Macao Gambling Industry Revenue Increased 45.4% In The First Half Of The Year

Since the outbreak of Xinguan epidemic in the world, Macao, known as "Oriental Monte Carlo" and "Las Vegas in Asia", has been greatly affected. The Macao Gaming supervision and Coordination Bureau recently announced that the gaming revenue in June was 6.535 billion Macao dollars, a decrease of 3.91 billion Macao dollars or 37.4% on a month-on-month basis, a jump of 812.5% over the same period last year.

According to the data, in the first half of this year, the total gambling revenue amounted to Macao $49.023 billion. The reporter noted that although it has increased by 45.4% compared with the same period last year, there is still a big gap compared with the Macao dollar 149503 billion in the same period of 2019.

Zeng Zhonglu, Professor of gambling tourism teaching and research center of Macao Institute of technology, told reporters of Southern finance and economics, "the gambling revenue in the first half of this year is about 30% of that before the outbreak of the new crown epidemic. At such a low income level, a lot of gambling companies are losing a lot

The market trend of Macao's gambling stocks since this year also reflects this expectation. Market investors seem not optimistic about the future of the gambling industry. According to wind data, from the beginning of 2021 to July 5, except Galaxy Entertainment (00027. HK) rose slightly by 1.49%, other gambling stocks fell. Among them, MGM China (02282. HK) decreased by 15.32%, Melco International Development (00200. HK) decreased by 6.9%, Wynn Macau (01128. HK) decreased by 6.91%, Jinsha China (01928. HK) fell by 4.26%, and SJM Holdings (00880. HK) fell by 3.34%.

The average daily number of passengers dropped by 50% month on month in June

Gambling revenue in June was the lowest in a month since the first half of this year. The average daily gaming revenue in June was Macau $218 million, a decrease of Macau $119 million compared with the average daily average of Macao dollars 337 million in May.

The sharp drop in visitors to Australia has undoubtedly affected the performance of gambling revenue. According to the data disclosed by the Macao tourism administration, the daily average number of visitors to Macao in May this year was nearly 30000. However, affected by the outbreak of the epidemic in Guangdong at the end of May, the number of tourists visiting Macao in June dropped to 15000-16000 per day.

A gambling industry personage analyzed to the southern finance and economics Omnimedia reporter that the relatively low gambling income in June was mainly affected by the epidemic prevention and control. Prior to this, a wave of local epidemics occurred in Guangdong Province. Personnel from some areas of Guangdong Province need to receive 14 days of medical observation when entering the country. Guangdong and Macao Customs clearance must hold the negative report of nucleic acid test within 48 hours. As a result, the number of tourists visiting Macao has greatly decreased. Therefore, the sharp decrease of gambling income in Macao in June is in line with the forecast.

Tourists from Guangdong Province have always been the main source of visitors to Australia. Taking the data of inbound tourists in May as an example, according to the statistics and Census Bureau of Macao, the number of inbound tourists in May was 866063, of which 795389 were from mainland China, accounting for 91.84%. The number of passengers from nine cities in Dawan district was 429712, accounting for 49.62%; There were 64265 passengers in Hong Kong, accounting for 7.42%.

According to a report issued by Citigroup, Macao's gaming revenue recorded 6.5 billion Macao dollars in June, which was better than market expectations, indicating that the market is too pessimistic. It is expected that the governments of the mainland, Hong Kong and Macao SAR will try their best to promote customs clearance. Once zero local diagnosis continues, it is believed that the relaxation of customs clearance policy will be accelerated.

The relaxation of restrictions on the entry of Hong Kong residents into Macao has always been a matter of concern. According to Dai Huahao, medical director of Macao Earl general hospital on July 5, more time is needed to observe the development of the situation due to the recent infection cases among the staff of quarantine hotels in Hong Kong; At the same time, Macao and the mainland have cooperated closely in the joint prevention and control of the epidemic, and the two places have been taking consistent anti epidemic measures. At present, it is still necessary to make further communication and evaluation with the relevant departments in the mainland, and the specific implementation time will be announced.

The development of epidemic situation in the second half of the year is still a key factor

A number of interviewees told reporters that the development of the epidemic is still a key factor in gambling revenue in the second half of the year.

"The gambling revenue performance in the second half of the year mainly depends on the epidemic situation." Zeng Zhonglu said that if the epidemic situation in the mainland, especially in Guangdong Province and Hong Kong, is further improved on the existing basis, and is optimistic about the performance in the second half of the year, it will be better overall than in May, "but it is still difficult to recover the short-term gambling income to the level of 2019.".

Lu Kaiyan, vice president of the Macao Development Strategy Research Center, also said that the future economic forecast should depend on the development of the epidemic situation. The number of gambling revenue in May was good, only Macao's gambling revenue fell in June due to the local epidemic in Guangdong. Therefore, as long as there are no large-scale public health emergencies in the second half of the year, and after the vaccine popularization rate increases and the communication of public health events is strengthened in the surrounding regional cooperation, it is believed that the gambling income can maintain a stable growth.

Many institutions forecast Macao's gambling revenue in July. According to Daiwa's report, assuming that the tourism bubble of Hong Kong and Macao will be implemented in mid July, it is predicted that the total daily gaming revenue in July will reach 270-290 million Macao dollars. On the other hand, Citi estimates that Macao's gaming revenue in July will reach 8 billion Macao dollars, or an average of 258 million Macao dollars a day.

According to a report issued by Citigroup, it is estimated that the positive impact of the relaxation will not be apparent until the fourth quarter of this year, and the choice of mainland tourists to go out is relatively limited. The bank estimates that Macao's gaming revenue in the fourth quarter of this year will reach 70% of its level in 2019, and cut its forecast for 2021 to Macau $126 billion, equivalent to 43% of its level in 2019.

Gambling enterprises seek non gambling business development

Gambling tax is the main source of income in Macao. According to the data of Macao Finance Bureau, Macao's public revenue in 2019 will be 133.506 billion Macao dollars, and the gambling tax will be 112.71 billion Macao dollars, accounting for 84.42%. Affected by the epidemic situation, the gambling tax revenue in the first quarter of 2021 is only 9.171 billion Macao dollars, which is 50.3% lower than the Macao dollars of 18.484 billion in the same period of 2020.

"Win or lose" reflects the pattern of "one industry dominating" in Macao. To this end, the Macao SAR government has been encouraging gambling enterprises to increase their investment in non gambling business, and promote better linkage development between gambling industry and other industries, such as tourism and exhibition industry.

Prior to this, many gaming companies disclosed plans for the opening of new entertainment facilities in their financial reports. For example, galaxy entertainment is expected to open Galaxy phase 3 in the second half of 2021, and Melco international development plan will launch Melco shadow pool phase II in 2022.

"Under normal circumstances, gaming companies are actively seeking non gaming development. Due to the re bidding of gambling license, all companies are striving to create better performance and gain points for obtaining gambling license. " Zeng Zhonglu said.

According to Gu Ximin, an analyst at Minsheng securities, in the new round of bidding for gaming licenses, the Macao SAR government will focus on the following three aspects: experience in the gaming industry; Investment with significant interests in the Macao SAR and the proposal and nature of new investment; It will contribute to the diversification of tourism development and the future employment market of Macao.

However, affected by the epidemic situation, the opening time of many projects of Macao gambling enterprises has been delayed. For example, the "shanglisboang" project completed at the end of 2019 is postponed from the end of 2020 to the first quarter of 2021, and then postponed again.

Zeng Zhonglu analyzed that although the business income of gambling enterprises decreased significantly last year, they basically did not fire employees to protect employment. As a matter of fact, gambling enterprises are heavily burdened and their finance is very tight.

The outline of the development planning of Guangdong, Hong Kong and Macao Great Bay area clearly states that it is necessary to promote the tourism development of the Great Bay area, enrich the excellent tourism routes of Guangdong, Hong Kong and Macao, develop high-speed rail "one journey, multi stop" tourism products, and build a world-class tourism destination of Guangdong, Hong Kong and Macao.

However, in Zeng Zhonglu's opinion, the effect of tourism market integration between Macao and the mainland cities in Guangdong, Hong Kong and Macao is not satisfactory. For example, most of the visitors to Zhuhai Chimelong will not come to Macao. Because there are differences in the tourist market of the two places, in addition, the time for guests to travel will not be too long. If Zhuhai adds more tourism facilities in the future, it may be able to better radiate to Macao.

Tang Xiuli, a member of the Macao economic society, said that gambling enterprises could cooperate to invest in Hengqin to operate non gambling projects to solve the problem of insufficient land resources and tourism carrying capacity. By integrating the tourism resources of the two places, building an integrated tourism market, providing leisure and entertainment with non gambling elements, and supporting each other to build one of the preferred destinations for mainland tourists and even international tourists, Stimulate passenger consumption.

?