Macau Casinos Exceed Analyst Expectations, February Win Totals $1.3B

Macau casinos exceeded expectations in February, as gross gaming revenue (GGR) soared past analyst outlooks.

Macau casinos gross gaming revenue GGR
Macau casinos won $1.28 billion in February 2023, the local industry’s second consecutive month winning at least $1 billion in gross gaming revenue. With China recently lifting COVID-19 travel restrictions, hopes for a gaming recovery in Macau are high this year. (Image: Reuters)

February GGR came in at MOP10.32 billion (US$1.28 billion), about 33% higher than a year ago. The $1.28 billion topped the analysts’ consensus February GGR forecast of $1.17 billion.

Although February was 11% lower than January when the six casino operators collectively won $1.43 billion, February had three fewer days and January is also where the Chinese New Year fell in 2023. The weeklong public holiday is one of the major holidays in China when many mainlanders opt to travel.

February’s GGR report from the enclave’s Gaming Inspection and Coordination Bureau highlights the ongoing recovery of the casino hub. The only place where commercial gambling is permitted in the People’s Republic, Macau’s casinos have been desperately waiting for their own recovery and hope it rivals the quick bounce back that was experienced in Las Vegas after pandemic conditions improved in the US.

Through two months of 2023, Macau GGR totaled approximately $2.71 billion — 55% higher than the first two months in 2022. Though gaming revenue is heading in the right direction for the operators, January and February GGR this year remained $3.5 billion below the $6.23 billion that the casinos won during the first two months of 2019.

Rebound Continues

February faced difficult comparables, as February 2022 had the Chinese New Year. But February 2023 benefited from China President Xi Jinping ending “zero-COVID” and doing away with nearly all pandemic-related travel restrictions.

In Macau, the Chinese Special Administrative Region (SAR) lifted most border restrictions tied to COVID-19 on Jan. 8. Travelers from mainland China, Hong Kong, and Taiwan can now freely move about the SAR without being subjected to testing or quarantine requirements.

Macau is also finally open to foreigners. Travelers arriving at Macau’s border gates gain entry by presenting a negative COVID-19 test conducted within 48 hours of their departure. International travelers arriving in Macau via the mainland, Hong Kong, or Taiwan must present a negative test taken within 48 hours of arriving at the enclave.

Fewer entry rules have resulted in increased demand. And that prompted the resumption of ferry and bus service between Macau and Hong Kong.

2023 Outlook

Analysts are adjusting their full-year revenue outlooks for Macau on the stronger-than-expected numbers. Morgan Stanley recently elevated its 2023 GGR projections by 42%, with the investment house now projecting casino revenue to total around $22 billion.

If that number is realized, the Macau casinos would win about 60% of their 2019 GGR of $36.5 billion.

Analysts have conceded that predicting the Macau casino sector is much more difficult than in prior years after VIP junket groups were largely forced out of the industry. As a result, the casinos are pivoting towards the mass market gambler. While Sands and Galaxy Entertainment are said to lead the mass market, the general public has never been so sought in Macau by all six gaming giants.

The casinos last year agreed to invest heavily in non-gaming amenities in exchange for their new 10-year concessions that run through 2033. The goal is for Macau to follow Las Vegas’ lead in diversifying its economy away from just gambling and pivot to become a global destination for leisure travel and business gatherings and events.

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