Macau's gross gaming revenue suffers in April

Recovery of the gambling industry in Macau has been slow, not least because of the remaining effects of the COVID-19 pandemic. Yet, April was the special administrative region’s poorest performance since the pandemic began, and it was worse than even September 2020 when the effects of the pandemic were felt in earnest. Gross gaming revenue marked a 27.1% month-over-month decline in April.

The Gaming Inspection and Coordination Bureau or DICJ for its Portuguese acronym found itself in a tight corner, revealing the latest numbers on Sunday. The results for April reached MOP2.68 billion ($331.2 million) which was lower than the MOP3.67 billion from a month before. The COVID-19 pandemic has kept impinging on Macau’s competitiveness, but there have been other extenuating circumstances.

For one, the SAR is dealing with a litany of regulatory tweaks that are creating fresh challenges for all stakeholders and have already limited the reach of junket operators. Junket numbers have fallen by the dozens and there are fewer than 40 junkets operational in Macau. This has limited the SAR’s capacity to project its appeal to gamblers from the mainland and overseas.

Casinos have also decided to mostly sever ties with junkets as well. More importantly, a few brief flare-ups of COVID-19 in China made it harder for people to travel to Macau as well in April. As a result, casino gross gaming revenue fell by 68.1% compared to April 2021. This time of the year is generally associated with festivities and holidays that translate into better overall pull for casinos.

Meanwhile, DICJ observed that the overall gross gaming revenue for the first four months of 2022 was at MOP20.45 billion, or down 36.2% year-over-year. This means that in the first quarter, casinos collected only $2.55 billion, making it one of the slowest periods for the industry in Macau.

Despite the temporary setbacks, most of the COVID-19 challenges have been overcome to some extent. The worst of the regulatory uncertainty is now over, and what remains to be done is for casinos to quickly adjust to the new market realities. Once they do that, they will be able to start pulling in more visitors.

Some casinos remain exposed to the risks of junket operators, as they may be forced to pay liabilities for unhonored junket reimbursements to VIP customers.

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