July 6, 2022 Macau
Warnings from economists and major financial organizations, including the World Bank, that a global recession is on its way pose little threat to Macau’s casino industry, with any recession impact to be mitigated by COVID recovery, according to brokerage Bernstein.
In a note assessing the impact of a recession on US and Macau operators, Bernstein analysts Vitaly Umansky, Louis Li and Shirley Yang estimate the nationwide impact on GGR in the United States would be in the range of 3% to 11% – the decline limited by a higher reliance on non-gaming and recent cost-restructuring that has them better placed than in previous recession times.
However, assuming an economic slowdown in mainland China, the impact would be even smaller in Macau – in part due to the fact that the SAR is already at rock-bottom given the current COVID situation and low investor sentiment.
“The Macau border policy with China under COVID restrictions has a much more severe impact than any economic downturn,” the analysts said.