{"id":286527,"date":"2023-08-23T15:31:52","date_gmt":"2023-08-23T20:31:52","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=286527"},"modified":"2023-08-24T11:21:52","modified_gmt":"2023-08-24T16:21:52","slug":"china-economic-issues-not-pinching-macau","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/china-economic-issues-not-pinching-macau\/","title":{"rendered":"China Economic Woes Not Yet Weighing on Macau"},"content":{"rendered":"

Macau\u2019s six casino operators are forecast to notch in aggregate third-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) at 80% of the levels seen before the onset of the coronavirus pandemic, according to Morgan Stanley.<\/p>\n

\"MGM
MGM Cotai in Macau. The operator is pacing the region’s gross gaming revenue recovery. (Image: YouTube)<\/figcaption><\/figure>\n

That could be a sign that China\u2019s proliferating macroeconomic headwinds<\/a> aren\u2019t yet weighing on the special administrative region\u2019s (SAR) gaming industry. While the bank forecasts the six concessionaires will reach 80% of pre-COVID EBITDA levels in the current quarter, it projects MGM China will be the stalwart, as that operator ascends to 120% of pre-pandemic EBITDA highs.<\/p>\n

MGM China has more tables, redesigned casino floors, adding F&B (including bubble tea) on the floor, removing walkway at the casino floor, use of RFID chips, creative marketing programs, and personalized experiences rendered,\u201d<\/strong> noted the Morgan Stanley analysts. \u201cPeers are acknowledging the lead, and hoping to pick up a trick or two.\u201d<\/strong><\/p><\/blockquote>\n

MGM China operates two integrated resorts in Macau, and is 56% owned<\/a> by MGM Resorts International (NYSE: MGM).<\/p>\n

Premium Customers Supporting Macau Casinos<\/h2>\n

The six Macau concessionaires<\/a> are Galaxy Entertainment, Melco Resorts & Entertainment (NASDAQ: MLCO), MGM China, Sands China, SJM Holdings, and Wynn Macau. In previous eras of vibrancy for the gaming enclave, VIPs drove gross gaming revenue (GGR).<\/p>\n

\n

This year, data suggests it’s premium mass customers — the segment in between mass-market players and whales — that are doing the heavy lifting, while there are modest signs high rollers are starting to return. Those are positives for Macau operators, because mass-market players are more economically sensitive and likely to reduce spending if the mainland economy weakens.<\/p>\n<\/div>\n

\u201cThis is why the [Macau] recovery is premium-led (and grind mass has lagged),\u201d added Morgan Stanley. \u201cYounger patrons are visible on casino floors, as well as around the resorts. High-end customers are spending as much or even more than pre-COVID levels.\u201d<\/p>\n

That\u2019s a plus for operators, such as Sands China, with significant retail space leased to luxury brands.<\/p>\n

\u201cThey claim that similar to luxury sales in China, the top 1 percent of mainland Chinese are traveling and spending on entertainment,\u201d the Morgan Stanley analysts observed.<\/p>\n

China Economy Not Pinching VIPs<\/h2>\n

While the return of high rollers to Macau has been incremental, there are signs it\u2019s gaining pace in recent weeks. The advantage for concessionaires is that while these bettors are smaller in number, their average bet is around $13K per hand, and they\u2019re not as economically sensitive as their mass-market counterparts.<\/p>\n

The VIP cohort’s resilience and increased visitation is likely one reason why Macau topped Las Vegas in GGR terms in the first half of this year<\/a>, regaining its crown as the world\u2019s top casino center.<\/strong><\/p>\n

Morgan Stanley added that house direct VIP service is \u201calready above 2019 levels, and thus incremental VIP revenue should come from casual junkets.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Macau\u2019s six casino operators are forecast to notch in aggregate third-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) at 80% of the levels seen before the onset of the coronavirus pandemic, according to Morgan Stanley. That could be a sign that China\u2019s proliferating macroeconomic headwinds aren\u2019t yet weighing on the special administrative region\u2019s (SAR) […]<\/p>\n","protected":false},"author":46,"featured_media":264480,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,81881,10],"tags":[81913,81007,81903],"acf":[],"yoast_head":"\nChina Economic Issues Not Pinching Macau<\/title>\n<meta name=\"description\" content=\"Macau gaming industry holding up well in face of China's slumping economy.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/china-economic-issues-not-pinching-macau\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China Economic Issues Not Pinching Macau\" \/>\n<meta property=\"og:description\" content=\"Macau gaming industry holding up well in face of China's slumping economy.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/china-economic-issues-not-pinching-macau\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2023-08-23T20:31:52+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-24T16:21:52+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/mgmc2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/china-economic-issues-not-pinching-macau\/\",\"url\":\"https:\/\/www.casino.org\/news\/china-economic-issues-not-pinching-macau\/\",\"name\":\"China Economic Issues Not Pinching Macau\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/china-economic-issues-not-pinching-macau\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/china-economic-issues-not-pinching-macau\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/mgmc2.jpg\",\"datePublished\":\"2023-08-23T20:31:52+00:00\",\"dateModified\":\"2023-08-24T16:21:52+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Macau gaming industry holding up well in face of China's slumping economy.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/china-economic-issues-not-pinching-macau\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/china-economic-issues-not-pinching-macau\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/china-economic-issues-not-pinching-macau\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/mgmc2.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/mgmc2.jpg\",\"width\":1280,\"height\":720,\"caption\":\"MGM Cotai in Macau. 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