1. Gaming

Observers say 2021 CNY unlikely to boost Macau casinos

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The prospects for Macau games were further clouded over the week-long holiday, industry commentators told GGRASIA, as several local authorities in mainland China recently issued advisory notices asking residents not to travel during the Chinese Spring Festival (CNY) holiday in February. 온라인경마

Officials in Guangdong Province next to Macau, a major source of tourism in Macau, recently asked residents to spend Chinese New Year holidays in the provinces as a precaution against the risk of spreading COVID-19. Many other Chinese provinces and cities also gave similar advice to their residents.

China's State Council has designated a public holiday for this year's Year of the Cattle from Feb. 11-17.

“This [Mainland China] recommendation only impacts the potential revenue performance of the Macau gaming industry,” said Ben Lee, a managing partner at IGAMIX Management and Consulting Ltd and also a gaming operations expert in Australia and Macau.

“The [Junkit] sector was already worried as cases of COVID-19 were reported again in several provinces even before China issued this recommendation,” Macau junket investor Luis Ram Kai Kwan told GGRASIA

“The most worrisome thing is whether China will strengthen its travel visa issuance again for a visit to Macau,” he added.

Mr Lam also said, “Overall… The junket sector is cautious, if not pessimistic, about how the business will develop during the Chinese New Year.”

“It would be an exceptional achievement if real estate's business size could reach nearly half of pre-COVID levels during this Chinese New Year,” Hoffman Ma Ho Man, vice chairman and executive director of Hong Kong-listed Success Universe Group Ltd, an investor in Macau casino resort Ponte 16, told GGRASIA

Still, mainland Chinese consumers have recently shown signs that they are “more confident in hotel reservations compared to previous periods like November,” he said.

But the Ponte 16 investor acknowledged there was some uncertainty about the COVID-19 situation on the mainland (what he calls an “intermittent outbreak”) and whether it could be successfully contained before China's New Year holiday.

the year of the plodding cattle

Junket investor Lam said, “There are a few uncertainties ahead. First, we are not sure that the epidemic can be contained well. Second, China's new law, which criminalizes the organization or solicitation of overseas gambling in mainland China, comes into effect on March 1st.” “In the case of China, we still have to wait and see how the law is enforced.”

But he said, “It's not good news (for the VIP sector). China has vowed to crack down on underground banking activities that they have already done, which has only made these activities more secretive, which undermines some players' access to gambling funds.”

Macau's junket sector is already ready to “prepare for the worst” this year, Mr Lam explained, as some local junket companies have expanded cost-cutting measures such as unpaid leave for employees.

Ma of Ponte 16 said its game operations already run without a third-party VIP gaming club. The property currently has mass play and high limit areas only.

“Mainland China's policy direction is basically to hit VIP gaming. Our projection is that revenue from VIP games in Macau could reach 15% to 20% of pre-COVID levels in 2021,” Ma told GGRASIA.

“For bulk play revenue, it could reach 80% of pre-COVID levels,” he added.

Regarding the latter part, Mr Ma further explained. “There is a dramatic increase in overseas tourism demand in mainland China. And when they (mainland consumers) can't travel anywhere in the world and Macau is the only travel bubble partner, this helps our public play.”

But game consultant Lee was less optimistic about the recovery of Macau's gaming sector. He said the process could be extended over the “next two to three years.”

“I don't think we'll see it near 2019 levels in 2021,” Lee told GGRAcia.

“Some things need to happen for us to fully recover. First, the COVID-19 vaccination should reach a critical proportion of China's population and be quite effective enough to provide a significant level of confidence to authorities on both sides of the border before testing and quarantine barriers are lifted,” Lee said.

To achieve a rapid recovery in the market, “Chinese authorities need to allow mainlanders to fully resume their trips to Macau.”


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