Macau casino profits exceed expectations, gaming revenue rises to US$2.42 billion
Macau's Gaming Inspection and Coordination Bureau reported on Monday that the enclave's casinos won 19.5 billion patacas ($2.42 billion) from players in March.
March 2024 was a year-over-year increase of more than 53% and 5.5% higher than February, when the city received many Lunar New Year travelers. March's performance beat consensus forecasts from analysts in the region, the only region under Chinese control that allows slot machines and table games, who predicted growth would be 49% higher than a year earlier.
March was the second highest monthly profit for casinos in Macau since the city reopened in January 2023.
Over the three months of 2024, GGR in what was the world's richest gaming market before the COVID-19 pandemic (a title now reclaimed by Nevada) recovered 65.5% compared to the same period in 2023. The region's six casino licensees - Sands, Galaxy, MGM, Wynn, SJM and Melco - made $7.11 billion in the first quarter.
Market Unstable
In Macau, the working atmosphere of six casino concessionaires is completely different from before the epidemic. China is using the global health crisis to improve national security, one pillar of which is preventing large amounts of money from escaping Communist Party control.
Amid the health crisis, Beijing has ordered Macau to crack down on casino junket gangs that for years have brought the mainland's wealthiest VIP gamblers to the Special Administrative Region (SAR) to play magnifying glass in private high-roller casinos. Chinese President Xi Jinping has accused intermediaries of facilitating the transfer of large amounts of cash through tax havens. Chinese leaders say there are national security risks.
Macau, a tax haven operating under China's "one country, two systems" policy that gives the region a high degree of government autonomy, agreed to crack down on the VIP tourism industry to curb the flow of illegal funds from the mainland to Macau. The specific purpose of gambling. Therefore, junkets are basically non-existent in Macau.
That's forcing six casino companies, each with billions of dollars invested in resorts in the city, to shift their focus to general and high-end mass audiences.
Different perspectives
Some Macau analysts believe that casinos have successfully adapted to a common and desirable premium mass audience.
These market watchers are optimistic about 2024 and the years ahead. JPMorgan analysts said last week there were no signs the economy was about to slow down. Other brokerages don't think so.
March GGR was a significant improvement from March 2023, but $2.42 billion was equivalent to 75% of pre-pandemic sales in March 2019. As China and Macau move towards “zero COVID-19” at the end of 2022 and begin to reopen their borders to international traffic, the best month compared to 2019 is December 2023, when GGR returns to the levels reached before the COVID-19 pandemic. 81%.
“Macau’s path to post-pandemic recovery is slowing as China’s economic growth loses momentum,” Bloomberg economics reporters Shirley Zhao and Katya Dmitrieva said on Monday. "Despite the increase in tourist arrivals, growth has slowed, suggesting that per capita spending has fallen due to worsening consumer confidence."
Coupled with a likely reduction in public spending, casino costs continue to rise. In parallel with inflation, casinos continue to meet their non-gambling investment obligations as set out in the 2022 Relicensing Terms and Conditions.
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Source: www.casino.org
