Not surprisingly, Macau’s January revenues tumble even though a drop in income was on the cards. This was down the effects of the Coronavirus. But the magnitude of the drop has taken analysts and commentators by surprise. Gambling revenues for the month of January took a serious nose-dive when compared with figures from a year earlier.
Introduction: Macau’s January Revenues Tumble
The final results were down 11.3% to $2.76 billion from $3.11 billion a year earlier. These figures are from the official Gaming Inspection and Coordination Bureau. As from Feb 03, the virus has been responsible for over 300 deaths. The are over 14,000 cases around the globe. The first death outside China was recently from the Philippines. And on January 22nd we saw the first fatality from Macau itself. So far there have been no further cases. But with China’s reluctance to be totally open about numbers, it’s difficult to know the real truth.
A Freeze on Travel Visa
The speculation is that if the Coronavirus outbreak in Macau could be contained, then the effects on the gambling economy would be negligible. But that was before the first reported death. Now the Chinese government has banned all movement by freezing travel visas. Gamblers use these to visit from the mainland. This is without a doubt the main reason why Macau’s January revenues tumble to such a degree. On the other hand, online casinos like King Billy Casino, should remain unaffected. There are also a number of other measures in place with the design to restrict movement. It’s thought that there restrictions will only have a minor effect on online gambling sites in Macau.
Macau’s January Revenues Tumble: Las Vegas Sands Suffering
In December, before the worsening of the outbreak, analysts were forecasting an modest 2% drop for January’s receipts for Macau’s gambling hub. Now online gambling news in Macau is reporting that the figure has seen a drastic rise to 9.7% as the situation worsens. One of Macau’s largest operators is the Las Vegas Sands, which controls 5 of the Islands biggest gaming properties. It was the first company in Macau to report it’s forth-quarter earnings. Executives spoke about the impact of the Coronavirus during a conference call on Wednesday.
Keeping An Optimistic Face
Sheldon Adelson, the CEO and Chairman referred to the situation as being “unique and serious.” The President and COO, Robert Goldstein said it might be “foolhardy” to imagine that the company could easily offset the 80% decline in visits. The idea is that this could be done by better managing costs over the short term. Although the management did address the Coronavirus outbreak, there was a failing to provide any more detail than that which is already available in the public sphere. An analyst from Stifel, Steven Wieczynski, points out that, “We are not surprised by this decision, as we sense the situation remains very fluid at this point. That said, we were encouraged by management’s affirmative commentary regarding the potential for pent-up demand to drive outsized growth throughout the market once the virus is under control and business returns to normal.”
This Could Get Much Worse
The talk among industry observers is that the outbreak needs to be under control soon. Otherwise the January 11.3 % decline could be a tiny drop in comparison with the possibility of a 30% tumble. The potential for such a huge fall is certainly there. Right now Beijing is limiting all inter country travel. So ot follows there will be serious repercussions for many destinations which rely on the Chinese tourist trade. These include, not just Macau, but also Hong Kong and Taiwan. Let’s hope that Macau’s January revenues tumble can be reversed soon. In the mean time, check out King Billy Casino. As you’re playing from home, you’ll be perfectly safe.