Macau Casinos Win $5.25B in 2022, Enclave Hopeful for 2023 Recovery
Posted on: January 2, 2023, 10:02h.
Last updated on: January 2, 2023, 04:33h.
Macau casinos won MOP42.2 billion — roughly US$5.25 billion — in 2022. The six commercial gaming operators saw their gaming income cut by more than half from the prior year, as the casinos won about $10.8 billion in 2021.
Macau’s Gaming Inspection and Coordination Bureau revealed that full-year gross gaming revenue (GGR) for the Chinese enclave’s six gaming firms retracted in 2022. That was primarily because of China President Xi Jinping’s maintenance of his controversial “zero-COVID” policy that kept normal life on hold throughout much of the year.
“Zero-COVID” initiated drastic response measures in the wake of new COVID-19 outbreaks. During 2022, Chinese people were perpetually subjected to rolling lockdowns and travel restrictions.
Since the mainland has historically accounted for the most visitors to Macau, “zero-COVID” greatly hurt visitation in 2022. Macau, a Special Administrative Region of China that runs its own semi-autonomous government under Beijing’s “one country, two systems,” policy principle, sought to uphold Xi’s “zero-COVID” mission throughout the year.
Though China maintained “zero-COVID” in 2021, 2022 saw a major outbreak in the People’s Republic that began in early March and lingered until June. Another, more severe outbreak began this past fall, which initiated “zero-COVID” lockdowns in major cities that led to widespread protests and ultimately Xi’s “zero-COVID” change of heart.
But for Macau casinos, the damage was done. The 2022 full-year GGR of just $5.25 billion represents an 86% decline from 2019, when the same six gaming companies won more than $36.4 billion.
Mainland Major Market
No place is more important to Macau’s gaming industry than mainland China. The country’s millionaires and billionaires are most responsible for keeping the region’s high roller rooms humming. China’s extensive public traditionally accounts for the bulk of Macau’s mass market gaming industry.
Though 2022 was a setback from 2021 when the casinos won 51% more money from gamblers, there are plenty of reasons for optimism about the Macau casino industry.
Along with Xi ending “zero-COVID,” Macau casinos recently secured fresh gaming concessions that will allow the six firms to continue operating games of fortune in the Chinese SAR through at least Dec. 31, 2033. The companies’ previous concessions expired at midnight on Jan. 1.
In exchange for the 10-year licenses, Macau’s six casino operators have been instructed to invest heavily in nongaming projects. The six firms must spend at minimum $13.5 billion over the life of the permits on developments unrelated to gaming.
Xi has repeatedly encouraged Macau to diversify its economy away from gaming. Macau’s local government is appeasing that wish through gaming relicensing.
Investing another $13.5 billion in the land-strapped enclave is no easy task. But the licensees are getting creative in how they plan to go about investing in nongaming resort attractions.
Melco Resorts, for instance, plans to reutilize some of its square footage to construct a year-round indoor waterpark. Wynn Macau is prepping plans to overhaul some of its property to create a “world-class” concert and theater space.
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