Table games at Macau’s casinos are now running at 80 percent capacity following a 15-day closure in February. But the Special Administrative Region’s (SAR) road back to normalcy is going to take a while after the government slashed its 2020 gross gaming revenue (GGR) forecast by 50 percent.
In a budget request released earlier today, lawmakers in the world’s largest gaming center forecast 2020 GGR of $16.3 billion, well below the initial estimate of $32.5 billion. Government projections are usually on the cautious side, but if the $16.3 billion call proves accurate, it would represent a 55.5 percent tumble from the $36.56 billion in GGR generated on the peninsula last year.
The government’s glum revenue forecast follows a series of downbeat estimates for March and a reported February decline of almost 88 percent – a record monthly slide. However, most of the SAR’s casinos are now operational and table games percentage is up significantly over the past couple of weeks.
The Government has given permission for two casinos to be closed beyond the 20 February deadline. This means that – as of tomorrow – an aggregate of 37 casinos will be running in Macau,” according to the government’s official web site. “Macao’s casinos currently have an aggregate of approximately 5,400 gaming tables in operation, representing about 80 percent of the city’s table tally.”
As of Friday, March 20, 37 of the SAR’s 40 casinos will be up and running.
Long Road Back
The 15-day closure implemented last month proved effective at temporarily stopping the spread of the COVID-19 virus on the peninsula. Prior to that move, there 10 cases of the respiratory illness in Macau – a number that was steady for 39 days.
Indicating that no region affected by the coronavirus is out of the woods yet, three cases emerged this week in Macau. That prompted authorities there to ban travelers from everywhere in the world except China, Hong Kong, and Taiwan from coming to the peninsula.
Travelers from mainland China and Hong Kong combined for 91 percent of visits to Macau last year, indicating that if Beijing relaxes the ban on the individual visit scheme (IVS), allowing gamblers from the mainland to readily access the SAR, a GGR rebound could materialize in the coming months.
The gaming industry accounts for 80 percent of the tax revenue collected by the Macau government, and with the COVID-19 epidemic slamming concessionaires, lawmakers acknowledge receipt collection will tumble this year. As such, the government is expecting a budget shortfall of $4.87 billion.
Earlier this month, officials in the SAR said they weren’t contemplating tax relief for concessionaires – something the industry wasn’t asking for in the first place.
In an effort to bolster the local economy, lawmakers are providing citizens with $375 vouchers that can be spent on anything as long it’s in Macau. Politicians expect the scheme will be effective, but it will lead to a government spending increase of almost $1.9 billion this year.