For many operators, 2020 will be remembered as one of the most horrible years in history. The disastrous and lethal virus of chinese origin completely upset the global economy and we could say that it even passed some political bills such as the United States.
But in Asia and, specifically, in Macau, covid-19 has been one of the worst things that has happened to this special region of China. The economic and financial blow has been very hard, as evidenced by the results of the last nine months. During this period, Macau only received 25% of the tax revenue it earned in 2019.
With barely two months to go to the end of the year, nothing suggests that the situation will be different, even if there were an unexpected rebound. According to statistics from the Macau Office of Financial Services, since the beginning of the year the city only received $ 3 billion in gambling taxes. This is 74% less than what was obtained during the first ten months of last year.
Previous forecasts calculated about $ 6.255 billion. However, gross revenue from casino gambling was actually $ 5.73 billion during the period, representing an 81.4% year-on-year decrease.
Typically, the Macau casino industry greatly supported the economy and local government by creating jobs and paying taxes. But the city’s tax collection for the period was just $ 4.51 billion, that is, 66.5% less than in 2019.
Adding in capital revenues, the city raised $ 10.1 billion, which is still 27% below what it collected last year. It also doesn’t compare to the $ 13.71 billion the city projected to receive in the first ten months of the year.
October brought good news
In the midst of the pandemic, however, some good news has emerged as well, as the bleak outlook began to change in Macau in october. Last week the gaming regulator reported that casino gaming revenue for the month reached $ 914 million.
Although these figures represent a year-on-year drop of 72.5%, it has been much better than all the other months of the year. Macau could be heading in the right direction and for some analysts the region’s economy could recover earlier than expected.
This does not mean that the difficulties have ceased, because there are losses that will cost work to recover. Macau’s economy has suffered and it will be some time before the situation reaches pre-pandemic levels when the economy was already showing signs of fatigue.
The disastrous impact of the pandemic is trying to be offset by Macau lawmakers, who seek to approve an extra $ 2.5 billion of the city’s reserve funds that would be intended to balance the 2021 budget.
If approved, this would be the third year in which Macao has resorted to its reserves to cover the damage and fiscal gaps left by the pandemic. Likewise, an additional $ 3.3 billion could also be withdrawn from the reserve fund after the approval of the Macao 2021 budget.