According to game analysts, after the largest community outbreak since the pandemic began, local casino revenue aggregates could drop to near zero again.
Approximately 34 confirmed cases of Covid-19 have been discovered so far, a large number of test drives are already underway, and restrictions on travel between mainland China and the SAR have been tightened.
The border remains open, but travelers leaving Macau must present negative test results within 24 hours. This will further reduce the number of visitors and bring the total revenue level of the game to near zero in the weeks leading up to the situation being controlled and dispatched. By Sandford C. Bernstein and JPMorgan.
In addition, Zhuhai is for anyone who travels to Macau.
COVID test negative within 48 hours before crossing the border.
Macau’s finance minister says the casino will not be closed, but visits to the city are severely restricted (probably almost completely blocked) and revenues are set to plummet to near zero at least next week. increase. Probably a few weeks – GGR will be severely affected in both June and July, “Bernstein analysts said in a dispatch.
Gambling revenue in May was 3.3 billion MOP (US $ 400 million), down 68% year-on-year, up 25% from April, but well below the May 2019 hit of 26 billion MOP.
In a recently published memo, JP Morgan provided a table that estimates the “liquidity runaway” of local game concessionaires in the worst-case scenarios.
‘In this rigorous stress test, the liquidity of Sands and SJM was the shortest in the nine months to March 2023, while the liquidity of other operators such as Wynn / MGM / Melco was 1.4 / 2 years. is. […] Galaxy has liquidity available in JP Morgan’s notebook for 60 months.
The brokerage firm also warned that it would be necessary to secure 5 billion MOP for the registered capital included in the new game law amendment, at least until the end of 2022, before the new concession terms begin. This can reduce the available liquidity.
This further reduces liquidity to just one month for SJM and six months for Sands in the worst-case scenario.
However, in reality, JP Morgan expects its controlling shareholders to fund through shareholder loans, such as the US $ 500 million loan provided by Wynn Resorts to Wynn Macau last week.
Regarding the deadline for future game law revisions, Bernstein analysts point out that depending on how quickly Macau can control the latest outbreaks, “there is a risk of delaying the final decision on game law revisions and the subsequent concession bidding process.” doing.
“The legislative assembly will vote for the game law on Tuesday afternoon, and there are currently no signs that this will be delayed, but the delay is.
It would be possible if pandemic measures became more restrictive. “
“Nevertheless, he emphasized that both the finalization of the law and subsequent bids are still likely to be completed without the need for further concession extensions.”
The Gaming Act will be approved before June 26th and the current game concessions will be extended until December 31st, 2022.
