Definitely bigger than Vegas, again: Macau GGR increases 7-fold in August
The city’s casino recovery is sustaining its momentum, with gaming revenue in August soaring a staggering 686% from a year earlier to the highest level since January 2020.
Gross gaming revenue (GGR) reached MOP17.2 billion ($2.1 billion), according to data released by the Gaming Inspection and Coordination Bureau (DICJ).
According to Bloomberg, the result surpasses the median analyst estimate of a 678% increase and has rebounded to 71% of the 2019 levels.
By the end of August, overall GGR stood at MOP114 billion ($14.1 billion), an increase of 295% from a year earlier.
Bloomberg analysts say these results indicate that “spending on travel and experiences is withstanding consumer concerns about China’s economic slowdown.”
The gaming industry has been buoyed by the summer holiday season and strong demand for leisure activities among Mainland consumers, who make up the bulk of the gambling hub’s visitors, followed by a considerable Hong Kong patron segment (approx. 26%).
Macau recorded 2.8 million visitor arrivals in July, which has recovered to 78% of pre-pandemic levels, according to the latest official data, seen by Macau Daily Times.
Analysts cited by Bloomberg believe that casinos haven’t seen any impact from China’s economic slowdown.
“The richest 1% of the country’s residents are still traveling and spending on entertainment as usual,” Morgan Stanley (MS) analysts including Praveen Choudhary wrote in a report, citing operators.
MS mentions that operators are “cautious about September,” with gaming revenue typically falling 9% month-on-month following the summer-break boost.
The second half of the year will test the industry’s resilience as China’s economic uncertainties endure, while the resumption of group tours to a raft of countries may also mean Macau faces competition in enticing visitors, Bloomberg has reported.
Macau has been pushing to diversify its economy away from gambling, and the casino sector is reducing its reliance on high rollers from mainland China after Beijing cracked down on capital outflows.
According to data collected by IAG, premium-direct and premium-mass gamblers are replacing the old junket-based model to the benefit of casino earnings because the margins from the former are considerably higher than the latter.
Tough rules of engagement
Not everything is rosy for the Big Six, though.
The six concessionaires have committed at least MOP120 billion ($15 billion) over the coming decade to develop non-gaming elements and have been hosting more concerts and MICE events this year to draw in more mass market tourists and business visitors.
Moreover, the Big Six are also expected to contribute to urban renovations of historic neighborhoods and landmarks, and the organization of arts events in each area.
As it happened last week in Tianjin, the operators also support the promotion of Macau tourism, business, and culture in China and overseas.
Helena de Senna Fernandes, the tourism boss, put it clearly in a press briefing last week: “It’s not enough [for them] to just throw money in sponsorships, they have to contribute [beyond that].”
All the gaming operators seem to be on board – in the end, they are fast recovering from the dark Covid era – but this requirement is far from being consensual.
“Our job is or should be to operate the properties and pay high taxes to enrich government coffers, and, of course, to organize events and contribute to society through our CSR policies,” the Times recently heard from an insider, who must remain anonymous because he is not authorized to speak to the press.
