Macau casino profits cool in November after post-pandemic peak in October
Casino revenue in Macau is down slightly compared to its post-pandemic peak in October.
As of November 2023, gross gaming revenue (GGR) from its casino operations, which the Macau government calls "Game of Fortune," totaled 16.04 billion patacas ($1.99 billion). Although compared to November 2022, the year-over-year increase was 435%. The monthly tally fell nearly 18% from October as six casino operators won $2.42 billion when China was still under President Xi Jinping’s “zero-COVID” deal.
October benefits from the eight-day Golden Week, the peak tourist season for China’s 1.4 billion people. Many workers enjoyed a week's paid leave during the October 1, 1949 holiday celebrating the founding of the People's Republic of China.
However, November remains the fourth-best gaming month of 2023 in Macau. This year marks the start of a recovery for the world's richest gambling market before the COVID-19 pandemic. Since then, Macau has lost its distinction from Nevada. But the gaming craze continues.
Quality Rebound
November's GGR number was no surprise, as analysts had forecast the month to be significantly lower than October. Analysts expect November casino profits to be 16 billion patacas, just in line with operating income.
The industry continued its upward trend in November. In November, it increased by 435% year-on-year and 138% compared with 2020 and 2021. However, November’s harvest was still 30% lower than in November 2019 before the epidemic, when total revenue was 22.87 billion yuan.
Market observers say that Macau’s mass market has fully recovered to its 2019 situation. The downside to GGR is that there are far fewer VIP players in town since China successfully prosecuted Zhou Zhuohua, a former spokesperson for the Macau junket industry, in January.
Zhou became a billionaire, founding and running Suncity Group. The company started out as a tour group offering first-class tours to Macau for mainland whales. Upon arrival, these guests receive gaming points similar to the cost of a luxury trip—usually in the six- to seven-figure dollar range. These players play in private high-roller rooms, and the casino pays Suncity a commission on the games.
Chinese prosecutors allege Zhou's outings also included hosting illegal amateur games in private rooms. It is said that through this action, the Macau government defrauded the Macau government of more than 1 billion US dollars in tax revenue. Zhou was arrested in late 2021 and convicted in January 2023 of fraud, illegal gambling and criminal organization.
Zhou's indictment and prison terms have shaken Macau's junket industry, with most operators closing shop and leaving the city for more popular markets such as the Philippines, Vietnam and Cambodia. It’s unclear how Macau’s gaming industry will return to 2019 gaming levels without junkets. The Macau government hopes to diversify the economy away from gambling with new business opportunities and more family-friendly attractions.
A glimmer of hope
Macau's gaming profits hit 164.5 billion patacas ($20.4 billion) in 11 months. Revenue returns in 2023 were 61%, compared with casino profits of 269.6 billion patacas ($33.5 billion) in the same period in 2019.
One bright spot for the six gaming concession holders is that they will not hit the Macau government's 180 billion patacas ($22.4 billion) gross gaming revenue cap, which requires companies to increase non-gaming revenue . Spend 20% less on games. . Macau granted the companies new 10-year licenses last year in return for committing to collectively invest $13.5 billion in its resorts through non-gaming projects over the life of the licenses.
Historically, December is a slow gaming month for Macau.
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Source: www.casino.org
