Macau Gross Gaming Revenue to Return to 82% of 2019 Level: Analysts


Analysts focused on Macau are anticipating a second year of COVID-19 pandemic recovery after gaming rebounded 334% last year to reach about 63% of the market’s 2019 level.

Macau gaming revenue casinos
Tourists take photographs in front of the Ruins of Saint Paul’s in Macau in 2019. Macau casinos are betting big on attracting new visitors to the casino hub through nongaming developments. (Image: The Wall Street Journal)

Gross gaming revenue (GGR) in Macau totaled $22.7 billion last year. Market observers believe the mass market fully returned, but declines in VIP play kept the Asian casino hub depressed compared with 2019.

Macau is amid both a pandemic recovery and an overhaul of its casino industry. The days of junket groups bringing a bounty of VIP high rollers to the Chinese Special Administrative Region (SAR) are largely gone. The market change came after Beijing ordered law enforcement to keep closer tabs on junket organizers, which led to the prosecution of Suncity Group billionaire Alvin Chau, who is now serving 18 years in a Chinese prison.

Macau’s six casino operators are diversifying their resorts to attract a wider group of visitors, specifically nongamblers. In exchange for new 10-year gaming licenses in December 2022, the six companies agreed to invest $13.5 billion into nongaming projects. The spending pledge increased by $4.48 to nearly $18 billion after 2023 triggered a 20% premium on the nongaming obligations.

2024 Outlook

Analysts believe the 12 months ahead will further improve Macau’s pandemic comeback. In a note issued this week, Hong Kong-based financial services firm CLSA Limited said it expects GGR in Macau to recover to 82% of 2019 levels this year.

In 2019, Macau casinos won $36.3 million, meaning CLSA analysts project 2024 casino win to total around $29.8 billion. That would represent a more than 30% year-over-year improvement.

Mathematically, the first half of 2023 was still a low base for Macau’s GGR, as it took time for Macau to solve the labor shortage bottleneck and for transportation capacity from mainland China to ramp,” the CLSA note explained.

The CLSA analysts say they expect 2024 holidays to be “robust” in Macau. The holiday calendar in China is highlighted by next month’s Chinese New Year. The Spring Festival runs from February 10 to February 17, and is a time when most workers are provided with the week off. Other major holidays include the May 1-5 Labor Day and October 1-7 National Day.

Visitors Needed

For gaming to continue its rebound, Macau must further attract new visitors, and presumably, convert some to become mass-market gamblers. Analysts at Nomura aren’t overly confident that the region will return to 2019 visitation levels this year.

Macau counted about 28.2 million visitors last year, nearly 400% more than the number of border crossings in 2022. That accounted for just 71.5% of the 39.4 million travelers that Macau welcomed in 2019.

Nomura analysts said “sizeable headwinds remain” for Macau to get back to 2019 visitation conditions.

The research note cited “stagnated” income among the mainland public as a leading reason for subdued visitation optimism this year. A weakened yuan relative to other major global currencies was also blamed.

Things aren’t as bad in Macau as they are in other Association of Southeast Asia Nations (ASEAN). Nomura said flights from China to Singapore, Malaysia, the Philippines, Thailand, Vietnam, and Indonesia have recovered to less than 60% of their 2019 levels.

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