Shares of Macau casino operators rose between 3% and 5% after the Special Administrative Region (SAR) of China’s government disclosed that gaming income nearly doubled in January.
Significant Revenue Growth
Macau casinos generated MOP11.58 billion ($1.44 billion) in gross revenue in January 2023, an increase of 82.5% from MOP6.34 billion ($786.16 million) in January 2022, sending a message of optimism to executives and analysts following the SAR’s gambling industry that it is the start of a solid recovery.
The result was influenced by the increase in visitation during the week-long Lunar New Year holiday, when nearly half a million people arrived in the SAR, as opposed to the disappointment from the low visitation numbers during the three-day New Year’s holiday last month, when international arrivals fell between 33% and 42% when compared to the same days the previous year.
Despite drawing the highest crowds in more than three years, the SAR’s gaming revenue remained below pre-pandemic levels, falling by more than half compared to the Lunar New Year’s holiday in 2019, but investors reacted positively to the news, expecting a robust return.
Another factor that contributed to the January figures was the abolition of testing requirements for inbound travelers from mainland China, Hong Kong, and Taiwan on January 8, which resulted in a surge of mainland tourists.
The casino industry in the SAR has been severely impacted by the Chinese authorities’ zero-COVID policy, as well as the attack on junket operators following the arrest of Suncity CEO Alvin Chau, which continues to weigh on the impetus for junket operations, resulting in their numbers continuing to decline. Chau was recently sentenced to 18 years in prison by a Macau court.
Commencing New Concession Deals
January was the first month for the new contracts for Macau’s concessionaires – Sands China, Wynn Macau, MGM China, Galaxy Entertainment, Melco Resorts, and SJM Holdings – following the signing of the new 10-year contracts in mid-December which authorized the casino operators to legally offer games of fortune until the end of 2033.
As part of the new concession deals, casino operators agreed to pay a new fee to the government based on the size of their casino floors, despite the plunge in their revenues in 2022 when Macau registered 50% less year-over-year, one of its worst revenue performances on record.
Casinos also committed to investing a total of $15 billion, 90% of which should be invested in non-gaming facilities such as water parks, health and wellness centers, art exhibitions, garden attractions, and others.
Learn To Play Video Poker Perfectly – Free Training Program
Leave a Reply