Macau March casino revenue beats estimates, boosted by holiday

MACAU’S gaming revenue surged in March, exceeding analyst estimates as a recovery in the world’s largest casino hub picked up speed.

Gross gaming revenue rose 53 per cent from the prior year to 19.5 billion patacas (S$3.3 billion) for the month, according to data released by the Gaming Inspection and Coordination Bureau on Monday (Apr 1). The result was higher than the median analyst estimate of a 49 per cent year-on-year increase. The month’s total was about 75 per cent of the pre-pandemic level in March 2019.

Macau’s post-Covid recovery path is slowing as China’s economic growth loses momentum. December was Macau’s best-performing month since the pandemic sapped tourism from the region, with gaming revenue reaching 81 per cent of 2019 levels. But those gains haven’t held, sinking to as low as 73 per cent of pre-Covid levels in February.

The end of March was boosted by the four-day Easter holiday in Hong Kong, the city a ferry ride away that provides Macau’s second-largest source of tourists (China provides the largest). The Ching Ming Festival in early April should give the gambling hub another boost because it’s a holiday in both Hong Kong and mainland China.

Macau reported 3.29 million visitor arrivals in February, which is 93 per cent of the 2019 level. The city will release data for March later this month.

Analysts had slashed their growth forecast for March from 53 to 49 per cent after the city reported lower-then-expected gaming revenue in February. Slowing growth came despite rising numbers of tourists, suggesting per person spending weakened amid deteriorating consumer sentiment.

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Most Macau casinos are seeing costs rise above 2019 levels, mostly stemming from investment in non-gaming activities, Morgan Stanley said in an earlier note. The companies are stepping up development of non-gaming events after Beijing cracked down on high-rolling gamblers and demanded the city shift into industries including leisure, tourism, Chinese medicine and finance.

Rising costs and slowing growth are likely to add pressure to casino operators’ profitability this year amid intensifying competition for premium bettors. BLOOMBERG