Analysts stated to Lusa today (Wednesday) that the drop of more than 77 per cent in casino revenues in Macau reported in the first half of this year is “a disaster” for the local economy, and could lead to further redundancies.
“It is a disaster for the gaming industry and, in particular, for the economy of Macau,” Pedro Cortés, a gaming legal expert, told Lusa.
The Portuguese lawyer from Rato, Ling, Lei & Cortés stressed that these negative results were already expected due to the control measures of the COVID-19 in the territory, such as the almost total closure of the borders that led to the almost complete paralysis of the Macau economy, highly dependent on tourism and gamblers in casinos.
However, he stressed that “Macau must begin to seriously think about changing the strategy, otherwise the disaster for the economy will be even greater”.
Gaming revenues in Macau fell 97 per cent in June and more than 77 per cent in the first half, compared to the same periods in 2019.
If in the first half of 2019 local gaming operators had raised MOP149.5 billion, with gross revenues now at MOP33.7 billion.
Meanwhile, gambling expert Carlos Eduardo Coelho underlined to Lusa that the numbers advanced today are “extremely disheartening for Macau’s economy, particularly for gaming concessionaires”, not least because about 80 per cent of Macau’s revenues “come from the revenue generated by the special tax on gambling and other contributory duties of gambling concessionaires”.
Macau casinos closed 2019 with revenues of MOP292.4 billion.
The Macau Government, recalled the Portuguese lawyer from the MDME office, has already indicated that it’s budget will be cut by 10 per cent for the year and that it will “move forward with austerity measures in the various services”.
On Tuesday, the Macau authorities told Lusa that since the economic impact in Macau was felt, in particular with the temporary closure of the casinos in February, and until May, more than seven thousand contracts were cancelled or not renewed in Macau.
Now, Carlos Eduardo Coelho is betting that the redundancies at the game concessionaires will continue: “for the gaming concessionaires it is likely that these results will lead to the continued implementation of measures to cut operating costs, including dismissals and stopping activities considered non-essential” he stressed.
Local residents are not only “suffering the economic consequences of this pandemic much more intensely” due to “the budgetary surplus accumulated in the past years,” he noted.
For Pedro Cortés, the solution to the crisis in the world capital of gambling has to go through the relaxation of border impositions. “Tourists from Guangdong Province must be able to visit Macau. The same is true of Hong Kong residents,” he said.
“All countries in the world have already relaxed the measures because they realized that they would collapse quickly if they did not. Now, Macau has not yet collapsed, but how many more months can we have this glass dome? There is still no vaccine, it is true, but there are already some therapies,’ noted the Portuguese lawyer.
With China’s tourist visas to Macau suspended, the number of visitors from the interior of China fell in May by 99.4 per cent, in annual terms. In the first five months of the year, just over 3.2 million visitors entered Macau, 81.1 per cent less than in the same period last year, in a territory that in 2019 received almost 40 million visitors.
Carlos Eduardo Coelho also looks at a phased opening of Macao’s borders, without mandatory quarantine, as a measure to mitigate the economic impacts of the territory.
“It is, therefore, necessary to create the much-discussed ‘circulation bubble’ between Macau/ Hong Kong/ Guangdong”, he stressed, despite recognizing that this decision does not depend only on Macau, but also on the Chinese and Hong Kong authorities.
This measure, according to Carlos Eduardo Coelho, must be accompanied by reinforcement of measures of the gaming concessionaires “necessary to combat the spread of the virus (be it hygiene, social distance in gambling areas, use of cashless means of payment) or others) that convey the assurance that everything will be done to prevent a new Covid-19 outbreak.”
Pedro Cortés also believes that the Government should extend the licenses of the current operators, which is only expected to happen in two years, since “the crisis we have at hand is overwhelming and the sooner a signal is given to the sector, the less negative impact it will have the economy”.
For this reason, he stressed, Macau should “immediately extend concessions and subconcessions for at least another year beyond June 27, 2022”.