COVID-19 impact: Macau’s February gaming revenue shows deep decline

The absence of players in Macau due to the Coronavirus generated great losses for gaming last month.

The GGR of the territory fell 87.8% on a y-o-y basis to MOP$3.1 billion as a consequence of the closure of all casinos during 15 days last month to prevent coronavirus’ spreading.

The Coronavirus global crisis, with more influence in Asia, is anticipating a very tough year for worldwide economy, including, of course, the gambling industry. In that sense, numbers for February and even March for Macau gaming sector are an evidence of those effects. The massive gaming decline wasn’t a surprise. After the closure of casinos for 15 days, the reopening since February 20th revealed empty gaming floors.

In comparison with the same period of 2019, 2020 indicators for the first two months are obviously very negative. The gross gaming revenue (GGR) for January-February 2020 in Macau totaled just MOP$25.23 billion, down 49.9% year-on-year, with analysts expecting a similar decay (around 80%) through March. In fact, major operators like Melco Resorts & Entertainment and Galaxy Entertainment Group suggested that Macau’s environment will remain difficult for at least the next four to six months, when the ‘Coronavirus effect’ passes by.

To complete and complement these disappointing figures, Macau’s Statistics and Census Service reported that, in January 2020, the number of visitors arriving to the jurisdiction dropped by 16.8% year-on-year to about 2.85 million due to the outbreak of COVID-19. While visitor numbers for February are expected to confirm greater descent, current info from January showed that visitors from mainland China decreased by 14.9% to around 2.13 million people. Travelers under the individual visit scheme (IVS) also reduced by 14.4%, although visitors from Zhuhai and Guangzhou province rose by 9.3% and 14.4% respectively. Tourists from South Korea declined by 56.6%, while from the United States, Australia, Canada and United Kingdom combined for a decrease of more than 20%. Besides, the average occupancy rate of hotels and guesthouses in January was around 80%, down by 13.5% year-on-year. Five-star hotels recorded an occupancy rate of 80.4%, representing a decrease of 14.5%.

In terms of global effects of Coronavirus to the gaming industry, the research company H2 Gambling Capital expects the outbreak to lead to a decline of 1.0% to 8% in global gambling gross win in 2020. This situation would motivate that the total global GGR fall up to US$400 billion. However, while lots of players would be absent from land-based casinos, some of them would play online, generating a rise for global iGaming gross win from 13.4% to 14.7% in 2020.