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Macau Casinos Suffering Massive Losses

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Macau Casinos Suffering Massive Losses
Macau casinos suffering huge coronavirus losses

The former Portuguese enclave, Macau boasts one of the most profitable casino gambling industries in the world with billions made yearly. However, due to the ongoing coronavirus pandemic, the Macau gambling industry has come across serious obstacles and challenges. As reported by several local news outlets, the negative impacts of the ongoing coronavirus pandemic will very soon prompt the six fully licensed and regulated casino operators to reveal their combined deficits in earnings for the second quarter.

According to the company’s officials, their combined deficits in earnings before amortization, depreciation, interest, and taxes went over $1 billion which is a massive loss. As revealed by Inside Asian Gaming, the forecast was made by the Morgan Stanley brokerage and investment company concerning the financial results from the major Macau casino operators. These include Melco Resorts and Entertainment Limited, SJM Holdings Limited, MGM China Holdings Limited, Sands China Limited, Galaxy Entertainment Group Limited, Wynn Resorts Limited, and Wynn Macau Limited.

Re-Opened Macau Casinos Struggling to Attract Customers

Back on the 4th of February, the government of Macau decided to shutter every one of those thirty-nine commercial casinos in Macau due to the rising numbers of coronavirus infections in the country. The Macau casinos just recently re-opened, but they have been struggling to attract customers mainly due to social distancing, travel restrictions, and other safety and protection measures that are still in place.

After over two months of being closed, the Macau casinos can only expect negative financial results for the previous period alongside other negative consequences of the ongoing coronavirus pandemic which will last for months to come.  The Morgan Stanley brokerage and investment company’s main analysts Praveen Choudhary and Gareth Leung recently revealed that those six major casino operators in Macau are expected to record combined second-quarter deficits in earnings before amortization, depreciation, taxes and interested of around $1.04 billion.

According to the same analysts, the casino operator with the biggest financial losses and deficits in earnings is the Sands China Limited company with a massive shortfall of $286 million. According to Praveen Choudhary and Gareth Leung from Morgan Stanley, another company with a similar deficit of around $205 is Melco Resorts and Entertainment. According to the pair, the Melco Resorts and Entertainment Limited is about to record the worst financial result for the three last three-month period when it comes to the local casino gambling industry.

Reducing Operational Expenses

Nonetheless, both Praveen Choudhary and Gareth Leung proclaimed that these rather devastating financial results from the six Macau casino operators could also provide an important glimpse into the operators’ current operational expenses alongside other important information such as which operators had managed to reduce some of their operational costs and which portions of the expected cut remains sustainable in the longer run.

The pair also clarified that the latest financial information on the aggregated deficits in earnings for the six Macau casino operators also revealed which casino operators had been able to better manage their rising operational expenses alongside the aggregated daily rate which as estimated recent dropped by around 21% on a yearly basis to hit only around $15 million. The pair’s official statement also reads that Macau casino gambling stocks increased by around 21% in the latest quarter so they believe that the worst is behind the Macau casino operators.

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