X

Macau Casino Revenue in January up 82.5%, Recovery on the Cards

Image Source: Shutterstock.com

Shares of Macau casino operators posted gains of between 3% and 5% after official data released by the Special Administrative Region (SAR) of China’s government revealed that gambling revenue in January nearly doubled.

Substantial Revenue Increase

Macau casinos generated MOP11.58 billion ($1.44 billion) in gross revenue in the first month of 2023 to post an increase of 82.5% from MOP6.34 billion ($786.16 million) in January 2022 and send a note of optimism among executives and analysts following the gambling industry in the SAR that it is the beginning of a solid recovery.

The result was influenced by the rise in visitations during the week-long Lunar New Year holiday as nearly half a million people arrived in the SAR, in contrast to the disappointment from the weak visitation numbers during the three-day New Year’s holiday last month when international arrivals plunged between 33% and 42% when compared to their respective days in the year before.

Despite registering the largest crowds in more than three years, the SAR’s gambling revenue was still behind pre-pandemic levels, posting less than a half compared to the Lunar New Year’s holiday in 2019 but investors reacted positively to the news with the expectation that this is the beginning of a solid rebound.

Another factor that contributed to the January numbers was the removal of testing requirements for inbound travelers from mainland China, Hong Kong and Taiwan on January 8 which led to a resurgence of tourists from the mainland.

The casino industry in the SAR was severely impacted by the zero-COVID policy implemented by the Chinese authorities in 2019, and the attack on junket operators following the arrest of Suncity CEO Alvin Chau which continues to weigh on the impetus for junket operations, leading to their numbers continuing to decline. Recently, a court in Macau sentenced Chau to 18 years in prison.

Commencing New Concession Deals

January was the first month for the new contracts for Macau’s concessionaires – Sands China, Wynn Macau, MGM China, Galaxy Entertainment, Melco Resorts, and SJM Holdings – following the signing of the new 10-year contracts in mid-December which authorized the casino operators to legally offer games of fortune until the end of 2033.

As part of the new concession deals, casino operators agreed to pay new fee to the government based on the size of their casino floors, despite the plunge in their revenues in 2022 when Macau registered 50% less year-over-year, one of its worst revenue performances on record.

Casinos also committed to investing a total of $15 billion, 90% of which should be invested in non-gaming facilities such as water parks, health and wellness centers, art exhibitions, garden attractions, and others.

Categories: Casino
Julie Moraine: With 4 years experience as an analyst, Julie—or ‘Jewels’, as we aptly refer to her in the office—is nothing short of a marvel-worthy in her attention to the forex and cryptocurrency space as she quickly became the first pick to co-pilot education to the masses with Mike.
X

We use cookies to optimize your experience. If you continue to browse this site, you agree to this use.

We use cookies to optimize your experience. If you continue to browse this site, you agree to this use.

Privacy Settings