Macau, once a popular destination for international gamblers looking for a unique, diverse setting for their favorite activity, is trying to claw back after being hit hard by the coronavirus. The global pandemic hit the city hard due to its reliance on casinos and betting for much of its revenue, and Macau has suffered serious setbacks after being shutdown for extended periods of time in an effort to keep the virus from taking over. Any belief that a relaunch of the casino market would help the city bounce back quickly has proven to be misguided and, according to the latest figures from the Gaming Inspection and Coordination Bureau (DICJ, for its Portuguese acronym) show that there is still a lot of work to be done. Macau’s gross gaming revenue (GGR) for August was almost 95% lower than it was a year earlier, marking an eleven-month trend in poor performance in the local casino industry.
The DICJ reports that the GGR in August was just $166 million, down 94.5% year-on-year. This mirrors the results seen a month earlier, when Macau only took in $167 million, also a year-on-year drop of 94.5%. For the past five months, the GGR in the city has been more than 90% lower than it was a year earlier and, for the past eleven months, gaming revenue has been in a downward spiral, with the city seeing 80% less gambling revenue over the period compared to a year earlier. Across the first eight months of 2020, GGR is off by about 81.6%, having dropped to $4.55 billion from the $24.78 billion Macau reported in the same period in 2019.
There’s improvement coming, even if it won’t put things back in place quickly. The Individual Visit Scheme (IVS), a program that gives Chinese nationals easy access to Macau, had been stopped this past January because of COVID-19. Residents of Zhuhai in the Guangdong province, a major feeder for Macau, were allowed to apply for an IVS again as of August 12, but the scheme was restricted elsewhere in the country. Now, the rules are being relaxed and, after seeing how things go with the rest of Guangdong, which was given approval to submit IVS requests as of August 26, China could open the IVS program to other cities on September 23. The first Guangdong-wide IVS requests are expected to be approved today.
An 11-month 80% drop in revenue is enough to cause a serious amount of stress on anyone. Fortunately, the Macau government has been smart over the years with its money and should be able to keep itself alive as it works to overcome the losses. Plans to diversify the city and make it more versatile in terms of being an international tourist destination had already begun prior to the coronavirus pandemic, and will certainly be stepped up now.