Jason Ader: Online gaming should be legalised in Macau to offset revenue drop
The Chinese Government should legalise online gaming in Macau to offset the continued revenue decrease down to the coronavirus outbreak, an industry analyst tells Gambling Insider.
March gross gaming revenue (GGR) for Macau’s casinos was down 80% year-on-year to MOP5.26bn ($660m), with accumulated GGR decreasing 60% from last year, to MOP30.49 for Q1 2020.
While that total is a 69% improvement on February’s figures, the coronavirus outbreak has had a detrimental impact on the region, which has suffered 41 reported cases of the virus.
According to Jason Ader, CEO of independent sponsor and buyout firm SpringOwl Asset Management, given the overall rise of online gaming, this should be legalised in Macau to offset such huge revenue hits.
He said: “I really think this is the moment, if you have a license in Macau, to legalise online gaming. The Chinese government has been against online gaming and you do have a black market there for people who are playing online, but there really shouldn’t be.
“Why not allow your licensees in Macau to connect with those customers in mainland China. The Government would obviously watch it and monitor, regulate and control it but at least you then have the potential to tax and regulate online.
“Allow the mass market and the premium mass market in Macau to play online in the current environment and that loss of tax revenue would be mitigated; I think that’s the key. Gaming exists because it’s an economic driver and source of revenue, so that is something I think the Chinese government should really consider.”
Ader doesn’t believe March’s revenue figures should come as a surprise, considering strict travel measures are in place. This includes a 14-day quarantine for anyone arriving in Macau who has travelled outside Hong Kong, Taiwan and mainland China, within the past two weeks, with its borders closed for anyone coming in from outside those regions.
He said: “There wasn’t any surprise with the 80% drop; there was a moment in the period where it was down 100%. Nothing is normal right now with borders being reclosed and the distance between the tables in casinos, with dealers all wearing masks. It’s not even close to being back.
“I know the Macau Chief Executive’s goal was to have things back to normal by May but I don’t think there’s any real chance of that given the more recent flare up with respect to new outbreaks.
“I think the quarantine measures are probably going to be in place for at least a whole month. We have another tough month ahead for gaming Macau.”
The full interview with Ader will be available in the May/June edition of Gambling Insider magazine.
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