Macau sees gross gaming collapse by 50% in 2022

Macau has put another difficult year behind its back. The new year is associated with the opportunity to break away from what has been a difficult spell since the COVID-19 outbreak in 2020 which has haunted concessionaires and gaming operations in the Special Administrative Region (SAR).

Before the city and its gaming operators can move forward, though, they need to swallow one final bitter pill that has to do with the gambling industry’s moribund performance in 2022. The year shed 51.4% of the total value of gross gaming revenue compared to a year earlier in 2021.

The Gaming Inspection and Coordination Bureau, cited by Inside Asian Gaming which did the original reporting, said on Sunday that the gross gaming revenue in the SAR fell to only MOP42.2bn, the equivalent of $5.3bn at current exchange rates.

What this means is that Macau had another bad year and its worst since 2004. There are several reasons why this has happened. Admittedly, Macau underwent a fraught period of regulatory changes and COVID jitters.

The government in Beijing was convinced that its strict anti-COVID-19 results would yield a single devastating blow to the pandemic and lead to the disappearance of the virus. Three years into the pandemic, Chinese people’s patience wore thin, and rioting started, prompting an immediate change in the government's stance which went from "dynamic COVID" to no COVID at all.

The virus was vanquished overnight. But this doesn’t mean that the sudden coup de grace against COVID did not still suppress results all throughout 2022, culminating in the worst performance of the past nearly 20 years. Meanwhile, the SAR also passed new gambling laws that will bind the legal makeup of casino and gaming operations in Macau over the next ten years.

All six incumbent casino concessionaires were re-elected to continue running operations, despite a last-minute bid by outsiders. The current concessionaires also agreed to considerably shift their focus in the years ahead, pulling away from an ambition to grow their gaming products with Chinese citizens and focusing on attracting well-heeled overseas visitors instead.

The onus is on concessionaires to invest billions over the next years to create the necessary conditions and boost tourism in Macau that does not fully depend on gaming moving forward. China similarly introduced an e-visa regime in 2022 to boost the number of visitors.

Image credit: Unsplash.com