Gaming Industry in Macau Hit Hard by the Covid-19 Pandemic
Macau is often called Monte Carlo of the East and is known as the gambling epicenter of the world. Macau’s biggest source of revenue is from gambling tourism, accounting for more than 50% of total receipts. Visitors are largely Chinese nationals from the mainland and Hong Kong, and the rush is not unexpected as Macau is the only location in China where gambling is legal. The casino business has grown at an amazing pace as online gambling in Macau is banned.
The first Covid-19 instance was confirmed in Macau on January 22, and the Chinese authorities clamped down hard. Visitors were prohibited, and this once bustling gambling city soon turned into a ghost town. Casinos were closed, and the workers were laid off.
This has hit the gaming industry in Macau, where it hurts the most – revenues generated from the business. When things gradually returned to a semblance of normalcy March-end, the devastation caused by closed casinos was seen. As per the Gaming Inspection and Coordination Bureau (DICJ) data, there were 41 casinos in Macau at the start of the year. Three have suspended their operations while the others are limping along.
In terms of revenue, there is a year-on-year fall of 77.4 percent to MOP 33.72 billion in the first half of the year. The full-time employees of the casinos have seen their average earnings (excluding bonuses) go into a free fall stopping at MOP 23,200 or $2,900 in June. According to the Statistics and Census Bureau (DSEC), this is a decrease of 5.5 percent over the same period last year. The dealers, too, have been similarly affected with their average earnings at MOP 19,270 in June, a drop of 7.6 percent.
It is not only falling earnings that has the gaming industry worried. Staffing patterns and fresh recruitment are at an all-time low and are seeing negative growth. As of Thursday, August 20, full-time employees in the industry numbered 57,459 at the end of the second quarter, which is a drop by 381 against June 2019. Vacancies were only 25 at the end of the second quarter a sharp fall from 879 last year when business was booming in Macau. Records from the DSEC show that the industry’s recruitment rate and the employee turnover rate have dropped by 3.2 and 1.7 percentage points, and fresh recruitment possibilities are near zero. The Bureau has also noted, “These indicators reflect a substantial decline in demand for manpower in the gaming sector.”