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Published: 14:16, June 02, 2022
Macao's casino losses engulf gambling hub as no quick fix in sight
By Agencies
Published:14:16, June 02, 2022 By Agencies

Aerial photo taken on July 23, 2020 shows a view of the new city of Cotai in Macao. (PHOTO / XINHUA)

HONG KONG - Plunging casino revenues in Macao, the world's largest gambling hub, are taking a heavy toll on the wider economy.

The special administrative region on Wednesday posted one of its worst monthly gambling revenues since September 2020, a week after Macao's government warned that rising job losses and financial strains could trigger social conflicts and destabilize the city's security.

Macao is heavily reliant on casino taxes, which account for more than 80 percent of government revenue.

More than 90% of visitors to Macao typically come from the Chinese mainland. May gambling revenues dropped 68% year-on-year to 3.3 billion patacas, and - while up 25% from April - it remains far off the 26 billion patacas hit in May 2019


"We are the most reliant city in the world on tourism. Of course, we didn't have any other industries to fall back on," said Professor Glenn McCartney, an associate professor at the University of Macau.

"Given that we didn't diversify for 20 years. It isn't going to happen tomorrow. There's no quick fix."

Macao's dependence on gambling has been laid bare since the start of the coronavirus pandemic, with visitation rates in the first quarter dropping more than 80 percent compared with the same period in 2019 due to COVID-19 travel restrictions.

READ MORE: Macao, Hong Kong must fundamentally rethink tourism trade

More than 90 percent of visitors to Macao typically come from the Chinese mainland. May gambling revenues dropped 68 percent year-on-year to 3.3 billion patacas, and - while up 25 percent from April - it remains far off the 26 billion patacas hit in May 2019.

Macao's six casino operators are facing daily revenue losses and accumulating debt as liquidity continues to dry up.

Cost-cutting is evident throughout the tiny territory, home to more than 600,000 people, extending to sectors including retail, industrial and commercial services.

The unemployment rate for local residents has risen to 4.5 percent, according to the latest government figures, up from 1.8 percent in 2019.

ALSO READ: Macao casinos face biggest threat to growth in five years

Citing a tough business environment and gloomy outlook for the high-end gaming segment, the Emperor Entertainment Hotel said in April it would close its casino from June 26.

At least seven other casinos are due to stop operations by mid-year, local media reported.

The Macau Economic Association said the local business climate index will remain "poor" for the coming three months.

Macao's government has urged casinos, which employ tens of thousands of local people, not to fire workers.

Instead, some operators have chosen not to renew contracts, or offered unpaid leave or share bonuses instead of giving full salaries.

Cloee Chan, a labor group activist in Macao, said the lack of gamblers, coupled with the closure of VIP parlors and some casinos, posed a major challenge to the local labor market.

"Many workers in the gaming industry are now either under-represented or fired," she said.


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