Despite recent transport disruptions and the promise of more uprising to come, it seems the Hong Kong protests have so far had minimal impact on Macau’s casino revenues.

It is now five months since the first signs of a protest uprising emerged in Hong Kong and almost three months since they escalated significantly on 9 June 2019.

The protests were initially aimed at an extradition bill proposed by the Hong Kong government in February that would allow the detention and extradition by local authorities of people wanted in territories with which Hong Kong currently has no specific extradition agreement – most notably China. There is a fear among some Hongkongers that the bill represents a significant move by China to exert greater control over the SAR.

However, as the protests have continued, they have also broadened their reach to encapsulate a much broader anti-government rhetoric as well as an expanded list of demands that include not only a complete withdrawal of the extradition bill but also “universal suffrage for the Chief Executive and Legislative Council elections” and various protections for protestors.

A sit-in at Hong Kong International Airport for three days in August saw hundreds of flights cancelled.

The protests have also grown in scale, reaching a tipping point on 12 August at Hong Kong International Airport where protesters staged a blockade that forced hundreds of flights in and out of the airport to be cancelled over the course of three days.

Not surprisingly, the escalation of the Hong Kong protests and their interference with major transport routes quickly impacted investor sentiment in Macau, prompting Wynn Resorts CEO Matt Maddox to comment, “When you have hundreds of flights canceled out of Hong Kong and some reluctance to travel, I do think that’s impacting the premium end of the business.”

Wynn Macau President Ian Coughlan added, to Macau takes ~60 minutes) or Zhuhai airport (50 minute bus ride to Macau); and (2) Chinese visitors via Hong Kong ferry are typically package tourists or (very) low-end players anyway.”

Notably, during the week of the Hong Kong International Airport “sit-in”, both JP Morgan and Sanford C Bernstein estimated the average daily revenue of Macau’s casinos at around MOP$870 million – considerably higher than the average of MOP$790 million during the first two weeks of the month.

Only 8% of visitors to Macau arrive via the Hong Kong-Zhuhai-Macau Bridge.

The flipside is that a 3.5% decline in Macau’s GGR in July was considerably below expectations, although there were a range of factors at play including the ongoing US-China trade war and heightened scrutiny on junkets following reports from Chinese media that online gaming and proxy betting was being offered to Chinese customers.

For now at least, it appears the impact of the Hong Kong protests on Macau has been largely contained – but based on recent events it also appears there will be no end to the drama any time soon.

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