Casinos in Macau Surpass Analyst Predictions, City Records February Winnings of over $1.3 Billion
Casinos in Macau surpassed expectations in February, with gross gaming revenue (GGR) skyrocketing above analyst predictions.
February's GGR amounted to MOP10.32 billion (US$1.28 billion), marking a 33% increase compared to the previous year. This figure surpassed the anticipated February GGR forecast of $1.17 billion by analysts.
Despite a 11% decrease compared to January, which netted a collective $1.43 billion for the six casino operators, it's worth noting that January had three more days, and the Chinese New Year celebration fell in January 2023. The public holiday is significant in China, as many mainlanders choose to travel during this time.
The GGR report for February from the Gaming Inspection and Coordination Bureau of Macau underscores the ongoing recovery of the casino hub, the sole place in the People's Republic of China where commercial gambling is allowed. The casino industry has eagerly awaited its own recovery, hoping it will mirror the swift rebound seen in Las Vegas following improvements in pandemic conditions in the US.
For the first two months of 2023, Macau's GGR stood at approximately $2.71 billion, recording a 55% increase compared to the same period in 2022. However, the cumulative GGR for January and February 2023 still fell short of the $6.23 billion won during the same period in 2019.
Recovery Persists
February presented challenging comparatives, as February 2022 included the Chinese New Year. However, February 2023 benefited from Chinese President Xi Jinping lifting most COVID-19-related travel restrictions, effectively ending the "zero-COVID" policy.
In Macau, the Special Administrative Region (SAR) eased most COVID-19 border restrictions on January 8. Now, travelers from mainland China, Hong Kong, and Taiwan can move freely throughout the SAR without testing or quarantine requirements.
Moreover, Macau is now open to foreigners. Visitors can enter Macau by presenting a negative COVID-19 test taken within 48 hours of departure. International travelers arriving in Macau via the mainland, Hong Kong, or Taiwan must submit a negative test taken within 48 hours of arriving in the enclave.
The relaxation of entry rules has boosted demand, leading to the resumption of ferry and bus services between Macau and Hong Kong.
2023 Forecast
Analysts are revising their full-year revenue projections for Macau based on the stronger-than-expected results. Morgan Stanley recently raised its 2023 GGR estimates by 42%, with the investment firm now anticipating casino revenue to total around $22 billion.
If this figure is achieved, the casinos would earn approximately 60% of their 2019 GGR of $36.5 billion.
Analysts acknowledge that predicting the Macau casino sector is more complex than it was in previous years, given the largely forced exit of VIP junket groups from the industry. As a result, the casinos are focusing on the mass-market gambler, with Sands and Galaxy Entertainment reportedly leading the charge. Yet, all six gaming conglomerates are actively pursuing the general public as never before.
The casinos have agreed to invest heavily in non-gaming facilities as part of their new 10-year concessions, which run until 2033. The aim is for Macau to emulate Las Vegas' economy diversification away from gambling and emerge as a global destination for leisure travel, business meet-ups, and events.
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