The Chinese territory of Macau is struggling with rising unemployment and plunging business sentiment amid wilting casino revenues.
The special administrative region of 600,000 people on Wednesday posted one of its worst monthly gambling revenues since September 2020, a week after Macau’s government warned that rising job losses and financial strains could trigger social conflict.
Macau, the world’s largest gambling hub, has been hit hard since the start of the coronavirus pandemic, with visitation rates in the first quarter dropping more than 80% compared with the same period in 2019 due to Covid-19 travel restrictions.
More than 90% of visitors to Macau casinos typically come from mainland China, which continues to pursue a “zero-Covid” policy.
May gambling revenues dropped 68% year-on-year to 3.3 billion patacas ($400 million), and – while up 25% from April – it remains far off the 26 billion patacas hit in May 2019.
The six Macau casino operators are facing daily revenue losses and accumulating debt as liquidity continues to dry up.
China’s moves to stem capital outflows and crack down on the opaque junket industry that is tasked with bringing in high-rollers from the mainland have also hampered gambling revenue.
The unemployment rate for local residents has risen to 4.5%, according to the latest government figures, up from 1.8% in 2019.
- Reuters, with additional editing by George Russell