For the first time since the COVID-19 outbreak began in January 2020, revenue from Macau casinos has surpassed the US$2 billion mark in a single month.
Gross Gaming Revenue (GGR) in Macau SAR reached 22.126 billion patacas (US$2.06 billion) in July 2023. Six commercial casino operators including Sands, Galaxy, Wynn, Melco, MGM and SJM continued to rebound during the epidemic, with June revenue up nearly 10% from May.
Casino gaming revenue in July 2023 surpassed the region’s best monthly revenue record so far in the post-pandemic period (let’s recap, that was May 2023 with $1.93 billion in revenue). Revenue of US$2.06 billion exceeded the average forecast by analysts in the Macau Guide.
July’s year-on-year growth topped 4,000 percent as Macau was largely shut down a year ago last month while Chinese President Xi Jinping maintained his controversial “zero-coronavirus” policy. Strict pandemic-tracing strategies have led to strict lockdowns and travel bans, despite the detection of some new coronavirus cases.
In November 2022, Xi Jinping ended the “zero new crown” policy implemented for nearly three years. This policy has led to the stagnation of the Chinese economy and has caused serious losses to Macau’s tourism and gaming industries. Before the pandemic, Macau’s tourism and gaming industries generated more than 80 percent of the local government’s tax revenue.
Rebound Rolls On
Although Macau’s casino gaming industry is very different before COVID-19 than it is now, it is still enjoying a recovery.
Macau local officials have been tasked with reissuing the gaming licenses of six companies during the pandemic. However, VIP gaming and the junket syndicates that have lured mainland billionaires to casinos for more than a decade to avoid taxes must be scrutinized more strictly because of demands from Beijing. As a result, Macau has introduced major reforms to its regulatory environment.
VIP junket groups have largely disappeared as travel organizers have gone bust and turned to popular Asian markets. Previously, China arrested and sentenced Zhou Zhuohua, a representative of Macau’s intermediary industry, on charges related to operating Suncity intermediary company. He was sentenced to 18 years in prison for gambling crimes.
In November, Macau’s government issued new 10-year gaming licenses to six concessionaires in a bid to diversify the region’s most critical industries, but also imposed fairly high non-gaming requirements.
The six casino giants must invest a total of $13.5 billion in non-casino operations over the life of the license. The introduction of the VIP program has also prompted casinos to place a greater emphasis on the general market and high-quality general market, the latter referring to general public gamblers who may not frequent but gamble more when they do.
Gaming Remains Below 2019
Despite a significant recovery in Macau casino revenue in 2023, it will still be a long time before the market returns to pre-pandemic levels.
Total gaming revenue in Macau is just over US$12 billion through July 2023. Casino revenue totaled more than $21.6 billion between January and July 2019, meaning that even with a rebound in 2023, seven-month gaming revenue for the full year would still be 44% below 2019 levels.