Macau Casinos See Record-Breaking $2B Revenue in July, Highest Gain Since Start of COVID-19 Crisis
For the first time since the start of the COVID-19 pandemic in 2020, Macau's casino revenue reached over $2 billion in a single month. In July 2023, the total Gross Gaming Revenue (GGR) in the Chinese Special Administrative Region amounted to MOP22.126 billion, or roughly US$2.06 billion. This marks a significant increase compared to June, where revenue showed a nearly 10% improvement.
July's GGR surpassed the previous best monthly performance in the pandemic aftermath, which was $1.93 billion set in May 2023. This figure exceeded analysts' expectations. Revenue surged more than 4,000% year-over-year, as Macau had almost halted operations a year ago due to China President Xi Jinping's "zero-COVID" policy. The strict pandemic measures led to severe lockdowns and travel bans when new cases of coronavirus were detected. The policy had a detrimental effect on Macau's economy, causing immense damage to its tourism and gaming industries, which contributed around 80% of the local government's tax revenue prior to the pandemic.
As of November 2022, Xi ended the "zero-COVID" policy, shifting into a more relaxed strategy. The policy had disrupted the Chinese economy and caused significant harm to Macau's tourism and gaming sectors.
The Recovery Continues
Macau's casinos have been experiencing an uptick in their gaming industry since the pandemic. However, the local industry is vastly different than before COVID-19.
As a result of the pandemic, Macau's officials were asked to reissue new gaming licenses to the six operators, but faced pressure from Beijing to closely monitor VIP playing and junket groups that had been attracting mainland high rollers to Macau for more than a decade. This led to significant changes in Macau's regulatory environment.
Junket groups now almost no longer exist, as operators closed shop in favor of more accommodating markets in Asia. This came after China swooped in and arrested, charged, and sentenced Alvin Chau, the face of Macau's junket industry. He received an 18-year prison sentence on gambling-related charges.
In an attempt to diversify its regional economy through its primary industry, the Macau government issued new 10-year gaming licenses to the six concessionaires in November. However, these licenses came with strict non-gaming requirements. The casinos will need to collectively invest $13.5 billion into non-casino-related projects throughout the length of their licenses.
The ban on VIP players has prompted casinos to focus more on the mass market and "premium mass market." The latter refers to the general public who tend to gamble more when they visit the casinos, even if they are not regulars.
There's Still Work to Be Done
Despite the recovery of Macau casino revenue in 2023, the market remains a long way from returning to pre-pandemic levels.
So far in 2023, Macau's GGR has totaled just over $12 billion. Over the same period in 2019, the casino revenue was $21.6 billion. This shows that, while there has been a meaningful recovery in 2023, gaming revenue through seven months is still 44% below the levels seen in 2019.
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Source: www.casino.org
