Macau gaming revenue rebounds on CNY tourist boost

Macau

MACAU casinos are showing tentative signs of recovery from an extended slowdown, with gaming revenue rising 6.1 per cent in February from a year earlier as tourists flocked to the city during the Lunar New Year holiday.

Gross gaming revenue was 7.76 billion patacas (S$1.3 billion), according to the Gaming Inspection and Coordination Bureau. The results slightly trailed the median analyst estimate of a 7 per cent year-on-year increase.

Revenue rose 22 per cent from the previous month, though was down 69 per cent from pre-pandemic levels in 2019.

Macau saw a jump in visitors during the 7-day Lunar New Year holiday that occurred in late January and early February, with arrivals up 25 per cent from a year earlier to almost 114,000. Still, that's 91 per cent below pre-pandemic levels.

While tourism has slowly picked up, the enclave continues to face headwinds.

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JPMorgan Chase & Co said in February that local media had reported some mainland cities had tightened visa approvals for residents seeking to visit Macau.

China's Minister of Public Security Zhao Kezhi urged a further crackdown on cross-border gambling, raising concerns over the potential impact on high-rolling bettors in Macau's US$3.5 billion VIP sector.

The sector has been the focus of an unprecedented crackdown that's included the arrest of the heads of the city's 2 largest junket operators. Analysts expect VIP revenue to plunge 47 per cent this year.

There's also heightened concern in mainland China about the virus spreading from Hong Kong, which is in the middle of its worst ever outbreak. Several travellers from Hong Kong have tested positive in Macau, and the gambling hub has tightened entry requirement for visitors from the city.

The Bloomberg Intelligence index of Macau's 6 casino operators fell 4 per cent in February compared with the benchmark Hang Seng Index, which dropped 4.6 per cent. BLOOMBERG