The small territory of Macau has seen its economy shrink for years. 2020, of course, has ramped things up to an entirely new level. Gambling revenue here has been almost non-existent and many fear the city will never return to normal. Many analysts now claim that Macau’s economic recovery will take years.
It’s been a tough nine months for this gambling hub. Fortunately, things may begin to improve here in a big way. Today, we’re going to talk about what analysts expect to see in Macau over the next couple of months.
Let’s get into it!
Casino Revenue is Slowly Beginning to Increase in Macau
About a decade ago, Macau was widely considered to be the largest gambling destination in the world. Many of the top US casino companies built massive casino-resorts in this city. Revenue was increasing and VIPs would flock to Macau on a regular basis.
Macau has always relied on gamblers visiting from Mainland China. All forms of gambling are banned on the mainland, making Macau the perfect destination to escape and place some bets. A huge number of junket businesses were set up here specifically to draw in VIP players from China.
The past few years have taken a serious toll on this city. As China’s economy shrunk from its trade disputes with the US, fewer nationals here were traveling and gambling in Macau. Casino revenue was dropping here on a consistent basis.
2020 proved to be even worse for this city. At one point, all of Macau’s gambling venues were completely shut down. It didn’t take long to open, yet tourism has been extremely slow to reopen here. Things are finally starting to improve, though.
While gambling revenue remains significantly lower here than it was in 2019, it’s now clear that casino earnings are increasing month-by-month. With many travel restrictions between Macau and Mainland China now lifted, this revenue is expected to increase even more over the next few months. No one, however, expects to see things turn around here overnight.
Analysts are taking a good look at the situation in this territory. Many of them are now predicting when Macau will finally return to normal.
Analysts Make Predictions on Macau’s Economic Recovery
Macau isn’t the only major gambling destination hit hard in 2020. All of the world’s casinos are have seen their earnings drop. Macau is unique in that its revenue is still almost non-existent months after casinos here reopened.
The main issue was the travel restrictions set between Macau and China. Not long ago, China shocked the gambling world by announcing it was cracking down on money being sent between the Mainland and Macau junkets. Gamblers instantly began withdrawing their money and casinos are already feeling the effects.
Ben Lee, founder of Macau gaming consultancy IGamiX, spoke about the effect this is having on the city to the media this week.
“The crackdown on the cross border transactions have finally rammed home the inconvenient fact that Macau has always been dependent on outflow of funds from the mainland,” Lee said.
VIP players are crucial for bringing revenue to casinos in Macau. China’s new regulations are making it difficult for these high-rollers to gamble here. Fortunately, travel restrictions are now lifted and more casual gamblers are likely to begin making the trip to this city.
Most analysts now predict that Macau’s economic recovery will take years. High-rollers are not the key to this recovery. A steady flow of tourism and casual gamblers now seems instrumental to this territory returning to normality.
Japan’s Lawmakers Are Looking at Macau With Caution
Even with the difficulties of the past few years, Macau remains the top gambling destination in Asia. That title might not last forever with Japan now entering the game. Back in 2018, lawmakers here approved a measure to allow three major casino-resorts to open in the country.
This was a monumental decision. Previously, Japan’s government banned virtually all forms of traditional gambling. There are, however, a large number of gambling fans here. It didn’t take long for analysts to predict this would become the third-largest casino market in the world.
Getting this industry up and running has taken much longer than many predicted. Lawmakers here have found it difficult coming up with specific regulations towards the casinos here. As of now, no casino licenses have officially been awarded here.
The events unfolding around the world have made this process even more difficult. Recently, several of the top US casino companies have decided to withdraw their plans to break into this country. Even MGM Resorts, one of the last ones holding out here, now claims it’s skeptical to enter Japan’s casino market.
Japan is now likely taking a close look at Macau’s economic recovery. Some feel it’s time for the country’s government to simply scrap these plans. Instead, lawmakers here can focus solely on the 2021 Summer Olympic plans.
Do you expect Macau to be back to normal this time next year? Let us know in the comments section below.
Kevin Oldroyd
A longtime sports and gambling enthusiast, Kevin looks to present up-to-date and reliable information for readers. If he’s not writing, he’s probably watching MMA or playing blackjack. …
