Posted on: September 1, 2024, 10:19h.
Last updated on: September 1, 2024, 10:19h.
Macau casino revenue in August totaled MOP19.8 billion (US$2.47 billion). The August draw was up 14.8% year-over-year and 6.2% from July.
The gross gaming revenue (GGR) numbers provided by the city’s Gaming and Inspection Coordination Bureau account for about 81.5% of pre-pandemic August 2019 levels when the six commercial casino operators combined to win a little more than $3 billion.
August was Macau’s second-best month since Chinese President Xi Jinping lifted “zero-COVID” in late 2022 and allowed some form of normalcy to return to the world’s second-most populated country and second-largest economy. Macau is under Chinese control through a “one country, two systems” policy principle that’s applied to the People’s Republic’s two Special Administrative Regions (SAR) — Macau and Hong Kong.
August Meets Expectations
Macau’s August GGR was in line with analyst expectations. Citigroup had pegged August revenue at MOP20 billion, while JPMorgan had called for an August win of around MOP19 billion to MOP19.5 billion.
On paper, August seemingly suggested a rebound in gaming, as casinos continue to pivot from the VIP segment to the mass market. It wasn’t a refocus the operators wanted but their hands were forced after Xi’s Beijing instructed the Macau SAR Government to force out junket groups that had catered to mainland high rollers.
However, there’s more to the August 2024 revenue story. August benefitted from having 14 Fridays, Saturdays, and Sundays, as compared to only 12 in August 2023. July 2024 also had 12 weekend days.
But with a strong August, GGR through eight months of 2024 totaled MOP152.1 billion (US$18.92 billion). That’s a 33% surge from the same period in 2023 and represents almost 78% of the pre-pandemic 2019 January through August number.
Market Headwinds
Macau’s gaming industry underwent considerable change during the pandemic. The six concessionaires in late 2022 agreed to invest $16.2 billion into their resorts in nongaming projects in exchange for new 10-year gaming licenses.
Just a month later, the terms became more unfavorable to the licensees after Suncity boss Alvin Chau was found guilty of running a criminal syndicate and facilitating illegal gambling. Dubbed the “Junket King” for Suncity controlling around a quarter of the junket business in Macau, Chau’s sentence of 18 years in a Chinese prison prompted most VIP groups to flee to more favorable markets like Vietnam, the Philippines, and South Korea.
Macau’s next chief executive could further strain the city’s casino industry. With Chief Executive Ho Iat Seng not seeking reelection because of health problems, former Court of Final Appeal President Sam Hou Fai is the odds-on to become Macau’s top government official.
Sam recently expressed his opinion that Macau diversify away from gaming. Casinos continue to account for more than 80% of the region’s tax income.
During a media briefing last week, Sam said that the casino industry “developed in a disorderly manner” and has “expanded wildly.” He opined that “having one dominant industry is not beneficial” for the city’s long-term development.
Sam believes the casino’s dominance has also resulted in tunnel vision for Macau’s youth who think their only career opportunity is in gaming.
