(Bloomberg) -- This will be a year to forget for the gaming industry in Macau, where casinos are on track for their weakest revenue haul on record as China’s rigid Covid policies and travel restrictions keep gamblers away.
The Gaming Inspection and Coordination Bureau said Thursday that casino revenue in November fell 56% from a year earlier to 3 billion patacas ($374 million). That took revenue for January-November to 38.7 billion patacas, far short of the 270 billion patacas for the same period in 2019, prior to the pandemic.
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Analysts had forecast that November revenue would drop 47% from a year earlier to 3.6 billion patacas. In November 2019, Macau’s casinos brought in 22.9 billion patacas.
- Macau’s tourist numbers remain way below pre-pandemic levels. There were about 580,000 arrivals in October compared with 2.9 million in the same month of 2019. That’s because China is persisting with Covid restrictions to curb a rise in infections, hurting Macau as the mainland is its main source of tourists.
- Macau remains off limits to tourists from most countries, but it has quarantine-free travel with mainland China. Visitors from neighboring Hong Kong face five days of hotel isolation. More than 89% of visitor arrivals in November were from China.
- Macau carried out mass Covid testing and shut a major casino resort in late October to contain a small flareup, further affecting tourism.
- The tourists that are coming are also spending less after the Chinese government cracked down on junkets in Macau, the only place in Greater China where casinos are legal.
- Even in October, when China’s Covid outbreaks were largely contained and Macau’s visitation numbers rose 77% from a year earlier, gaming revenue fell 11% from the same month in 2021. The city hasn’t released visitor data for November.
- Macau’s gaming revenue has been declining since March, when omicron spread across China. It plunged to a record low in July, when the city faced its biggest outbreak and went into lockdown for two weeks, leaving casinos with hardly any income.
- The prospects for Macau casinos are better longer term, with all six of them recently getting new licenses to continue operating for another 10 years. The new permits will take effect at the beginning of 2023.
- A Bloomberg Intelligence index of Macau casino operators jumped 56% in November, boosted by the renewed licensing announcement on Nov. 26. The gauge jumped 6.7% the following Monday. The index has risen 30% this week alone. The benchmark Hang Seng Index rose 27% in November.
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