MACAU – Macau’s casinos posted their worst year since 2004 as China’s strict zero-Covid policies wrought havoc on the gambling hub, though a recent loosening of pandemic curbs is fuelling optimism about a long-awaited revival in the year ahead.
The Gaming Inspection and Coordination Bureau said on Sunday that gross gaming revenue in December fell 56 per cent from a year earlier to 3.48 billion patacas (S$584 million), slightly below the median estimate of a 57 per cent decline, according to analysts surveyed by Bloomberg.
That took revenue for the full year to 42.2 billion patacas, down 51 per cent from 2021 and far short of the pre-pandemic level of 292 billion patacas in 2019.
Still, analysts predict a rebound in 2023, with a median estimate of 195 per cent growth.
Gaming revenue has been declining since March as virus outbreaks and lockdowns in China – Macau’s biggest source of visitors – led to a tightening of outbound travel, and a crackdown on cross-border gambling saw tougher rules around issuing visas.
Revenue plunged to a record low in July, when the city was hit by a major flare-up that saw casinos shut for almost two weeks and prompted the mainland to suspend quarantine-free travel.
Disruptions are set to drag on casinos until the Chinese New Year holidays in late January, according to Bloomberg Intelligence analyst Angela Hanlee.
But the mainland’s reopening in January and Macau’s own moves to scrap quarantine for overseas arrivals pave the way for a major rebound for casinos in 2023.
Investors are bullish on the sector, pushing casino stocks to their best annual performance since 2017 on optimism about China’s reopening.
Casinos also face brighter prospects over the longer-term.
All six current operators were recently granted new licences for 10 years, with the decision removing a major uncertainty that had hung over the sector for much of the past year.
A Bloomberg Intelligence index of Macau casino operators jumped 35.5 per cent in December, boosted by the reopening news.
The benchmark Hang Seng Index rose 6 per cent in the same month. BLOOMBERG