Macau: Gaming Revenue Expected To Climb In January; Investment Banks Forecast $497M To $770M

Macau: Gaming Revenue Expected To Climb In January; Investment Banks Forecast $497M To $770M

According to local media reports, multiple investment banks have predicted that Macau’s gaming sector will generate revenue of somewhere between 4-6.2 billion patacas ($497 – $770 million) this month.

Citigroup recently said in a note that casinos in the major gambling hub managed to turn out an average of MOP114 million ($14.1 million) in revenue in the 13 days ending 1 January this year, an indicator that sporadic spikes of infections across the city and major Chinese cities recently had dampened visitor arrivals.

Drawing on that figure, the firm believes that this month could see gaming revenue climb to 4 billion patacas ($497.3 million) after a seasonal slowdown before and during the Lunar New Year, reports Macau Business.

Macau casinos come from their worst year since 2004 as China’s strict Covid Zero policies wrought havoc on the gambling hub in 2022. The Gaming Inspection and Coordination Bureau said earlier this month that gross gaming revenue in December fell 56% from a year earlier to 3.48 billion patacas ($433 million), slightly below the median estimate of a 57% decline.

Credit Suisse Group AG said in a recent report that last month saw a daily average of MOP112 million ($13.9 million) in gaming revenue, about 15% of the pre-pandemic level, while the fourth-quarter performance rose 87% on the previous quarter, pointing to a possible end to the worst for the casino sector.

The investment bank expected what it called a “meaningful” month-on-month increase, citing positive factors such as visitor arrivals from Hong Kong and the Chinese mainland, adds the cited source. Morgan Stanley also expects a jump and said in a recent report that gaming revenue would gain momentum by the end of January to hit 6.2 billion patacas ($770 million).

As noted by Macau Business, the recent New Year’s Eve holiday saw over 28,000 visitors arrive in the city. Bank of America said in a report that the number of visitor arrivals would continue to climb as the Spring Festival approached, leading to gaming revenue of about 5 billion patacas ($621.6 million).

Earlier this week, Macau gaming companies MGM China, Sands China, Wynn Macau, SJM Holdings, Galaxy Entertainment, and Melco Resorts issued stock filings offering details on the terms involving the annual fees they will pay to the government, as the new ten-year concession kicked off on January 1, 2023. The details coincide with the amount to be paid as annual utilization fees of casino areas.

As reported by local media, gaming concessionaires will pay the Macau government annual utilization fees of MOP750 ($93.5) per square meter of the casino areas they operate, as indicated by stock filings sent by casino operators to the Hong Kong Stock Exchange. The amount will see a 3.3-fold increase to MOP2,500 ($311) per square meter in 2026.