Prior to the coronavirus pandemic, Macau reigned supreme as the world’s top casino center in terms of revenue. Its close proximity to China and the Chinese citizens’ love for gambling contributed to its success. Unfortunately, this all changed due to the global health crisis.
In a move that proved to be comparably false and eerily reminiscent of the “two weeks to flatten the curve” conjecture spewed so frequently in the US during the early days of COVID-19, Macau gaming venues closed for 15 days in 2020 with hopes of a quick return to normalcy. However, the reality was far from normal. It wasn’t until January 2023 that the Chinese Communist Party (CCP) lifted the country’s coronavirus protocols, which included numerous travel restrictions to Macau.
Along the way, the special administrative region (SAR) lost its title as the “world’s top casino center” to Las Vegas. Throughout much of the pandemic, Nevada’s gross gaming revenue (GGR) surpassed that of Macau, led by Sin City. Nevertheless, the Chinese gaming enclave is making a comeback.
In the first half of this year, Macau’s six concessionaires generated a combined GGR of $10 billion, surpassing the $7.5 billion achieved by Nevada casino operators, according to the Wall Street Journal.
Macau Poised to Extend Lead Over Las Vegas
Macau’s resurgence in 2023 could prove to be more than just a temporary boost. Analysts predict that the SAR’s GGR for 2023 will not only recover to pre-pandemic levels but also exceed them, leaving room for further growth.
Most experts anticipate a return to pre-pandemic revenue levels by next year, suggesting that Macau’s lead in GGR over Las Vegas may continue to widen. Notably, Macau’s outperformance is primarily driven by mass and premium mass players, as the VIP sector, which traditionally catered to high rollers, has diminished significantly.
“While the number of high-rollers may be fewer than a decade ago, even low-end gamblers typically wager more than $1,500 per hour at the tables, and higher-end mass-market players lose an average of over $2,500 per day,” reported the Journal, citing industry analysts.
According to Citi’s most recent Macau table survey, average table game wagers for premium mass players have increased by 5% this month.
Gradual Return of Whales to Macau
Las Vegas certainly attracts its fair share of high rollers, but China holds the advantage in this section. This bodes well for Macau operators, and there are signs that whales are slowly returning to the SAR.
The Citi survey indicates that VIPs, who typically wager an average of close to $13,000 per hand, have shown a modest increase in visits to Macau this month.
“The data we collected before COVID showed similar month-on-month declines in wager per player in 2018 and 2019,” noted the bank. “We believe this seasonal trend is due to the fact that the visitation-strong month of August also attracts more casual, less avid players.”
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