Macau casinos posted a 2% decrease in revenue in December. The dip has been linked to a three-day visit by Chinese president Xi Jinping.
In his first trip to the gaming hub since 2019, Xi marked the 25th anniversary of Macau’s handover from Portugal to China.
He also presided over the inauguration of Sam Hou Fai. On 20 December, the former appeals court judge succeeded Ho Iat-Seng as the city’s new chief executive.
Xi visit kept VIPs at bay
Gross gaming revenue (GGR) for December was MOP18.2 billion (£1.843 billion/€2.224 billion/$2.3 billion), according to figures from the Gaming Inspection and Coordination Bureau (DICJ).
That’s 2% short of the median analyst estimate for the month and 20% lower than 2019, pre-pandemic, when GGR peaked at MOP292.5 billion. Notably, December was the only month last year to fall short of projections.
Industry observers attributed the dip to tighter security around Xi’s 18-20 December visit. His presence also may have dampened enthusiasm among mainland high rollers, a frequent target of Beijing’s war on corruption, illegal gambling and capital flight.
Total GGR for the year reached MOP226.8 billion, up 23.9% from 2023.
Xi, Sam push “diversified development”
During his visit, Xi urged Macau “to promote appropriate economic diversification”, with a goal of ending its dependence on the gaming industry. He said the special administrative region (SAR) must “cultivate internationally competitive new sectors”.
Sam concurred. In his inaugural address, the new CE pledged to pursue the economic strategy introduced under Ho Iat-Seng. Known as the ‘1+4’ model, it is meant to underpin the leisure and tourism sector through the development of four new industries: medicine, technology, finance and MICE (meetings, incentives, conferences and events).
As part of their licence agreements, the city’s Big Six casino operators must invest a collective MOP130 billion in non-gaming amenities such as cultural attractions, theme parks and concert arenas through 2032.
“Solid recovery” in store
Despite the drop in December GGR, JP Morgan Securities is upbeat about Macau’s prospects heading into the new year.
“We didn’t have to change our forecasts despite well-documented consumption and macro headwinds,” analysts wrote, as reported by Macau Business. “Macau demand has been (surprisingly) in line thanks to a solid recovery in visitation and thus also in grind/base mass.”
Goldman Sachs foresees an 8% rise in GGR for 2025. The local government has forecast total GGR of MOP240 billion, up 5.8% year-on-year.
Davis Fong Ka Chio, of the Institute for the Study of Commercial Gaming at Macau University, is even more optimistic. Last week, he told public broadcaster TDM that GGR could jump 10% to MOP250 billion this year, spurred by mass gaming and the ongoing tourism recovery.
