“Covid-19 disruptions will likely delay the recovery of Macau gaming this year and next,” said the institution in a Thursday report. “Shrinking disposable income and weakening consumer sentiment, which surfaced in late 2021, may also hinder the recovery.”

Macau had recorded a total of 1,303 Covid-19 infections in the current outbreak, as of midnight on Thursday, with 88 newly-confirmed cases. A number of large gaming-resort hotels in Macau are being made available for quarantine purposes.

Mainland China was the only place to have a largely-quarantine free travel arrangement with Macau. But restrictions have been imposed since mid-June because of the most serious Covid-19 outbreak in Macau to date.

The ratings agency said it now expects Macau GGR this year to be only 20 percent to 30 percent of 2019 levels, i.e., before the onset of the pandemic. Based on the institution’s estimates, casino GGR would reach at most MOP87.74 billion (US$1.08 billion), compared to MOP292.46 billion in 2019. Aggregate casino revenue last year stood at MOP86.86 billion.

The institution said additionally that in 2023, mass-market revenue could reach between 50 percent and 70 percent of 2019 levels, versus above 80 percent previously. VIP GGR is expected to “remain weak,” it added.

The Macau casino industry generated GGR of nearly MOP26.27 billion in the first half of 2022, the lowest amount since the MOP25.75 billion recorded for the first six months of 2006, according to official data.

“Our lower GGR forecast will result in credit measures being weaker in 2022 and 2023 than we previously expected and could cause leverage to remain above our downgrade threshold through 2023,” said S&P, referring to casino operators it covers with exposure to the Macau market.

As a result, S&P placed the ratings of respectively Wynn Resorts Ltd; Las Vegas Sands Corp and Sands China Ltd; and of units of Melco Resorts and Entertainment Ltd on credit watch, with negative implications.

“Liquidity profiles are solid. Issuers have 18 to 20 months of liquidity even under a zero-revenue scenario,” the institution nonetheless added.