Macau Casinos Claw Back Pandemic Losses

In gambling, the house always wins. Except maybe during a pandemic.

Fortunately for Macau, an island city and a special autonomous region of China, the motherland’s staunch zero-covid policies are finally over. With one-quarter of post-pandemic life in the books, it’s clear the so-called “Las Vegas of Asia” is bouncing back in a big bad way.

What Happens in Macau…

Back in pre-pandemic times, Macau held the title of the gambling capital of the world. Yes, even bigger than Las Vegas in terms of gross gambling revenue. But while the shimmering strip in the Nevada desert more or less applied its “play at your own risk” betting ethos to the upper-respiratory illnesses, Macau languished at the whims of Beijing’s stringent health codes. It’s been especially hurt by Beijing’s travel restrictions — because what happens in Macau stays in Macau, but first you have to get there.

But with those restrictions now largely lifted, Macau casinos are on a hot streak:

• MGM China reported around $613 million in net revenue in its first quarter, or roughly 84% of revenue in the same period in 2019, after plummeting to around just 30% of pre-pandemic levels in 2021.
• Galaxy Entertainment, which owns and operates two casinos on the island, saw its gross gaming revenues jump nearly 80% year-over-year in the quarter, beating most analysts’ expectations. Sands China, which sold the Las Vegas Sands in 2021, saw net revenue jump 132% year-over-year in Q1 to roughly $1.27 billion.

Bad Beat: In fact, of the six major operators in the gambling mecca, only SJM holdings posted disappointing results to start the year. “It’s the only Macau earnings this quarter that’s not a strong beat,” JPMorgan analyst DS Kim told the Financial Times. “[But] it is still reassuring that even SJM … has seen demand ramping up month after month.” In other words, it may be time to look at futures bets for Macau.