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No Stimulus for Gambling Operators in Macau
- May 7, 2020 By Riley Wilson -
At one point, it looked like Macau would become a sustainable gambling jurisdiction, after it somehow managed to survive a period of crackdowns.
However, the global outbreak of coronavirus has had a dire effect on the future of gambling in this special administrative region, with many local operators and their stakeholders have felt the consequences of the recent drop in revenue.
Chinese Government Made a Controversial Decision
A total of 39 gambling operators are currently doing business in Macau, but how many of them will survive the disastrous times that surely lie ahead, remains to be seen.
According to the latest data, Macau saw an almost unbelievable drop in gross gaming revenue in March – 80% down when compared to the same month of 2019.
Available information suggests that all of the operators are going to be excluded from the Chinese economic stimulus program, worth $1.7 billion! The Chinese authorities announced that the country’s gambling sector, at this moment limited to the region.
The stimulus could have been a very beneficial one for Macau, as it offered subsidies worth $1.2 billion for small to medium businesses, as well as over $450 million in vouchers awarded to the local population.
The Sector Will Have to Rely on Its Profits
According to the government, although the gambling sector didn’t lay off its employees during the outbreak, the previously accumulated profits should prove enough to allow the companies to continue their operations and keep the majority of their employees in the coming period.
In practice, this means that gambling operators in Macau will not be getting any sort of help from the Chinese authorities, and will have to rely solely on their previous profits to continue with their operations.
Commenting on the Chinese government’s decision to exclude the gambling sector from any stimulus, Lei Wai Nong, Macanese Finance and Economy Secretary pointed out they hoped operators could understand the situation. He also said he was convinced that operators would overcome the current problems.
We certainly hope that operators share the Secretary’s optimism. They would need the money in the coming months, as experts predict a further downfall in gaming revenues.