Macau casino operators lost US$1.5bn in Q3

Morgan Stanley has reported that casino operators collectively saw negative corporate EBITDA of about US$600m.

Macau.- The two-week closure of the casinos and lack of tourists in July as a result of a new outbreak of Covid-19 cases contributed to a loss of US$1.5bn for the Macau gaming industry in Q3. Morgan Stanley has reported that the industry’s net debt rose to US$24bn, and it expects that could rise again this quarter depending on the impact of e-visa/package tours and China’s Covid-19 zero policy.

Casino operators collectively saw gross gaming revenue (GGR) of MOP5.5bn and negative corporate EBITDA of about US$600m for the third quarter. There were just 7,700 visitors frmo mainland China, down 50 per cent when compared to the previous quarter. The number of visitors improved in September.

According to Morgan Stanley, the industry will have burnt US$1.5bn of cash in Q3 (vs. US$1.4bn in Q2 2022). It forecasts that EBITDA will reach only 8 per cent of 2019 levels in the last quarter of the year. 

Fitch: Macau’s gaming sector won’t see full recovery until beyond 2024

According to Fitch Ratings Inc, continued Covid-19 cases in China and regulatory uncertainty means that gross gaming revenue will reach only 70 per cent of 2019 levels in two years’ time. They warned that as well as China’s likely continuation of its zero-Covid policy, slower economic growth could also affect gaming in Macau.

Local gaming expert Wang Changbin has previously predicted that China’s zero-Covid policy is likely to continue until 2023, which means a continued drawn-out recovery for Macau’s gaming industry.