Casino stocks roared back to life in early July on prospects of easing Chinese travel restrictions for Macau would lead to booming tourism in the world's largest casino hub. But as we found out Saturday morning, via Reuters, that's wasn't the case as gaming revenues crashed.
Gaming revenues for Macau collapsed 94.5% in July, on a YoY basis, despite travel restrictions to the area relaxed. Gambling in a pandemic, or mainly the fear of being around other people in a closed, indoor space was enough to deter Chinese mainlanders.
July's gaming revenue figure was around $163 million and in line with analysts' expectations of a 95% drop.
"Casinos are staring at heavy losses for the second quarter, with not much hope for a near-term recovery as a resurgence in coronavirus cases muddies the outlook for when China will reinstate travel visas," said Reuters.
Even with travel restrictions eased, Macau last month saw about 2,000 visitors per day, or about 98% reduction in traffic from its usually 108,000 daily average in 2019.
Shares in MGM Resorts International soared in early July on prospects MGM Macau would see an influx of mainland Chinese as Macau started to reopen. Judging from the continued decline after the pop in optimism, along with Reuters' Macau gaming revenues for the month, the road to recovery appears to be a bumpy one.
Here's our reporting on collapsing gaming revenue in the gambling hub:
- Macau Orders All Casinos To Close For Two Weeks Over Virus Outbreak
- Macau Gaming Revenue Collapses 87.8% In February
- Macau Gaming Revenues Down 97% As Travel Restrictions Take Toll
MGM Macau is heavily discounting room rates into August.
As for Las Vegas, we noted last week, it could take three years for the gambling city in the US to recover.
Macau's continued plunge in gaming revenue through the summer doesn't bode well for the global V-shaped recovery narrative.