The Asian branch of financial services giant JP Morgan Securities has reportedly announced that it expects aggregated gross gaming revenues for the 39 casinos in Macau to reach as high as $36.58 billion for the entirety of 2022.
According to a report from GGRAsia, the Hong Kong-headquartered enterprise used an official Wednesday filing to detail that this would represent an increase of 0.3% when compared with the $36.47 billion chalked up for 2019 and signal that the city’s casino industry had finally recovered from its coronavirus-induced slump.
The source reported that Macau has recently recorded six consecutive months in which aggregated gross gaming revenues have fallen by at least 90% year-on-year with its combined tally for the first three quarters of 2010 standing approximately 82% lower on a comparative basis at just $4.83 billion. JP Morgan Securities purportedly pronounced that this downturn triggered by the coronavirus pandemic has since been exacerbated by ‘mounting uncertainty’ in the VIP sector as well as the ‘nuisances’ associated with visa arrangements for mainland Chinese tourists.
Although all residents of China have been able to obtain visas for the purposes of travelling into Macau since September 23, the financial institution reportedly declared that the whole process has recently become ‘much more inconvenient’ as these permits are now only valid for one week following a ten-day processing period. It purportedly stated that a ‘stigma’ moreover remains that often prevents prospective gamblers from applying to visit the former Portuguese enclave.
JP Morgan Securities’ filing reportedly read…
“We were overly hopeful on the prospect of pent-up demand, which we thought would outweigh the nuisances related to travel arrangement to Macau and stricter capital control.”
The brokerage reportedly proclaimed that the VIP casino market in Macau is currently also suffering due to a ‘broadening clampdown’ on overseas and illegal gambling that has seen mainland authorities investigate junkets ‘and even some big players’ before freezing their accounts. It purportedly stated that this segment ‘remains very weak’ with business volumes over the past two months ‘showing little if any improvements’.
JP Morgan Securities reportedly predicted that the enclave’s casino market would see significant improvements if the Chinese government reinstated its estate of self-service visa processing kiosks or lifted coronavirus-related restrictions that currently hinder travel between Hong Kong and Macau. However, GGRAsia additionally purportedly explained that this latter notion shows little sign of happening any time soon as local officials recently extended until at least the end of the year the 14-day quarantine provision that exists between the two cities.
Reportedly read the filing from JP Morgan Securities…
“We think Hong Kong’s importance lies in its position as an avenue for capital flow, where a sizable portion of liquidity goes through Hong Kong into Macau.”