Posted on: August 1, 2023, 07:50h.
Last updated on: August 1, 2023, 11:11h.
Macau casino revenue eclipsed the $2 billion mark in a single month for the first time since the onset of the COVID-19 pandemic in January 2020.
Gross gaming revenue (GGR) in the Chinese Special Administrative Region totaled MOP22.126 billion (US$2.06 billion) in July 2023. The six commercial casino operators, — Sands, Galaxy, Wynn, Melco, MGM, and SJM — continued their post-pandemic rally, as June represented a nearly 10% improvement on June.
July topped the enclave’s previous best monthly GGR performance in the pandemic aftermath, which was $1.93 billion, set in May 2023. The $2.06 billion haul exceeded the median expectation among analysts issuing guidance on Macau.
July was a more than 4,000% year-over-year improvement, as Macau was essentially closed a year ago last month while China President Xi Jinping maintained his controversial “zero-COVID” policy. The draconian pandemic recourse strategy resulted in severe lockdowns and travel bans upon the detection of even a handful of new coronavirus cases.
Xi ended “zero-COVID” after nearly three years in November 2022. The policy had paralyzed the Chinese economy and wreaked havoc on Macau’s tourism and gaming industries, which generated more than 80 cents of every tax dollar the local government received before the pandemic.
Rebound Rolls On
Macau’s casinos continue to see their gaming rebound, though the local industry is considerably different than it was before COVID-19.
Amid the pandemic, local officials in Macau were tasked with reissuing fresh gaming licenses to the six firms. But upon pressure from Beijing to better scrutinize VIP play and the junket groups that had brought such mainland high rollers to the casino tax haven for more than a decade, Macau greatly overhauled its regulatory environment.
VIP junket groups are largely no more, as trip organizers folded up shop in favor of more welcoming markets in Asia. That’s after China arrested, charged, and sentenced Alvin Chau, the face of Macau’s junket industry who ran the Suncity junket. He received 18 years in prison on gambling-related crimes.
In seeking to diversify its regional economy through its most critical industry, the Macau government in November issued new 10-year gaming licenses to the six concessionaires, but with considerable nongaming requirements.
The six casino giants must collectively invest $13.5 billion in projects unrelated to their casino operations over the life of their licenses. The VIP pushout has also forced the casinos to place more emphasis on the mass market and so-called premium mass market, the latter referring to general public gamblers who might not be regulars, but who gamble more when they visit than the standard guest.
Gaming Remains Below 2019
Though 2023 has seen a meaningful recovery for Macau casino revenue, the market still has a way to go to return to pre-pandemic levels.
Through July 2023, Macau GGR totaled a little more than $12 billion. In 2019 January through July, casino revenue totaled more than $21.6 billion, meaning despite the 2023 rebound, gaming through seven months of the year remains 44% below 2019.