Mass Market Fuels Macau Casino Revenue to Best Monthly Mark Since January 2020

The Macau casino industry saw its largest monthly revenue haul since the start of the COVID-19 pandemic in January 2020 because to China's mass market in May.

The six gambling operators in Macau, namely Sands, Galaxy, Wynn, MGM, Melco, and SJM, won a total of MOP20.188 billion (US$2.51 billion) in May, according to the city's gambling Inspection and Coordination Bureau. The month was approximately 30% more than May 2023 and represented a rise of roughly 9% from April.

The total gross gaming revenue (GGR) for five months of 2024 is $11.19 billion, which is 24% less than what the six casino corporations generated in the same period prior to COVID 2019. However, it is 48% higher than in 2023. 

The gaming sector, which is Macau's most important economic driver, is still growing despite the market being restrained in 2019 despite a greatly changed regulatory landscape.


Taking Off in the Mass Market

The government of the Macau Special Administrative Region (SAR) drastically changed the regulations pertaining to the operations of the six casino firms during the pandemic. VIP junket groups who have kept high-roller rooms busy for years were informed by Macau officials that their operations would be subject to closer supervision at the behest of Beijing.

President of China Xi Jinping thought that millionaires on the mainland were able to transfer part of their cash holdings through the tax haven through junket groups, reducing their financial responsibilities to the communist government. The majority of junkets fled to emerging gambling markets like Vietnam and the Philippines, where laws are more accommodating to their travel business, as a result of the crackdown.

There are fewer VIPs in Macau as a result of the junket migration. The six concessionaires were compelled by this to reconsider their business plans and concentrate more on the mass market.

The public shift is still ongoing, but analysts believe investors should be happy with how fast the gambling companies have been able to change.For Macau's casino license holders, May marked "a record-high mass GGR," according to JP Morgan analysts.

"The month printed the best GGR in 50-plus months and a record-high mass GGR in the history of Macau — quite impressive, especially given mounting investor concerns on macro/consumption elsewhere in China,” wrote analysts DS Kim, Mufan Shi, and Selina Li.

It was the best month since January 2020, when the casinos stole $3.1 billion from gamblers, with $2.51 billion won last month. May 2024's GGR was 22% less than May 2019's $3.22 billion.

The six casinos' 2022 license agreement requires them to keep funding non-gaming initiatives. Before 2032, the corporations have to invest roughly $18 billion in non-gaming projects.

June Outlook: According to analysts, gaming revenue will decline in June. June is usually a slower month due to the Labor Day Golden Week holiday in May as well as the hot weather, with daily highs of about 90 degrees Fahrenheit. 

According to reports, June is the month with the lowest seasonal gaming revenue in Macau. Analysts at JP Morgan anticipate that GGR will bring in about $2.2 billion.

Despite global economic worries, China's single casino business is still growing in terms of revenue. In May, factory activity on the mainland declined more than anticipated, which might portend additional slowdowns in the second-biggest economy globally.