December best month since pandemic for Macau, but outlook uncertain

Macau ended its annus horribilis on a slightly brighter note, with December gross gambling figures showing the best performance since January.

The improvement was marginal, but it was there, with gross gambling revenue declining 65.8 percent from the year ago month to MOP7.81 billion ($973.6 million), that was slightly better than the consensus forecast for a decline of 67 percent.

For the year as a whole, GGR plummeted 79.3 percent to MOP60.44 billion. 

The December figure beat the MOP7.2 billion recorded in October, during the key Golden Week holidays and was a strong pick up from the MOP6.7 billion from November.

However, the immediate outlook remains highly uncertain given the new outbreaks of Covid-19 emerging across Asia, including in China. 

Just before Christmas Macau significantly tightened its entry restrictions following the emergence of a new strain of Covid-19 in the U.K.

Under the new policy, residents of Mainland China, Hong Kong, and Taiwan who have been to any country or region outside of Greater China within the past three weeks will not be allowed entry into the city, a special Chief Executive dispatch revealed.

Moreover, while previously an exemption was granted to foreign nationals who had remained for at least 14 days in Mainland China, that time requirement is now increased to 21 days, although there are some exceptions that will be granted.

After the release of the December figures, analysts at Deutsche Bank once again tweaked their forecasts for GGR for the next three years. It now sees a 248 percent increase in revenue in 2021 to $26.35 billion, down from its earlier view for $26.60 billion.

For 2022, it has increased its estimate to $29.44 billion from $29.31 billion, while for 2023 it sees GGR of $34.52 billion, up from $34.36 billion previously.

Even prior to the outbreak of Covid-19, Macau’s GGR had been on a declining trend. It has now recorded 15 straight months of year-on-year declines, as the trade tension between the U.S. and China ate into the VIP market. 

For 2019 as a whole, GGR came in 3.4 percent lower than the prior year.