Las Vegas’ casino revenue has hit higher than Macau for the first time in 18 years as the casino sector in the city struggled to ride out the pandemic storm that brought heavy losses.
In a historic moment for the sin city, the casino hub surpassed Macau’s gross gaming revenue (GGR) for the first time since 2005, when Vegas earned around USD200 million more.
However, the instance may just be a one-off due to the setbacks the industry faced in 2022.
The gaming sector has faced a double whammy with the pandemic restrictions as the city adhered to Beijing’s strict Covid policy, a crackdown on cross-border gambling kept casinos mostly empty for much of 2022, as well as the uncertainties due to the pending licensing renewals of the six gaming concessionaires.
Aside from trying to make up for the losses given they have been bleeding cash since 2020, casino operators were dealing with the extra burden of trying to expand non-gaming ventures as a requirement for the license renewal.
The proposals required them to include billions in investment in non-gaming offerings for the next decade.
Although the big six have raked in billions of dollars from their casinos for the past 20 years, receipts have turned sour since the outbreak.
In 2022, the SAR recorded a GGR of MOP42.2 billion, a heavy plunge of 51% when compared year-on-year. The figure is also the lowest in nearly two decades, and is down 40% when compared to Las Vegas.
Last year’s annual takings were the lowest since 2004 and the city — which in 2019 reported GGR that was six times that of Las Vegas — lost its title of world’s top gambling hub.
The year 2022 was good for gambling and tourism in Nevada, where winnings at casinos statewide set calendar year records and Las Vegas visitor tallies nearly approximated levels prior to the coronavirus pandemic.
Figures from the Nevada Gaming Control Board show that 459 large casinos statewide won an all-time high of USD14.8 billion last year, up more than 23% from the calendar year 2019.
Nevada has also enjoyed its 22nd straight month of over USD1 billion revenue in December.
However, analysts at new gaming outlet Vegas Slot Online believe that it was just a one-off, as Macau is primed to rebound strongly following the easing of travel restrictions last month, as cited in its report.
Although Vegas casinos are expected to be bullish, the city is feeling the effects of pent-up demand from Covid-19, and the full year of 2023 may not acquire significant double-digit growth percentages, due to potential economic slowdowns.
In Macau, the government has retained its expectations of MOP130 billion in GGR in 2023, similar to what it had forecast in 2022. It failed to reach this target last year, given the several border-restrictions due to outbreaks in the neighboring region that deterred mainland visitors from entering Macau.
In January, casinos saw GGR surge, as China’s reopening and the week-long Lunar New Year break sparked an influx of visitors to the gambling hub.
Data shows that GGR climbed 82.5% last month year-on-year to MOP11.6 billion, beating the median estimate of a 36.5% increase, according to analysts surveyed by Bloomberg.
This is the first rise since February last year and the highest monthly revenue since January 2020.
Meanwhile, February is rebounding far better than expected.
Brokerage Morgan Stanley expects February GGR to stand at MOP11.2 billion as the demand for gaming, as well as the hotel occupancy rates and prices remain robust, even a few weeks after the Chinese New Year.
Analysts have previously noted that earnings were estimated at MOP1.9 billion in the first five days of February, as the city has been swarmed by visitors amid the significant easing of restrictions, a figure that represents a recovery of 45% of 2019 figures.
The average daily revenue amounts to MOP380 million, slightly more with the daily average of MOP374 million in January.
