Just as we saw happen with auto sales in China, Macau’s gaming revenue collapsed in February as a result of China grinding to a halt while the entire country remains mostly in lockdown as a result of the coronavirus spread.
Macau businesses closed for 15 days to help control the spread of the virus, but it cost them. Gross gaming revenue for February was just 3.1 billion patacas ($386.5 million), a 87.8% fall from 2019.
Analysts were predicting the pain ahead of time, estimating for a median of a 90% drop, according to Bloomberg.
Macau, the world’s largest gambling hub, had its government suspend casino operations from February 5th to about February 19th. The epicenter was already dealing with falling revenue numbers from 2019 – and this closure just adds insult to injury. It was the longest closure on record, second only to a 33 hour shutdown that occurred as a result of a typhoon in 2018.
When business resumed around February 20th, foot traffic at casinos was still weak. China continued to halt visas to Macau and transportation remained restricted.
Analysts continue to see the near-term outlook as “murky”. JP Morgan estimates a 24% decrease in gross gaming revenue for the year, based on a 70% drop in March and a 35% decline in the second quarter.
The same analysts said in a March 1 note: “We do not think COVID-19 will curb gamblers’ enthusiasm in a sustainable way, so its impact on the industry’s sustainable earnings power should be limited.”
It continued: “Looking at the glass half-full, we feel it could have been worse given the extensive level of disruption suffered.”
Yeah, good thinking. After all, revenues could have been down 100%.