Casino revenue in Macau is expected to drop more than 70% year-on-year in March, according to several brokerage firms cited by regional gaming news outlet GGRAsia.
Bad news for Macau continue to emerge after the only Chinese territory where casino gambling is legal recorded one of its worst months ever in February.
Gross gaming revenue in the city plummeted 87.8% year-on-year last month after the city’s casinos were closed for 15 days as part of the local and Mainland China governments’ efforts to contain the spread of the coronavirus epidemic.
According to figures released Sunday by the Macau Gaming Inspection and Coordination Bureau (DICJ), the city’s 41 casinos generated MOP3.1 billion in gross gaming revenue last month, down from MOP25.37 billion in February 2019.
Macau’s casinos remained shuttered between February 5-20 as the city and the rest of China were grappling to contain the virus spread. Most of the gambling venues have reopened doors since February 20, but analysts do not expect any significant improvement of revenue figures in March and the coming months.
What Experts Say
Following the publication of DICJ’s February report, brokerage firm JP Morgan Securities (Asia Pacific) Ltd. said in a note that last month’s result was “not meaningful” bearing in mind the disruptions Macau faced since early in February, including lack of visas to the casino hub, limited transport options, lengthy health checks at the border, and the mandatory facemasks, among other factors.
According to JP Morgan industry analysts, gross gaming revenue would “sink 70% in March” and around 35% in the second quarter of the year. Macau would see “some stabilization” from the third quarter when revenue is expected to drop around 8%. The brokerage expects revenue to grow in the fourth quarter of the year by about 5%.
“This leads us to forecast 2020 gross gaming revenue to drop 24% and industry earnings before interest, taxation, depreciation, and amortization to drop 30%,” the brokerage said in its Sunday note.
Sanford C. Bernstain Ltd. said in a note that near-term forecasts were “largely guesses” at present “with the biggest variables now being when travel restrictions from China will be lifted.”
The brokerage went on that they believe March will “potentially be down between 75% to 80% (assuming no significant improvement in visa issuance and travel).”
Investment bank Deutsche Bank AG said in a Monday note that it expects March gross gaming revenue to drop 71%. The bank’s first-quarter forecast for Macau’s casino market now stands at -51% from a 41% decline previously. It also expects full-year revenue to be down 33% from -17% previously.
Coronavirus cases are reported to be slowing in China and the country is gradually getting back to work. Just like in the rest of the nation, Macau and its casinos are subject to heavy restrictions until further notice. Patrons and staff are required to wear facemasks. In addition, gamblers must have their body temperature checked regularly and must present a health e-declaration in order to be provided with access to the gambling venues.
Source: Macau March GGR to dip 70pct plus after weak Feb: analysts
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