The complete closure of Macau’s borders to the mainland on several occasions during the pandemic has been an unmitigated disaster for the Macau economy and the well-being of the people of Macau.
But every cloud has a silver lining, no matter how faint. One thing the closures have been able to do is allow us to answer a question which has always been a conundrum – how much Macau GGR is generated by the people of Macau themselves?
It’s always been assumed that essentially all the SAR’s gaming revenue comes from visitors, with the people of Macau themselves making a negligible contribution. But is that true?
While the borders were effectively closed from April to July 2020, there were some VIPs essentially trapped in Macau during that time, with monthly GGR ranging from as low as MOP$716 million (US$89 million) to as high as MOP$1.8 billion (US$225 million) during those four months. The wide range presumably reflects when the effectively incarcerated VIPs were able to make their escape.
However, the month of July 2022 offers us a unique glimpse into “locals only” play. This was during the so-called “618 outbreak” when Macau was shut off from the outside world, including the mainland. It was also after the December 2021 collapse of VIP play in Macau. The casinos were closed for 12 days during that month, but during the other 19 days generated MOP$398 million (US$50 million) in gaming revenue, implying a “locals only” revenue of MOP$20.9 million (US$2.6 million) per day, or if you prefer MOP$7.6 billion (US$950 million) per year.
You could argue turnover would be down during this period due to people staying home during the outbreak and the additional requirements for casino entry, but you could just as easily argue turnover would be up as there was pretty much nothing else to do in the SAR during this time. So, let’s cancel those factors out.
It would be fair to assume that MOP$7.6 billion per year is a reasonably stable number. Comparing to the 2019 GGR of MOP$292 billion (US$36.5 billion), we can conclude Macau locals comprised 2.6% of Macau’s pre-pandemic GGR.
If, like me, you think Macau’s medium term post-covid zero GGR will stabilize around one-third of the pre-pandemic GGR, then Macau locals could make up nearly 8% of GGR once that stabilization occurs. Not an enormous proportion, but also not one that should be ignored.
