" Macau will never again reach the peak it previously achieved"
Macao’s rapidly rebounding visitor numbers are not translating to growth in per-person gross gaming revenue (GGR) at the city’s casinos, according to financial research group CreditSights.
A recent note from analysts Nicholas Chen and David Bussey, cited by Inside Asian Gaming,
observed that per-person GGR may have passed its peak, partly due to the collapse of the junket market. Junket operators specialise in bringing affluent VIP gamblers to the SAR, but a number of high-profile criminal convictions has been accompanied by government crackdown on the once-incredibly profitable segment of the gaming industry in recent years.
Chen and Bussey also noted that visits from China’s more wealthy provinces – the likes of Guangdong, Jiangsu, Zhejiang, Beijing, Shanghai and Tianjin – had already recovered to their pre-Covid 19 numbers. “Any further visitation upside from mainland China would likely largely come from the other provinces with lower [gross domestic product] per capita,” they said.
[See more: Sam Hou Fai makes a scathing critique of Macao’s reliance on casinos]
In January, average GGR per visitor (5,006 patacas) was 26 percent lower than the same month in 2024 – though this was likely skewed by the timing of Lunar New Year, when Macao welcomed many non-gambling visitors.
However, the analysts also pointed to healthier figures in February and acknowledged that a year-on-year improvement in per-visitor GGR was “not entirely off the table.”
2024 per-head visitor spending falls amid increased tourism
By Aries Un
Macau recorded a decline in per-capita spending among visitors last year despite a year-on-year increase in total spending.
According to the Statistics and Census Service, the 2024 total reached MOP75.36 billion (US$9.4 billion) – up 5.8 per cent from the previous year.
This growth is largely attributed to a 23.8 per cent rise in the number of visitor arrivals. Last year, Macau welcomed 34.93 million visitors, with 24.49 million of them from mainland China.
Spending by overnight visitors and same-day visitors also saw year-on-year increases of 3.5 per cent and nearly 18 per cent respectively.
The former contributed MOP62.31 billion and the latter MOP13.05 billion to the total.
Boosting Macau mass-market gambling is undoubtedly the key to maintaining growth momentum for the city’s entire casino market, but it is unlikely to push it to the level of the industry’s pre-pandemic performance. That is according to Hoffman Ma Ho Man, deputy chairman of satellite-casino backer Success Universe Group Ltd.
He made the comments during a Thursday lunch for the Hong Kong press.
Mr Ma said it was “unrealistic” to expect Macau’s casino GGR to return to pre- Covid-19 performance, i.e., the levels seen in 2019, as the city now had only circa “20 percent” of its gross gaming revenue (GGR) coming from the VIP segment.
Driving foot traffic to boost mass market play is now the key for the Macau gaming sector to keep its gaming revenue growth momentum, the Success Universe senior executive remarked to the Hong Kong press.
He expected Macau’s city-wide 2025 casino GGR could track year-on-year growth of “a few percentage points”. For the first two months of this year combined – a period that included the lunar new year holiday season – he anticipated GGR might be either “flat” or have “low single-digit” growth, judged year-on-year.
Hong Kong-listed Success Universe is an investor in Macau casino resort Ponte 16, located at the city’s Inner Harbour district on the Macau peninsula. Macau casino concessionaire SJM Holdings Ltd supplies the gaming licence for Ponte 16.
Macau’s gaming sector saw softer-than-expected performance during the Chinese New Year (CNY) holiday, with January’s gross gaming revenue (GGR) reaching MOP18.3 billion ($2.27 billion)—6 percent below consensus.
Analysts at CLSA, Jeffrey Kiang and Leo Pan, attributed the subdued gaming revenue to weaker visitation levels, reinforcing concerns about near-term growth limitations for the sector.
December GGR down 2 pct, full-year tally surges 23.9 pct to MOP226.78 bln
Macau casinos generated MOP 18.2 billion (USD 2.27 billion) in gross gaming revenue (GGR) in December, accounting for a 2 per cent year-on-year decline., according to the city’s gaming watchdog.
This represents the first year-on-year monthly decline since the lifting of pandemic restrictions in early 2023.
The Gaming Inspection and Coordination Bureau (DICJ) also reported that the full-year 2024 figure increased by 23.9 per cent to reach MOP 226.78 billion (USD 28.3 billion), exceeding the MOP 216 billion forecast outlined in the SAR Government’s 2024 budget.
For 2025, authorities project MOP 240 billion (USD 30 billion) in gaming revenue.
The 2024 GGR tally accounts for 77.5 per cent of the level recorded in pre-Covid 2019.
https://www.macaubusiness.com/december-gaming-revenue-down-2-pct-to-mop-18-2-billion-full-year-tally-surges-23-9-pct/
Essa diversificação é uma tarefa impossível?
A curto prazo. Mas, para ser justo para os grandes casinos, é como Jeckyll & Hyde. Por exemplo, se pegarmos no Las Vegas Sands — eles construíram infra-estruturas desportivas, grandes hotéis, espaços para conferências, para além do jogo. Pelo contrário, outros casinos, como o Wynn, são apenas espaços de jogo, com um hotel adjacente. Temos de olhar de maneira diferente. É difícil. As tentativas de deter a saída de capital por parte do Governo Central estão a aumentar. Vi, muito recentemente, mais ou menos 10.000 pessoas detidas por troca de dinheiro ilegal, em Macau, o que é a continuação das actividades dos anteriores operadores junkets. O novo Chefe de Executivo está a reflectir a política nacional de Pequim. Nem sequer é um trabalho difícil, é mais um trabalho para o Tom Cruise [no filme “Missão Impossível”]. É, por isso, que não estou impressionado com as oportunidades de sucesso e de grande lucro para os casinos. Não creio que vão falir, mas os dias de Yabba-Dabba-Doo! [grito de alegria usado na série “Os Flintstones” e depois em “Zé Colmeia”] já passaram. A indústria de jogo vai ficar estável, vai ter ofertas de emprego, mas as pressões para serem forçados a contribuir para actividades não ligadas ao jogo vão torná-la menos atractiva.
jjun24 88.0 percent of the city’s pre-pandemic 2019 GGR
Macau is likely to see circa 28 percent year-on-year growth in casino gross gaming revenue (GGR) this year, and 10 percent growth in 2025, says a Thursday update from Fitch Ratings Inc.
Using its 2024 estimate as a basis – a figure Fitch maintains from an assessment it issued in the first quarter – would put Macau 2025 GGR at around MOP258.00 billion (US$32.08 billion).
That would be about 88.0 percent of the city’s pre-pandemic 2019 GGR, which stood at just under MOP292.46 billion, according to data from Macau’s regulator, the Gaming Inspection and Coordination Bureau.
In March, Fitch had said it was likely Macau’s 2024 GGR would recover to circa 80 percent of the pre-pandemic trading year of 2019.
https://www.ggrasia.com/macau-2025-ggr-to-be-88pct-of-pre-covid-says-fitch/
jun24
Zeng Zhonglu, especialista na área do jogo, considera que, nas próximas duas décadas, o sector em Macau viverá um cenário de crescimento “muito lento”, concorrência “muito mais renhida”, e com um desenvolvimento “mais padronizado, ordenado e sustentável”
https://jtm.com.mo/local/academico-anteve-desaceleracao-jogo-nos-proximos-20-anos/
A new paper on the post-pandemic reality of Macao’s gaming industry says the city’s biggest money-earner has developed “new characteristics” that mean “stable” growth can be expected at best. Published in the latest edition of Macau Polytechnic University’s Global Gaming & Tourism Research, the report drives home the fact that gambling has entered a new – less prominent – era in Macao, when compared with the meteoric expansions of the 2000s and 2010s.
The report noted that Macao’s gaming recovery had been “relatively slow” compared to that of the US and Southeast Asia. In the US, for example, Las Vegas’ gross gaming revenue in 2021 – midway through the pandemic – had already exceeded 2019’s level. It went on to set consecutive records in 2022 and 2023, while Macao’s 2023 GGR was just 62 percent of its pre-pandemic level.
Crucially, the report casts doubt on whether Macao’s gaming industry could ever return to its pre-pandemic “ultra-rapid growth” trajectory, and cites several reasons for pessimism. One was increased competition, as more Asian cities open additional casinos and market them to Chinese gamblers. Other reasons were the government’s crackdown on junket operators, which previously contributed massive amounts of money to the SAR’s casinos’ coffers, and the industry’s pivot from VIP to mass gaming.
https://macaonews.org/news/business/macau-casinos-gambling-industry-forecast-outlook-growth/
ap24
The Legislative Assembly of Macau’s approval of gaming credit legislation, which prohibits junkets from extending gaming credit, is viewed as a significant step towards aligning with public policy in China and Macau.
In an interview with AGB, industry veteran Fredric Gushin endorsed the legislation, stating, “There are unique issues in China because gambling debts are not legal, making the credit decision more important. The junkets operated in an old-fashioned, underground manner, which was inconsistent with public policy in China, Macau, and indeed the world.”
Gushin believes that casinos should be responsible for everything that occurs within their premises, hence “the concept of junkets performing critical casino-related functions is inconsistent with that.”
He also noted the cessation of junkets owning the cage (physical cashier counters on casino floors), likening it to the gaming credit legislation.
The recent legislation, formally titled the “Legal Regime for Granting Credit for Games of Chance in Casinos,” was unanimously approved by the Legislative Assembly of Macau last Friday and is set to take effect on August 1st of this year.
This legislation mandates that only gaming operators can extend chips to gamblers as credit, while junkets are prohibited from engaging in credit activities. However, gaming operators have the option to enter into agency appointment contracts or agency outsourcing contracts with junkets, allowing them to assist in finding gamblers seeking credit and earning commissions in the process.
Additionally, any changes to agency contracts between gaming operators and junkets, along with their supplementary documents, must receive approval from the Secretary for Economy and Finance of Macau.
https://agbrief.com/intel/deep-dive/17/04/2024/banning-macau-junkets-from-insuring-credit-aligns-with-public-policy/
abr24
anApril 17, 2024
Banning junkets from insuring credit aligns with public policy: expert
The Legislative Assembly of Macau’s approval of gaming credit legislation, which prohibits junkets from extending gaming credit, is viewed as a significant step towards aligning with public policy in China and Macau.
In an interview with AGB, industry veteran Fredric Gushin endorsed the legislation, stating, “There are unique issues in China because gambling debts are not legal, making the credit decision more important. The junkets operated in an old-fashioned, underground manner, which was inconsistent with public policy in China, Macau, and indeed the world.”
Gushin believes that casinos should be responsible for everything that occurs within their premises, hence “the concept of junkets performing critical casino-related functions is inconsistent with that.”
He also noted the cessation of junkets owning the cage (physical cashier counters on casino floors), likening it to the gaming credit legislation.
The recent legislation, formally titled the “Legal Regime for Granting Credit for Games of Chance in Casinos,” was unanimously approved by the Legislative Assembly of Macau last Friday and is set to take effect on August 1st of this year.
This legislation mandates that only gaming operators can extend chips to gamblers as credit, while junkets are prohibited from engaging in credit activities. However, gaming operators have the option to enter into agency appointment contracts or agency outsourcing contracts with junkets, allowing them to assist in finding gamblers seeking credit and earning commissions in the process.
Additionally, any changes to agency contracts between gaming operators and junkets, along with their supplementary documents, must receive approval from the Secretary for Economy and Finance of Macau.
Transformational change
Fredric Gushin, managing director of Spectrum Gaming Group with over 30 years of experience in the gaming industry, believes that the legislation is an important step, stating, “It would be consistent with everything else they’ve been doing against the junkets.”
Before the crackdown on the junket’ business in Macau, they had two-thirds of the market share at one point. This move is considered a “transformational change.”
According to the latest update, in the first quarter of the year, the Macau VIP market share is about 25 percent, marking an increase from 23.4 percent in 4Q23. However, this figure still falls significantly short of the 46.1 percent share recorded in 2019.
Most VIP revenues are currently generated through Macau’s concessionaires’ direct VIP programs.
Gushin notes that before the crackdown on junkets’ business in Macau, the GGR was “artificially inflated.” According to the gaming regulator’s data, the number of licensed junkets in Macau has been reduced by half to only 18 in 2024, down from 36 last year and a peak of 235 in 2013.
The aggregate of Macau casino GGR for the first quarter of 2024 stood at MOP57.33 billion ($7.11 billion), including other gaming activities such as horse racing and lottery. The market-wide GGR stood at MOP57.5 billion ($7.13 billion) in the first quarter of the year.
The gaming expert anticipates that Macau’s GGR will continue to grow but will never return to its previous levels, indicating that the former junket business was “highly questionable.”
Macau’s former junket king, president of Suncity Group, Alvin Chau, said during the trial in 2022 that all the VIP rooms and the halls of the concessionaires in Macau had under-the-table betting.
Also referred to as side betting, under-the-table betting is a practice where VIP players make agreements with junket operators to wager significantly larger amounts on each hand than the chips visibly on the table represent.
Although Macau’s recovery has been satisfactory to the operators, Goldman Sachs estimates that Macau’s 1Q24 GGR still stands at 75 percent of the same period before COVID and the crackdown on junkets. This situation continues to indicate that the Macau gaming industry is still recovering from the absence of the junket business.
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