Necessary Covid-19 control measures are nonetheless sapping energy from Macau’s casino floors and helping to slow revenue recovery, says Alidad Tash, a former senior vice president of gaming operations and strategy at Macau licensee Melco Resorts and Entertainment Ltd, and now a working as a consultant.
But the investor and player appeal of Macau will remain, thanks to its access to a huge consumer market in mainland China – and other parts of Asia once pandemic-related travel restrictions ease – and because it is developing a “cleaner” financial image, with its dependence on the junket trade for VIP players, likely to dwindle, added Mr Tash.
He made his remarks while giving a presentation on Wednesday at an event hosted by France Macau Chamber of Commerce.
Covid-19 countermeasures and enforced distance between casino customers – in terms of limiting seat numbers at gaming tables and slot machines and customers interacting on the floor – had made gambling currently in Macau a “very clinical” process, remarked Mr Tash, founder and managing director at 2NT8 Ltd.
“That’s why” Macau gaming earnings were “not where they are supposed to be,” he suggested to his audience.
Currently, just to get on the floor, casino customers in Macau need to show a valid certificate of freedom from Covid-19 infection. In any case, residents of mainland China – the only Macau tourism customer segment from outside the city that is currently entitled to travel-bubble status with Macau – must have a test certificate issued within seven days of arrival, just to get into Macau without undergoing a 14-day quarantine on arrival.
Those turning up at Macau’s casino entrances also need to have their body temperature checked. Casino-floor table dealers are also required to put on masks, and the Macau government mandates that any gaming area inside a casino must limit the tally of gaming tables in operation.
More time is needed for consumers to “feel comfortable” not only about making leisure trips but also about spending on non-essentials in general, suggested Mr Tash.
Recovery “is going to take a while,” perhaps until “2023, 2024,” Mr Tash remarked; adding that currently “you can’t even get here from some other countries,” due to travel restrictions.
The change in the structure of Macau gaming revenue – from VIP to mass play – was likely to continue, as China has had a “further crackdown” on capital flow out of China, including tighter monitoring of money for overseas bets, noted the consultant.
The Macau-centred VIP junkets are likely to “consolidate” in terms of numbers in the market, suggested Mr Tash. “They are going to be much more corporatised – much cleaner than before,” he added, remarking that should be “good” for the outlook of Macau’s casino sector.
Macau was the place that could make Chinese patrons “feel both at home and abroad at the same time,” he stated.
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Analysts at Morgan Stanley