Macau has halved its forecast for 2020 gross gambling revenue due to the impact of the Covid-19 pandemic and announced new measures to help local business.
The government now expects the casinos to generate about MOP130 billion (US$16.3 billion), down from its November forecast of MOP260 billion.
Last year, GGR in Macau fell 3.4 percent to MOP292.4 billion and had been forecast to gain this year prior to the outbreak, which has crippled travel and forced the closure of casinos for 15 days in February. Gaming is the main source of revenue for the Macau economy.
Authorities also now estimate that 2020 will see a deficit of some MOP38.9 billion due to the decrease in gaming revenues coupled expenses related to boost the local economy.
The Executive Council has adjusted predictions for 2020 budget revenue to MOP111.8 billion, from its prior estimate of MOP122.6 billion, with expenses to rise to MOP110.9 billion from MOP100.6 billion as the government undertakes extraordinary measures to boost the economy.
Among the new steps it is taking, include a six-month exemption from tourism tax for hotels and other establishments linked to the tourism services sector. It also announced an up to MOP300,000 deduction in complementary income tax due in 2019 and other tax adjustments.
The government forecasts are more pessimistic than those so far published by analysts following the gaming sector in Macau, with Bernstein Research for example, predicting a downturn of as much as 40 percent should the situation not improve until late into the second half of the year.
The key for Macau will be when China lifts its restrictions on movement, in particular a ban on tour groups and the individual visit scheme. There is some optimism these may be lifted, at least in part, by early May.
At the onset of the crisis, analysts had forecast a swift snap back for Macau due to underlying pent up demand. However, it is still far from clear as to the impact of the crisis on China’s economy, which recorded its sharpest contraction in industrial production on record in its latest reported figures.