BEIJING (BLOOMBERG) - China will resume quarantine-free travel with Macau as the city recovers from its worst ever Covid-19 outbreak, in a move that could herald a tourism revival for casinos that have been bleeding cash for months.

Macau's border with the neighbouring Chinese city of Zhuhai will reopen from 6pm on Wednesday (Aug 3), local media TDM reported.

The announcement came after Macau eliminated community transmission, meeting China's requirement for resuming quarantine-free travel. China, which adheres to a zero-tolerance policy and is the largest source of Macau's tourism, shut its border with the city on June 22.

Macau reported more than 1,800 cases during the outbreak which started June 18. While small by global standards, it's the biggest flareup for the enclave that has just 680,000 residents and sparked an unprecedented city-wide lockdown, multiple rounds of mass testing and shut casinos for nearly two weeks.

Quarantine-free travel is the key to recovery for the gaming industry, which accounts for 80 per cent of Macau's government income and a third of local employment.

But the city's reliance on China leaves it tied a Covid Zero strategy that relies on sudden lockdowns and extensive movement restrictions to curb outbreaks before they take hold.

That's adding to months of pain and has seen the city lose its crown as the top gambling hub in the world.

In 2019, Macau's gaming revenue was six times the size of the Las Vegas Strip. But in the first six months of this year, it recorded US$3.3 billion (S$4.6 billion) in gaming revenue, compared with US$4 billion for Sin City.

Macau's six gaming operators are burning through millions of dollars of cash a day and are facing a liquidity crunch. The companies are expected to post a US$500 million combined loss for the last quarter, their first since 2020, according to analysts surveyed by Bloomberg.