In March 2023, Macau casinos exceeded US$1.5 billion in gross gaming revenue (GGR), the highest monthly earnings since the COVID-19 pandemic in 2019. According to recent data, the six casino operators licensed in the Chinese Special Administrative Region (SAR) hit a 38-month high in the blissful month. Macau is China’s only gambling destination, but the industry has been at an all-time low for the last three years. The current surge, according to casino industry experts, is due to the relaxation of pandemic-related rules and several other significant local and global changes.
Managing businesses in the casino industry has been challenging in the midst of the post-COVID-19 recession. Operating in the human interaction-reliant sector was nearly impossible due to random lockdowns, stringent travel restrictions, and interruptive demands for mass testing. Casino operators, on the other hand, can finally breathe a sigh of relief. The business has returned to normalcy, and revenue has increased dramatically in recent months.
The Gaming Inspection and Coordination Bureau (DICJ) reported that Macau casinos earned 12.738 billion Macanese patacas (US$1.58 billion). The March revenue is 23% higher than the February 2023 GGR of MOP$10.32 billion (US$1.28 billion) and slightly higher than the January revenue of MOP$11.58 billion (US$1.43 billion). The revenue generated in March 2023 is a whopping 247% higher than in March 2022, indicating that the gambling industry is fully recovered. The ability of the Macau casino industry to collect MOP$34.64 billion (US$4.29 billion) in the first three months of 2023 demonstrates the region’s strength this year. It’s the highest first-quarter figure since 2020.
Contrary to popular belief, the rise of online casinos has yet to deplete the land-based casino sector. The Covid-19 pandemic accelerated the growth of online casinos while, sadly, forcing the closure of land-based casinos. However, with the decline of COVID-19 cases and its global effects came a resurgence of land-based casinos.
The gaming industry is quickly returning to its previous state, with land-based casinos benefiting from the relaxed rules allowing the reopening of entertainment establishments. The shift in Macau reflects the global increase in land-based casino revenue. Revenue recovery is not an alien concept. In several gambling hotspots around the world, revenue generated by brick-and-mortar casinos appears to be unaffected by online casinos. According to some studies, despite the rise of online gaming, revenue from land-based gambling is still increasing.
Asian land-based casinos have benefited the most from the COVID-19 rule relaxation. Despite the widespread use of online casino platforms, traditional casinos have reopened with vigor. This is especially true in major gambling cities such as Seoul, Gangnam district, and Macau.
The Macau government lifted almost all COVID-19 border restrictions on January 8. It removed the requirement for foreign tourists to be quarantined and stopped testing visitors from mainland China, Hong Kong, and Taiwan. In addition, after a nearly three-year hiatus, ferry and bus services connecting Macau and Hong Kong were restored, boosting Macau’s economy, including the casino sector.
The changes in Macau’s casino industry and overall economy indicate a bright future. Investment banks are already shifting their perspectives on Macau. In a recent report, Morgan Stanley stated that it had increased its estimates for Macau’s casino operators’ gross gaming revenue by 42%. It also increased its 2023 earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast for the region by 70%.
The investment bank attributed the increase in estimates to an improved product mix and higher margins due to the return of Chinese customers following the relaxation of border restrictions. More visitors do not always translate into more gaming revenue, especially now that group tours are permitted to resume, and people traveling in groups frequently have limited budgets. However, Macau’s casinos have benefited from the city’s gamblers thus far. The casino industry is expected to expand further as visitors increase.
The COVID-19 pandemic was disastrous for the people who run casinos in Macau, but the new rules for controlling pandemics have put the businesses back on track. The fact that Macau’s casino business is rising shows that brick-and-mortar casinos have returned to prosperity. The gross gaming revenue of Macau’s traditional casinos is expected to rise steadily in the second half of the year. The increased ease of travel for business people and tourists will almost certainly boost the casino industry above pre-pandemic levels.