Analysts from S&P Global Ratings said in a webinar held yesterday that it is cutting Macau casino gross gaming revenue (GGR) forecasts for 2022 and 2023 due the city’s surge in COVID-19 cases and the government’s strict control measures.
The US ratings agency predicts that Macau’s overall GGR this year will only reach 20-30 percent of 2019 levels, down from the previous forecast of 30-40 percent set at the beginning of the year, while Macau’s 2023 mass GGR forecast has been revised down to 50-70 percent of 2019 levels from the 80 percent forecast previously.
Still, S&P described the casino operators’ liquidity profiles as “solid”, with each operator having between 18 and 20 months of liquidity even under a zero-revenue scenario, the New York-based agency said.
Meanwhile, S&P Global Ratings Associate Director for Corporate Ratings Aras Poon forecast a “slow” recovery for Macau’s gaming sector, saying that the outbreak both in Macau and the mainland has limited visitation to Macau, which would not just delay recovery for this but also next year.
S&P revised its predictions at a time when Macau is facing its worst COVID-19 outbreak and strictest prevention and control measures since the pandemic began to affect the special administrative region in January 2020.
Macau’s casino operations have been suspended since 0:00 on Monday in line with the government’s weeklong special COVID-19 control period, based on an order by Chief Executive Ho Iat Seng to prevent the spread of the novel coronavirus. Not only casinos but other businesses remain closed today. The special control measure, which is not a citywide lockdown but involves restrictions on the movement of people, ends at 11:59 on Sunday.
SJM’s Grand Lisboa casino-hotel was locked down last week by the government after it was found to be linked to a virus cluster. Its lockdown (“red zone”) has meanwhile been lifted.
Earlier this week two more hotels in Cotai, Studio City Hotel and Broadway Hotel, run by Melco and Galaxy respectively, started to be used as quarantine hotels for COVID-19 medical observation.
The last time the government closed Macau’s casinos was in February 2020 when COVID-19 first broke out and the closure lasted 15 days.
Macau’s lawmakers recently passed a government-initiated amendment on Macau’s gaming industry. The six operators’ concessions and sub-concessions have meanwhile been extended until the end of the year. The government plans to invite bids for up to six concessions in due course. The bidding schedule has still to be announced. Sub-concessions are no longer allowed by the amended law.
The legislature is expected to start debating and reviewing the government’s law on the junket sector soon.
The two charts were provided by S&P yesterday.
