A series of high-profile concerts held at some of Macau’s largest integrated resorts is playing a significant role in the city’s post-COVID recovery and helping “move the needle” in the mass market gaming sector, according to investment bank JP Morgan.
Detailing the findings of their weekly Macau channel-check in a Monday note, analysts DS Kim and Mufan Shi said that gross gaming revenues for the first 18 days of June had reached MOP$9.5 billion (US$1.18 billion) at a run-rate of MOP$527 million (US$65 million) per day. This, they explained, suggested the daily run-rate over the past seven days had risen from MOP$530 million (US$66 million) in the week prior to MOP$570 million (US$71 million) – making amends for a slower than expected start to the month.
But they also said one of the main drivers of this recovery appeared to be a series of live concerts held in the city in recent months, including the short-term residency of Cantopop legend Jacky Cheung at The Venetian Macao’s Cotai Arena, and concerts by K-pop group BLACKPINK at Galaxy Arena and Hong Kong performer Leon Lai at Studio City.
The Jacky Cheung residency in particular “continues to attract the right type of (high-value) players, including those from the database of Sands’ sister property MBS, which in turn helps to lift overall industry GGR,” the analysts said.
“These entertainment events do seem to move the needle for gaming business in Macau – at least thus far – which bodes well for Macau’s mass business to recover (well) beyond pre-COVID levels, in our view.”
The Macau SAR Government has identified economic diversification and a focus on more non-gaming attractions as key to the city’s long-term sustainable development, with the six concessionaires having committed to spend a combined MOP$108.7 billion (US$13.6 billion) over the next 10 years on developing foreign source markets and non-gaming projects.
Macau has also witnessed a clear shift in its market dynamics since the easing of border restrictions in January, with the collapse of the VIP junket industry paving the way for mass and premium mass to become the dominant sectors.
Macau’s GGR has risen every month since then, and JP Morgan anticipates another impressive result in June.
“The month-to-date trends suggest our June GGR forecast of MOP$14 billion to MOP$14.5 billion (US$1.74 billion to US$1.8 billion), or MOP$470 million to MOP$480 million (US$58 million to US$60 million) per day, may prove too conservative, and we wouldn’t be surprised if June bucks the weak seasonality to print better than MOP$500 million (US$62 million) per day,” Kim and Shi wrote.
“This also means casinos will see strong 2Q results that should continue to beat consensus, with mass GGR and EBITDA recovering over 80%+ and 65%+ of pre-COVID levels.”
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