Fitch Ratings Inc says it expects Macau’s gross gaming revenue (GGR) this year to be “nearly 65 percent below 2019 levels”, i.e., those before the onset of the Covid-19 pandemic. Such revenue would recover to “35 percent below 2019 by 2022,” and fully recover by 2024, said the institution in a Tuesday report.
Casino GGR in Macau was just above MOP292.4 billion (US$36.5 billion) in full-year 2019, before the health crisis took hold. According to Fitch estimates, the city’s casino GGR would reach about MOP102.4 billion this year.
In April, the ratings agency said it expected a recovery in Macau GGR “to about half” of pre- Covid-19 levels.
The Macau government has forecast casino GGR at MOP130 billion for 2021, 44.5 percent down on 2019 levels, saying that the recovery from the pandemic would “take time”.
Aggregate casino GGR in the first eight months of 2021 stood at nearly MOP61.91 billion, an increase of 70.1 percent on the MOP36.39 billion achieved in the prior-year period. The result was down 68.8 percent from the first eight months of 2019.
Fitch’s report focused on U.S.-based casino operator Las Vegas Sands Corp, the parent of Macau gaming operator Sands China Ltd. The parent group also runs – via a subsidiary – the Marina Bay Sands casino complex in Singapore.
In the memo, Fitch said it assumed a “slightly faster trajectory” for Singapore, “which has a high vaccination rate, benefits from strong domestic demand, and is starting to open up quarantine-free travel with certain… countries.”
In Tuesday’s report, Fitch affirmed Las Vegas Sands’ issuer default rating at ‘BBB-’, an investment grade, and gave it a negative outlook. The same action covered Sands China and Marina Bay Sands Pte Ltd.
The move took into consideration Fitch’s revised recovery projections in Macau and Singapore, “which are weaker relative to prior expectations,” stated the institution.
It stated: “Despite the near-term ongoing weakness caused by international travel restrictions, Las Vegas Sands is expected to return below Fitch’s 3.5 times net leverage sensitivity by 2022.”
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Aggregate number of licensed junkets in Macau as of January 2022