After three tumultuous years for the casinos, the sector experienced significant upturn in 2023 following the reopening of the borders.
Macau’s casino revenues hit MOP183.06 billion for the entire year of 2023, the Gaming Inspection and Coordination Bureau announced, surpassing initial government expectations earlier last year.
Gross gaming revenues (GGR) in December reached MOP18.6 billion.
The result was better than the median analyst estimate of a 402% year-on-year increase, and represents a return to 81.3% of 2019 levels.
JP Morgan analysts observed that last month’s earnings marked the first instance where earnings reached 80% of pre-Covid levels.
The 2023 earnings have also exceeded the Chief Executive’s expectations of MOP180 billion, which is MOP50 billion more than it expected earlier last year.
However, as the revenues exceeded MOP180 billion, the six gaming concessionaires are required to pledge an additional 20% in gaming investment, as stipulated in their government contracts – notwithstanding that 2023 was the only year of recovery following significant cash outflows from 2020 to 2022.
Casino operators including MGM and Melco have previously told the press that their companies are financially able to make the additional 20% investment as stated in their respective government contracts.
After securing licenses to operate in late 2022, as part of the city’s biggest gaming law overhaul, the six casino operators agreed to invest MOP118.8 billion after being granted 10-year operating licenses, with the bulk of the money pledged towards investment in non-gaming projects.
In October last year, Fitch Ratings projected that full-year gaming revenue would reach almost 80% of 2019 levels.