Macau government officials are now reevaluating their revenue projections for the city’s gaming industry. Inside Asian Gaming reported last week that the city’s Economic Association (MEA) expects gross gaming revenues (GGR) to exceed the MOP$130 billion (US$16.1 billion) projected by the government at the start of the year.
According to the MEA report, average daily GGR reached MOP$410 million (US$50.8 million) and MOP$490 million (US$60.7 billion) in March and April respectively, and visitation hovered at about 99,000 per day. Average daily GGR hit MOP$640 million (US$79.2 million) during the Labor Day holiday, the springtime version of Golden Week. Based on these figures, the MEA raised the economic sentiment index to “stable” through July.
“In the first four months, gaming revenue was close to MOP$50 billion, which is about half of the level before the pandemic, and has reached about 38 percent of the SAR government’s target for gross gaming revenue this year,” the report said. “Based on current developments, the annual gross gaming revenue should be better than expected.”
Last year, the Macau government expected GGR of MOP$130 billion in 2023. Their projections have changed steadily since January 8, when borders to the city reopened and travelers returned.
JP Morgan analyst DS Kim said the holiday “wasn’t just a one-week wonder and seems to have had an effect of elevating baseline demand levels, similar to what we saw during Lunar New Year in late January.”
Demand for mass gaming is now at 80 percent to 85 percent of pre-Covid levels, and VIP is at about 25 percent to 30 percent. Those figures compare handsomely to the first-quarter rates: 65 percent mass and 15 percent VIP respectively.
“Of note, 25 percent to 30 percent of VIP GGR recovery implies direct VIP revenues likely doubled vs, pre-Covid levels given the demise of junkets,” Kim wrote. “VIPs still don’t move the needles for profits/CFs, but we believe this level of recovery is pretty impressive nonetheless.”
Global Ratings says it now expects Macau’s mass-market GGR to reach 75 percent to 85 percent of 2019, up from a previous forecast of 60 percent in January. The recovery “has been faster than we anticipated,” said the ratings agency. Casinos “are materially outperforming our previous expectations because of a faster recovery in visitation and GGR than we anticipated.”
