Macau has always been the epicenter of the gambling activity in the whole world. It has surpassed the long-time gambling haven Las Vegas with a total revenue of $36.7 billion as of 2019.
The success of Macau as the gambling capital of the world can be attributed to the thousands of job opportunities that the city has been offering to their citizens. Also, foreign investments into the casinos are also flowing due to the lucrative opportunities that the city can offer to its investors.
However, due to the recent impact of the global coronavirus pandemic that forced many businesses to close and economies to crash, Macau may find the new year of 2022 difficult.
Initial impact of the pandemic
The special administrative region of Macau has purportedly recorded 63 cases since the early waves of the coronavirus outbreak. The pandemic has caused the authorities to close the borders to curb any new outbreaks from happening. Macau has one of the strictest border closure measures in Asia and it is evident in the number of cases recorded in the city.
Only the travelers from mainland China, Hong kong and Chinese Taipei are permitted to access the gambling enclave on China’s southern seaboard, and also if they can present a negative coronavirus test.
Despite all of that, travelers from Hong Kong, Taiwan and other parts of the mainland who are currently having Delta outbreaks must undergo a two-week quarantine when they arrive in Macau.
Effect on the economy
Even though the strict lockdown measure has saved Macau from the severe outbreaks of Covid-19 in other parts of Asia, the effects of the decreased tourism has caused the revenues of the gaming-centered economy of Macau to decline.
Despite the lockdown constraints that caused the closure of casinos for two weeks, the revenues from the 41 gambling locations have plummeted from 79% to $7.57 billion in 2020. Also the GDP of Macau which predominantly comes from the casino gaming, sports betting and tourism revenues, dropped 56% to $24 billion in 2020.
After an incident on August 3 where a four-member family arrived from the mainland has tested positive for the deadly Delta variant. The officials feared that the virus would spread in the compressed metropolis, where only 43% of the population received a full regimen of the coronavirus vaccine, forcing the entertainment sites to be closed.
The two-week closure has cost Macau an approximate amount of $937 million of gambling revenue. Many people have feared that the continuous discovery of coronavirus cases will cause the total closure of the city’s casino halls which are the essence of the city’s economy and culture.
A glimmer of hope has been found in Macau, in the form of smart business strategy. Knowing that they have no places to go and have no other options, visitors from other parts of China are taking advantage of the lowest rates of hotel rooms in Macau.
From the beginning of December 2020, officials in Macau have spent $36 million vouchers for Chinese visitors in an attempt to attract more tourists who are seeking low-priced luxury hotel accommodation into the city.
Prior to the global coronavirus pandemic, Macau was earning billions a year ever since it surpassed Las Vegas as the world’s new gambling center in 2006. The high-stakes table earnings in the city have tripled the revenues of the Las Vegas casinos combined.
The economy of Macau, which is predominantly dependent on land-based gambling and entertainment, might slowly decline for the next few years. This might force Macau to embrace a new source of revenue, something that can adapt to the ongoing circumstances that we all face right now.