Casinos in Macau Continue to See Sporadic Results

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Macau casinos won $844 million from gamblers last month. This is a 0.01% increase over November 2020, but an improvement of 55% over October. However, with Suncity Group announcing it’s shutting down operations, the revenue could see another big drop.

Macau Casinos Continue Along Uncertain Path

The six Macau-licensed commercial casino operators enjoyed their best month of gaming since July. Their November 2021 gross gaming revenue (GGR) total is still down 70.5% compared to the pre-pandemic November 2019. Those were the times when gaming venues collectively won more than $2.85 trillion.

Analyst expectations were met in large part for November 2021. Macau and mainland China lifted 14-day quarantine restrictions on travelers who travel between the two countries. This resulted in an increase in GGR.

The total 2021 GGR in Macau is $9.83 billion after 11 months. This is 50% more than 2020, but $23.8 billion less than what the casinos won in the first month of 2019.

Macau Casinos Likely to See Massive Regulatory Changes

Six casino giants in Macau will see their operating rights expire next June. In an effort to improve the regulation of gaming and the flow capital from the mainland through gaming floors, the gaming hub is currently reviewing all aspects of its gaming activity.

After years of being silent about potential changes, it has been revealed that local and continental authorities are now heavily monitoring and targeting junket groups. Alvin Chau, the face and head of VIP junket, was arrested last Wednesday on suspicion of running illegal gambling businesses throughout China. Later, Macau casinos confirmed that they would be closing their VIP gaming areas that were

Chau’s Suncity isn’t the only junket operator that has been subject to a probe in Macau. GGRAsia reports today that mainland prosecutors have conducted operational investigations into several other prominent junket organizations since last year. Three such gaming promoters have been reportedly scrutinized: Guangdong Club, Meg Star, and Tak Chun.

The Junkets that helped Macau grow from a small gambling market under Stanley Ho, to a global gaming hub worth $45 billion in 2013, has been a target of China President Xi Jinping for the past five years. Xi believes that the People’s Republic is at risk from the large-scale movement of money from the mainland through casinos.

Casino Stocks In Trouble

The value of Macau’s publicly traded casinos stocks has plummeted since Chau was detained. The shares of Las Vegas Sands have fallen 9%, MGM Resorts lost 3%, Wynn Resorts dropped 11%, Galaxy Entertainment 8.2%, Melco Resorts more than 12%, and SJM Resorts 5%.

Analysts are predicting a bearish future for the Chinese gaming hub, given ongoing COVID-19 issues and the recent crackdown on Chau and Suncity. It’s not surprising, considering that junket groups brought about 70% of Macau’s VIP traffic to the region before the pandemic.

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