February could see 95pct y-on-y fall in gaming revenues – Brokerage

If the 15-day suspension imposed this month on casino operations by the Macau government is extended to the rest of the month, February could record a 95 per cent year-on-year, analysts at Sanford C. Bernstein predict.

This would mean February could record just around MOP1.26 billion (US$158.5 million) in gaming revenues

The suspension was initiated on February 5 and is set to terminate on midnight February 20, but with local authorities having expressed the suspension could be extended if they assess that the coronavirus outbreak situation has not yet stabilised.

‘There is a strong possibility of an extension of the shut-down order,’ the brokerage indicated.

However, it was noted that gaming revenues had already registered a decrease before the suspension since the Chinese New Year due to the Coronavirus crisis, as visitor numbers kept falling and China stopped all group travel and the issuance of individual travel visas.

Local gross gaming revenues having already dropped by 11.3 per cent year-on-year in January to MOP22.12 billion even before the suspension

Meanwhile, Police authorities stated this week that the number of tourists that entered Macau between January 27 and February 7 had dropped 90 per cent to just some 174,000.

Analysts also previously predicted that gaming results in the first quarter of this year could fall by as much as 50 per cent year-on-year.

‘The reversal of these restrictions will be key for resumption of business in Macau […] a conservative look at the situation leads one to conclude that the economic impact on China, the impact on travel and the number of infections and fatalities will be worse than SARS(even with what looks to be a much lower mortality rate),’ analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu predicted.

‘For Macau, the near term looks bleak; but we see a solid recovery in place in 2H followed by a strong 2021’