Home Opinion The Recovery of Gaming Industry in Macau is Still a Long Way Off

The Recovery of Gaming Industry in Macau is Still a Long Way Off

Wendi SongWendi Song

With the announcement of Guangdong and Macau government on Monday night that, from July 15 onwards, the 14-day mandatory quarantine requirement imposed by Guangdong Province on all visitors from Macau are removed, it seems there is a glimmer of light for Macau, which has seen the border effectively closed since 27 March.

The day after the news was announced, the stock prices of Macau’s six gaming concessionaires all rose against the market, showing the confidence of the industry in customs clearance.

However, despite the easing of border controls, the number of mainland tourists who actually are able to enter Macau is quite limited. China stopped all group travel (including to Macau) and stopped the issuance of IVS visas to Macau and Hong Kong since 28 January, that means many of the IVS visas issued before that day have have expired or are facing expiration. 

That means that tourists from Guangdong, who accounting for around 46% of all mainland Chinese visitors to Macau in 2019 and between 30% to 35% of GGR (by Macau government data), the vast majority of whom still not able to enter into Macau. 

As a result, rating agencies have downgraded their forecasts for the industry’s recovery. Analysts at Credit Suisse, JP Morgan and Goldman Sachs all believe that Macau’s gaming revenue will gradually return to around 25% of  2019 levels in the coming months.

But there are still many variables before the gaming industry return to pre-epidemic levels.It remains to be seen whether there will be repeated outbreaks of COVID-19 in Mainland, when will the restrictions of IVS visas be reversed, and when will this “open policy” be extended to other provinces of China apart from Guangdong.

In addition, the trend of the global epidemic, the confrontation between China and the United States, and the speed of China’s economic recovery have also become challenging factors affecting the recovery of Macau’s gaming industry.

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