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S&P slashes Macao casino GGR forecasts for this year and next

US ratings agency predicts 2022 GGR as low as 20% of 2019 levels, recovering slightly in 2023, at time of flux for city’s gaming industry.

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US ratings agency predicts 2022 GGR as low as 20% of 2019 levels, recovering slightly in 2023, at time of flux for city’s gaming industry.

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UPDATED: 22 Dec 2023, 4:42 am

Analysts from S&P Global Ratings have warned that they are cutting Macao’s casino gross gaming revenue (GGR) forecasts for 2022 and 2023 due the city’s surge in Covid-19 cases and the government’s strict control measures.

The US ratings agency predicted via a webinar held yesterday that Macao’s overall GGR this year will only reach 20-30 per cent of 2019 levels, down from the previous forecast of 30-40 per cent set at the beginning of the year, while Macao’s 2023 mass GGR forecast has been revised down to 50-70 per cent of 2019 levels from the 80 per cent forecast previously.

Still, S&P described the casino operators’ liquidity profiles as “solid”, with each operator having between 18 and 20 months of liquidity even under a zero-revenue scenario.

Meanwhile, S&P Global Ratings Associate Director for Corporate Ratings Aras Poon forecast a “slow” recovery for Macao’s gaming sector, saying that the Covid-19 outbreak both in the city and mainland China has limited visitation to Macao, which would delay recovery for both this and next year.

S&P revised its predictions at a time when Macao is facing its worst Covid-19 outbreak and strictest prevention and control measures since the pandemic struck in January 2020.

Macao’s casino operations have been suspended since Monday in line with the government’s week-long partial lockdown to prevent the spread of the novel coronavirus. Casinos and all other non-essential businesses remain closed today. 

SJM’s Grand Lisboa Hotel was briefly locked down last week by the government after it was found to be linked to a virus cluster. Earlier this week, two more hotels in Cotai, Studio City Hotel and Broadway Hotel, run by Melco and Galaxy, were pressed into use as quarantine hotels for Covid-19 medical observation.

The government last shut Macao’s casinos in February 2020 when Covid-19 first broke out; the closure lasted 15 days.

Macao’s lawmakers recently passed a government-initiated amendment on the city’s gaming industry. The six operators’ concessions and sub-concessions have meanwhile been extended until the end of the year. The government plans to invite bids for up to six concessions in due course. The bidding schedule has still to be announced. Sub-concessions are no longer allowed under the amended law.

The legislature is expected to start debating and reviewing the government’s law on the junket sector soon, The Macau Post Daily reported. 

 

UPDATED: 22 Dec 2023, 4:42 am

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