Macau Politician Says Monthly GGR Rebounds to $1 Billion if Guangdong Restrictions Are Lifted

Posted on: July 4, 2020, 06:00h. 

Last updated on: July 6, 2020, 12:49h.

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Macau legislator Davis Ka Chio Fong believes gross gaming revenue (GGR) on the peninsula will bounce back to $750 million to $1.25 billion on a monthly basis when Guangdong Province reopens its border with the gaming center.

Macau Legislator Predicts $1 Billion GGR Rebound
Macau legislator Davis Ka Chio Fong believes monthly gaming revenue will rebound to $1 billion when travel with Guangdong is renewed. (Image: University of Macau)

At the midpoint of that estimate, that’s $1 billion, or more than 11 times more than the paltry $89.7 million Macau concessionaires generated in June. Fong’s comments carry some weight because, in addition to his political duties, he’s a professor of integrated resort and tourism management at the University of Macau.

Once the border with Guangdong Province starts to open, Macau’s GGR will likely recover to between MOP$6 billion (roughly $750 million USD) and MOP$10 billion ($1.25 billion USD) depending on the level of opening, “ Fong said to members of the local media earlier this week. “So it might be about MOP$8 billion ($1 billion USD).”

“But, of course, it’s hard to reinstate the GGR level as before,” he added.

Home to approximately 115 million residents, Guangdong is the mainland China province nearest to Macau and acts as a critical thoroughfare to deliver gamblers to the casino center. For months, politicians on the peninsula have been pushing their counterparts in Guangdong to relax border restrictions. But there’s been little movement on that issue.

Heavy Dependence on Tourism

The reasoning for concessionaires and policymakers pushing for relaxed travel controls is obvious: Macau’s economy depends heavily on the gaming and leisure industries.

Fong says Macau has an “urgent” need –- one that’s not felt in mainland China –- to reopen borders, because the special administrative region (SAR) derives more than half its GDP from tourism and related industries.

Another issue confounding the SAR’s rebound efforts is different policies and competing interests between the gaming center and regions that account for the bulk of Macau visits. For example, a proposed travel bubble between Macau, Guangdong, and Hong Kong is proving slow to get off the ground. That’s because the gaming center is more motivated to reopen borders, while the other regions are taking a more pragmatic approach.

As another example, Taiwan –- the third-largest contributor of Macau visitors after China and Hong Kong –- isn’t swiftly moving to relax travel controls with the gaming hub because its economy is sound and its coronavirus case count is just 449, among the lowest in the region.

Banking on a Bubble

Over the course of the coronavirus pandemic, analysts frequently say that if Guangdong reopens its border with Macau, other provinces would quickly do the same, potentially leading to the long-awaited GGR rebound.

“We have found that the majority of gamblers are local residents in this period, so we have almost touched the bottom,” said Fong. “I hope Macau can establish a travel bubble with nearby regions.”

Concessionaires believe there’s pent-up demand among gamblers throughout Asia. Some analysts project Macau’s gaming sector will recover more rapidly than its US counterpart when border controls are lifted.