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Macao’s October slump blamed on COVID restrictions

October brought Macao’s lowest one-month gross gaming revenue total of the year, the region’s Gaming Inspection and Coordination Bureau said Monday.

Analysts believe the government’s decision to reapply COVID-19 restrictions in late September were behind the 40 percent decline in revenue from October 2020 and the 25.7 percent decline from September to October.

The bureau reported gross gaming revenue of $544.7 million (U.S.) for the month. It was the first year-over-year decline in revenue since January in what has been a rocky year for the 41 casinos in the special administrative region near Hong Kong.

A COVID outbreak in Macao compelled neighboring Zhuhai province, a prime source of tourists, to impose a 14-day quarantine for all arrivals from Macao.

Macao revenue is important to the Las Vegas market because three Las Vegas-based companies — Las Vegas Sands Corp., Wynn Resorts Ltd. and MGM Resorts International — have Macao properties that historically have generated high levels of earnings. Sands is the market leader with six properties.

Sands is counting on Macao to drive the company’s future as it exits the Las Vegas market in early 2022, as part of a $6.4 billion deal with Apollo Global Management Inc. and Vici Properties Inc. to acquire the real estate and cash flow of The Venetian, Palazzo and the Venetian Expo Center.

For the first 10 months of 2021, casinos have collected $9 billion (U.S.) in gross gaming revenue, a 57.3 percent improvement over the first 10 months of 2020.

But the region has been on a roller coaster through 2021. The latest decision to reimpose COVID sanctions came a week before Golden Week, a traditional holiday period in China. With restrictions now lifted, analysts expect the region to rebound in November. Representatives of MGM and Wynn are expected to discuss the outlook in their upcoming third-quarter earnings calls.

The Review-Journal is owned by the family of Dr. Miriam Adelson, the majority shareholder of Las Vegas Sands Corp.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

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