When the casinos in Singapore and Las Vegas come back to life, the world’s largest gambling center remains completely black. Casinos in Macau, an hour’s ferry ride from Hong Kong, generated $ 36 billion in revenue before the plague. The twin effects of Cubid-19 and China’s dismal economic outlook mean that recovery is far from likely.
Macau has no choice but to follow Beijing on Cubid’s strict zero policy. Closing the city Includes its largest casinos, run by the city’s six operators – Sands China, Wynn Macau, MGM China, Galaxy Entertainment, SJM Holdings and Melco Resorts. Casinos operate at the whim of Beijing regulators. All six operators’ contracts expire at the end of the current year. Operators will have to go through the re-declaration process to continue their business.
In keeping with Beijing’s emphasis on maintaining social stability, they did not fire a team and they did Burning cash reserves. But even if they could open up, casinos would have a problem. More than 90 percent of Macau visitors come from mainland China. China’s growing enforcement of domestic capital and currency controls will deter high-profile players.
Macau’s capital is linked to China’s growth, which slowed sharply in the second quarter, with gross domestic product rising just 0.4% year-on-year, well below expectations.
Rises in technology technology stocks and rising asset values were once a key source of new wealth for locals visiting Macau resorts. But property sales in June extended their declines by another 18 percent. The prices of new apartments have fallen for the tenth month in a row. On Friday, reports of a new test by Alibaba also led to a new drop in technology stock prices.
Shares of Macau operators, including MGM China, SJM Holdings and Wynn Macau, have fallen 60% in the past year. This reflects operating margins that have become negative since 2020. In both sections there are further declines ahead of us.
If you would like to receive regular updates every time we publish Lex, add us to Your FT Digest, And you will receive an instant email notification whenever it is published. You can also see each Lex column through the web page
Macau/gaming: casino operators bet on unlikely comeback Source link Macau/gaming: casino operators bet on unlikely comeback