Macau's Gaming Sector Sees Strong Rebound in 2023

Macau, the renowned Chinese gaming enclave, is experiencing a robust resurgence in its gaming industry after facing setbacks due to the COVID-19 pandemic.

In the first half of this year, Macau's six concessionaires collectively generated an impressive $10 billion in gross gaming revenue (GGR), surpassing the $7.5 billion earned by Nevada's casino operators during the same period, according to the Wall Street Journal.

This revitalization signals a potential return to Macau's previous status as the world's leading casino center in revenue terms, a position temporarily surrendered due to the global health crisis.

The pandemic led to a 15-day closure of Macau's casinos in 2020, with hopes of a swift return to normalcy. However, the Chinese Communist Party only lifted the country's COVID-19 protocols in January 2023, which included restrictions on travel to Macau. These measures caused the special administrative region (SAR) to lose its title as the top casino hub to Las Vegas.

Nevertheless, Macau's resurgence in 2023 indicates room for further growth. Analysts predict that the SAR's GGR for the year may not reach 100% of 2019 levels, implying potential for continued expansion.

The anticipated return to pre-pandemic revenue levels next year could enhance Macau's lead over Las Vegas in terms of gaming revenue. Interestingly, Macau's GGR outperformance of Las Vegas is primarily driven by mass and premium-mass players, as the junket industry catering to high rollers has considerably diminished.

Although the number of high rollers in Macau is lower compared to its peak a decade ago, even lower-tier gamblers are placing significant bets at the tables, with some wagering more than $1,500 per hour. Industry analysts note that higher-end, mass-market players are also contributing substantially, with an average loss of over $2,500 per day.

Recent data from Citi's Macau table survey reveals a 5% increase in average table game wagers this month among premium mass players, indicating a positive trend in the sector.

Furthermore, the gradual return of high-stakes gamblers, known as whales, to Macau is evident. While Las Vegas also attracts high rollers, the numbers favor Macau due to a strong presence of Chinese players. The good news is that there are indications of whales starting to return to the SAR.

Citi's survey suggests that VIPs, whose average wagers approach $13,000 per hand, have shown a slight increase in Macau visits this month.

Citi's analysis notes that this trend aligns with previous years' patterns, suggesting that the return of more casual and infrequent gamblers often coincides with months like August, known for higher visitation rates.

Macau's gaming industry's resurgence in 2023 positions the region to regain its status as a global casino hub, driven by an emphasis on mass-market players and the potential return of VIP whales.

By fLEXI tEAM