Macao is not recovering nearly as fast as analysts had been expecting as December's monthly gross gaming revenue (GGR) fell 65.8% to 7.82 billion patacas, the local currency, or about $978 million.

That was worse than the 60% or so decline forecast and it caps the second straight year that gaming revenue has declined in Macao, the only location in China where it's legal to gamble.

Image source: Getty Images.

Sinking lower

Data from Macao's Gaming Inspection and Coordination Bureau shows December was the 15th consecutive month of falling GGR. It was also the 17th out of the last 18 months that GGR was lower than the year-ago period.

Total GGR for 2020 was 60.4 billion patacas, a 79% drop from the prior year, which itself was down from 2018, though only by 3.4%.

Analysts were looking for the region's casinos to begin gaining ground again after China reinstated travel visas from the mainland at the end of September and the national Golden Week holiday kicked off October.

Even though Macao has reportedly not had a single new case of COVID-19 in over six months, casinos such as Las Vegas Sands (NYSE: LVS), MGM Resorts (NYSE: MGM), and Wynn Resorts (NASDAQ: WYNN) have failed to appreciably see more traffic.

Shares of three U.S.-based global casino operators are down around 5% on average so far in 2021.

Data source: Macao Gaming Inspection & Coordination Bureau. Chart by author.

Even though visitations by tourists to the peninsula did pick up around Christmas, analysts at J.P. Morgan said investors shouldn't read anything into it as Macao's substantial weakness hasn't worked itself out yet.

Bernstein analyst Vitaly Umansky said December GGR was "as expected," but he said the month's results were still disappointing, and he's forecasting January GGR will be down in the low to mid-60% range.

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