Mass market gamers won’t like Macau’s post-COVID19 changes: Morgan Stanley

Mass market gamers won’t like Macau’s post-COVID19 changes: Morgan Stanley

When Macau’s casinos will eventually get back to normal following COVID19-induced strict health protocols and travel bans, mass market gamers will probably not like the potential changes, Morgan Stanley market analysts underlined in their latest report.

The US-headquartered multinational investment bank and financial services provider cautioned that when the strict travel bans would finally be lifted and more gaming enthusiasts would return to Macau, mass market turnover would be most vulnerable to negative impacts of social distancing protocols. The company also warned that revenue from grind players could get weaker.

Casinos in the world’s leading gaming center have been reopened to the pubic but they are still suffering from the negative effects of COVID-19 pandemic, as visits from the mainland China, Hong Kong and other territories to the Special Administrative Region remain scant due to travel bans and gross gaming revenue is on the decline.

Macau casinos remained closed from mid February till late last month due to the deadly corona virus pandemic, which has claimed lives around the globe. Those entertainment properties that reopened their doors to the public have implemented strict safeguards and precautionary measures to help prevent further transmissions of the deadly virus. The array of new procedures aimed at preventing corona virus transmissions includes operating slot areas at 50 per cent capacity, restricting table games to three players, and forcing dealers to stand at least 6 feet behind the table.

Sands China, the Macau division of Las Vegas Sands, is the leading operator in the Special Administrative Region, controlling the largest share of the mass segments. Thus, it will likely be the most vulnerable to retrenchment.

In its newly published report, Morgan Stanley says, “The new normal, driven by social distancing, is particularly negative for grind-mass business due to restriction of three gamblers per table. Our analysis suggests more downside for Sands China (with highest exposure to grind mass) when business returns in greater volume.”

The report also states that Wynn Macau Ltd and Sands China have the highest and the lowest percentage of premium mass revenue respectively. Thus, Wynn Macau will likely suffer due to its high vulnerability to premium mass market, while Sands China will suffer due to its high vulnerability to grind-mass market. While the industry is expected to suffer a decline of 19 percent in mass market revenue in 2021, Sands China will suffer an estimated decline of 24 percent due to its highest exposure to grind mass.