HONG KONG - Macau’s casino industry defied China’s weakened consumer spending in December 2023 as gaming revenue climbed 433 per cent, with the annual take returning to 62.6 per cent of pre-Covid-19 levels.
Gross gaming revenue reached 18.6 billion patacas (S$3.1 billion) for the month, according to data released by the Gaming Inspection and Coordination Bureau on Jan 1. The result, 81.3 per cent of what it was in December 2019, was better than the median analyst estimate of a 402 per cent year-on-year increase.
Gaming income for the full year hit 183.1 billion patacas. Shares of MGM China Holdings surged 4.9 per cent on Jan 2, while Sands China jumped 3.9 per cent.
In the first year after China ended its Covid-19 policy of lockdowns and tough travel restrictions, Macau – which relies on the country for the bulk of its visitors – has seen steady recovery in its gaming sector. The industry remains resilient even as China enters months of economic slowdown fuelled by a property market crisis.
While consumer sentiment weakens, a change in spending patterns has benefited Macau casinos as tourists seek entertainment and other instant gratification activities rather than buying luxury handbags.
Operators said spending per head for premium gamblers remains above 2019 levels and some noticed that high-end customers visited Macau more often despite China’s consumption decline, Morgan Stanley said in a December note.
Average minimum bet across Macau in mid-December was about 12 per cent higher than before the pandemic and players seemed to be less concerned about economic uncertainties than investors, according to a Citigroup survey.
Still, it could take years for gaming revenue to fully recover after China’s crackdown on high rollers and capital outflows brought the demise of Macau’s VIP sector, which contributed to half of the city’s gambling income before the pandemic. Analysts forecast that revenue could return to about 76 per cent of pre-pandemic levels in 2024.
The Bloomberg Intelligence index of Macau casino operators rose 14.8 per cent in December, but was still down 19.1 per cent for the entire year. The benchmark Hang Seng Index slumped 13.9 per cent for the year. BLOOMBERG
