Last updated: April 02, 2024
Macau’s March 2024 gaming revenue witnessed a remarkable 53% year-over-year increase, surpassing forecasts amid post-pandemic recovery efforts. Despite regulatory changes targeting VIP junkets, casino operators have pivoted toward mass-market demographics. However, concerns arise with China’s economic slowdown, impacting consumer sentiment and escalating casino costs, posing challenges to sustained growth.
The Macau Gaming Inspection and Coordination Bureau, comprised of government bodies responsible for regulating the casino industry, recently disclosed that the city’s casinos booked net revenue of MOP19.5 billion (US$2.42 billion) last month, equating to 10.5.
This shows a very significant increase of more than 53% compared to the whole of last year and a 0.55% growth from February, the month with the highest number of inbound visitors due to the Chinese New Year period.
Doing better than the analysts’ average expectation is the fact that revenue rose by 56% in the March quarter, compared to the analysts’ average expectation, which had 49% year-on-year growth.
This March win is the second-best observable revenue reported for the casino industry in the last two months since Macau started randomly opening its borders to the outside world at the start of this year.
At the start of 2024, Gross Gaming revenue in Macau went up by 65.5% compared to the same quarter last year. This is a meaningful recovery for the region that was once the most valuable gaming market worldwide before the COVID-19 pandemic.
Now, Nevada has been crowned with that title instead. The six operators in Macau with vanishing licenses – Sands, Galaxy, MGM, Wynn, SJM, and Melco – jointly earned $7.11 billion in the first three months of this year.
When we talk about the casino industry in Macau, we can see that after the pandemic, the LSR will look very different because China now cares more about national security. Using this crisis of global health, China made more efforts to prevent a significant amount of money and spirits from leaving the country through casino junket groups.
Under President Xi Jinping’s authority, the investigating team conveyed that the orchestras above/groups also served as conduits for money laundering through Macau, thereby creating a risk to the nation’s security.
To meet Beijing’s directives, the Macau administration imposed much higher levels of supervision on VIP junkets, leading to an overall lessening of their concentration in the region. The consequence of the aforementioned shift caused the biggest casino operators to move away from the VIP market segment to the lower—and higher-tier mass segments where most of their previous investments have been concentrated.
Such realignment exemplifies the Macau authorities’ steadfastness in synchronizing with China’s security agenda despite the market’s ever-changing situation.
Certain analysts based in Macau assert that the casinos have effectively shifted their focus to target the popular premium mass-public and general demographics.
Market watchers are upbeat about 2024 and the coming years. According to JPMorgan analysts last week, there are no indications of an imminent slowdown. Not all brokerages are as persuaded.
Though the $2.42 billion represents 75% of the pre-pandemic March 2019 revenue, March GGR notably improved over March 2023. The best month associated with 2019 was December 2023, when GGR reached 81% of the pre-pandemic level, following China and Macau’s reopening their borders to international traffic by ending “zero-COVID” in late 2022.
According to Bloomberg’s economics correspondents Shirley Zhao and Katia Dmitrieva, Macau’s recovery trajectory following the COVID-19 pandemic is decelerating alongside China’s waning economic expansion. Despite increasing tourist arrivals, the growth has been hindered by a decline in per capita spending, reflecting a downturn in consumer confidence.
The public’s potential reduction in spending is paired with the casinos’ continuous cost increases. The casinos continue to fulfill their nongaming investment obligations as specified by their 2022 relicensing terms, even in the face of inflation.
Jerome oversees our editing and content team and absolutely loves blackjack. So much so that he was a professional player for more than a decade before joining us at Casino Today. He’s written several books, mostly on the subjects of card counting and the different blackjack systems he employed over the years. He also runs a successful YouTube channel where he showcases different blackjack scenarios with beginner tips on how to beat the dealer.
