Macau gaming revenues dive 94.5% in August despite looser Covid-19 curbs

In a photo taken on Feb 4, 2020, people wearing masks walk in front of Casino Lisboa, in Macau, before its temporary closing.
In a photo taken on Feb 4, 2020, people wearing masks walk in front of Casino Lisboa, in Macau, before its temporary closing.PHOTO: REUTERS

HONG KONG (REUTERS) - Gambling revenue in Macau plunged 94.5 per cent in August year-on-year with casinos reeling from a lack of visitors to the world's biggest casino hub, despite a loosening of quarantine restrictions which have only seen a modest rise in gamblers.

August's revenue figure of 1.3 billion patacas (S$221.5 million) was in-line with analysts' expectations of a drop of around 95 per cent.

China has announced that tourist visas, through which a majority of visitors enter Macau, would be reinstated for all provinces from Sept 23.

Residents from the neighbouring coastal province of Guangdong have already been permitted to apply for visas in August but visitor numbers have not increased significantly.

Casino executives and investors had been eagerly awaiting the loosening of visa restrictions to revive gaming revenue, which has slumped since February due to coronavirus-led travel restrictions.

Visitor levels were around 7,000 daily in the last week of August compared with around 100,000 in 2019.

The subdued visitation adds to a list of hurdles for the former Portuguese colony, already hobbled by slowing economic growth, Sino-U.S. tensions and coronavirus lockdowns.

China's crackdown on online gambling to help contain capital outflows has hit liquidity in Macau's VIP segment, prompting many customers in August to withdraw money from the casino cages.

In June, Beijing had identified the cross-border flow of funds for gambling as a national security risk.

 
 
 

Since then, financing channels used by the online gambling sector and cryptocurrency lending platforms have been cut off, with tens of thousands of suspects arrested.

Casino executives and junket operators say the crackdown is hitting big spending VIP customers due to worries over their financing channels via the junkets.

While China was not targeting the Macau casino industry itself, they said the focus on money laundering and illegal transactions put pressure on liquidity.