Macau's casinos posted their worst year since 2004 as China's strict Covid Zero policies wreaked havoc on the gambling hub.
The Gaming Inspection and Coordination Bureau said Sunday that gross gaming revenue in December fell by more than half from a year earlier.
Revenue for the full year was less than the pre-pandemic level of 292 billion patacas. There is a median estimate of 185% growth for the rebound in 2023.
The Macau casino crash shifted the world's gambling crown to Las vegas.
Key Insights
- 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 flareup that saw casinos shut for almost two weeks and prompted the mainland to suspend quarantine-free travel.
- Short-term headwinds remain after China’s abrupt U-turn on Covid Zero in December sparked a record wave of infections in both the mainland and Macau. Disruptions are set to drag on casinos until the Lunar 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, paves 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 licenses for 10 years, with the decision removing a major uncertainty that had hung over the sector for much of the past year.
Market Performance
- A Bloomberg Intelligence index of Macau casino operators jumped 35.5% in December, boosted by the reopening news. The benchmark Hang Seng Index rose 6% in the same month.
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With help from Neha D' Silva.
