industry’s recovery will be gradual and “normalized activities in Macau could take until 2022 to begin resuming.” Another concern, the Journal reported, is uncertainty over the looming expiration of the city’s six government-issued casino licenses next summer.
May was the strongest month so far this year in Macau. Gross gaming revenues reached $1.3 billion, thanks in part to a five-day holiday in China that drew tourists and gamblers to the territory.
[WSJ] — Dennis Lynch