by Katerin Cruz on January 4, 2021

Macau casinos are over the worst year – a sign of recovery

Macau is widely known for having a flourishing gambling industry. There are more than 40 legal casinos in this country and gambling is a major part of the revenue as it makes up to 50% of the economy. However, 2020 had been a tough year for Macau’s gambling industry. No wonder why most of the casinos faced a big decline. The pandemic-related lockdowns made the entire business slow down and stop operating because land-based activities had been banned by the government. Most of the players switched to online gambling sites, leaving Macau’s brick and mortar casinos without customers.

Now it seems like Macau casinos are finally going to rescue a year of negativity. Sings of hope can already be seen in the revenue of December, as there is a little rise compared to previous months. Experts believe that the industry will revive completely in 2021 and the world’s largest gambling hub will continue to reign.

Macau’s second year of negative growth

Recently, Macau’s Gaming Inspection and Coordination Bureau (DICJ) announced the latest data. Macau, as a special administrative region of China, shows a major decline in December compared to the previous year. In fact, the total revenue in December 2020 was  MOP7.8b (US$978m) which is 65.8% less compared to December 2019.

However, this number is positive if we take the revenue of previous months into account. December’s revenue is nearly 16% gain from November’s results, not to say anything about the previous months since the pandemic started. The gambling industry showed a big rise in December after the entire year of inactivity and probably, this is the reason why experts believe that Macau casinos have already overcome the worst year and why they see signs of recovery.

It seems like the Christmas period was especially favorable for the tourism industry of Macau. Specifically, according to a newly released report by the Macao Government Tourist Office, in the period of December 23-27 the average hotel room occupancy was close to 70% which is a significant improvement considering the rate of previous months.

But still, this is the second time when the Macau gambling industry shows negative growth, resulting in 79.3% down from the rate of 2019. Needless to say that the main reason for this decline is China’s strict regulatory approaches to fight against the pandemic.

Is Macau still struggling?

Now according to the Bloomberg Intelligence index, Macau casino operators have jumped up by about 4% in December. However, for the moment Macau still has certain problems and tries hard to get its customers back. Even though China already opened borders and let the tourists come into their country, many players still find it hard to enter the city because the application process became more difficult and time-consuming.

The reason for making the restrictions harsher by the government is indeed a new strain of the virus that recently took place in the United Kingdom. In fact, according to new policies, everyone who has left the country in the past three weeks is restricted from entering Macau. This makes the gambling industry of the region struggle again because not everyone has access to their gambling revenues anymore.

It’s imprtant to note that there haven’t been COVID-19 cases in Macau for the past six months. Compared to most of the other parts of the world, it’s one of the largest Covid-free areas. However, this doesn’t stop the government to take precautions because the virus continues to spread in Hong Kong and certain parts of mainland China.

Now analysts believe that Macau casinos could be hopeful for 2021 because gaming revenue is returning almost about 80% of 2019 levels. However, probably it will take time before Macau gambling revenues will finally restore their operations and continue to fully function. Even though there is a big decline in full-year revenue, long-term predictions about Macau’s revenue are hopeful. Therefore, it’s only a matter of time but still, we will have to wait and see how the worldwide situation will develop.

By Katerin Cruz

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