Faster Gaming Recoveries For Places “Living With Covid”-Fitch Report
A Fitch Ratings Inc. report said that “states with ‘living with coronavirus’ mentality and promoting vaccination have witnessed improving gaming revenue.” They added that casino authorities relying on inbound visitors from China were finding it difficult to improve their gaming revenue.“
Authorities in mainland China and in Macau have adopted strict measures against COVID-19. Macau, in particular, has carried out three rounds of mass testing after the detection of COVID-19 cases within its population.
The COVID cases also resulted in the tightening of travel restrictions to Macau. According to an analyst, these restrictions have greatly affected the city's casino gross gaming revenue recovery.
Apparently, countries like the US that have adopted living with the coronavirus and promoted full vaccinations for its population have seen full recoveries in the second half of 2021.
Due to the high vaccination percentages among their population, Singapore and Malaysia are introducing policies to open their borders for international travel. Fitch highlighted the challenges for Asia-Pacific countries, especially those who rely on inbound Chinese Visitation.”
The institution further added that “it expects a large recovery in international travel and gaming revenues in 2023-2024”. Fitch's expectation was made with reservations due to the changing strict health codes imposed by the various country authorities.
For example, regulatory uncertainty, with Macau's concessions expiring in June and the lack of clarity on the rebidding process, regulatory, and operation structure, would be an issue in 2022.
Fitch’s “2022 Outlook: Global Gaming” report notes that most gaming entities issuing debt had been taken off its negative outlook list due to its strong domestic recoveries. It also notes Asia Pacific Countries whose borders remain closed to international travellers still stay on the list.
Some gaming equipment and content suppliers have also focused on divesting specific assets to reduce their leverage. This would result in future positive credit profile momentum.
