Macau junket promoter Rich Goldman Holdings has issued a profit warning for the six months ended December 31, 2019, due mainly to the impact of the China-U.S. trade war on its gaming revenue, and the drop in tourists from Hong Kong due to continued social unrest.
Rich Goldman also noted an increase in the group’s depreciation expenses resulting from the group’s hotel operation business following the completion of the acquisition of the remaining 70% interest in a hotel property in April 2019.
The loss is, however, partly offset by the increase in revenue from its money lending business.
Speaking about the recent casino shut down, which was imposed by the Macau government in an effort to contain the spread of the coronavirus, Rich Goldman says it is currently assessing the impact of the suspension on the Group’s gambling business, which may, in turn, have a material adverse impact on the financial performance and position of the Group.
This Dossier results from the “Life After POGOs” editorial project by Asia Gaming Brief which culminated with a pop-up digital forum on 9th December to discuss potentials ramifications in the industry.
The local government has decided to extend tax incentives for the two casinos facing the economic challenges of the pandemic through the end of 2020. This two-month extension is estimated to reduce tax intake by about 7.3 million rubles (US$96,000).
Over the years, many of the answers have been remarkably prescient in their forecasts for the near-term direction of Asia’s gaming industry. However, we can safely say that no one came anywhere close to guessing
what 2020 may have had in store.
While nowhere in the world has escaped the economic fallout from the Covid-19 crisis, Macau has been hit harder than most, with forecasts for gross domestic product to shrink more than 50 percent this year.