Macau casino revenue rebounds in February, but concerns over full recovery persist

Macau's casino industry experienced a resurgence in February, generating a gross gaming revenue (GGR) of 19.74 billion patacas (US$2.47 billion), according to the latest figures from the Gaming Inspection and Coordination Bureau (DICJ).

The month's revenue marked an 8% increase compared to January's 18.25 billion patacas (US$2.26 billion) and a 6.8% rise from the same period last year, when GGR totaled 18.48 billion patacas (US$2.31 billion). The strong performance in February brought an end to a two-month decline in year-on-year GGR figures. The downturn began in December 2024, when casino earnings fell by 2% to 18.2 billion patacas (US$2.27 billion).

Analysts attributed this dip to the strict security measures during Chinese President Xi Jinping's visit to Macau for handover celebrations. The decline continued into January 2025, with GGR slipping 5.6% year-on-year, despite a slight 0.27% month-over-month increase.

February's revenue boost was largely driven by the Chinese New Year holiday, which ran from January 28 to February 4, including a lucrative weekend. The surge helped push Macau's GGR for the first two months of 2025 to 0.5% ahead of 2024 levels, providing some relief to the six licensed gaming operators: Sands, Galaxy, Wynn, MGM, Melco, and SJM.

Despite this rebound, Macau's gaming industry still faces challenges in reaching pre-pandemic levels. The US$2.47 billion GGR for February 2025 represented just 78% of the market's performance in February 2019, highlighting the gap left by the decline in VIP gamblers and the shift towards a more regulated and family-friendly tourism model.

Macau's transformation over the past six years has been significantly influenced by Beijing's tightened regulations. Under President Xi Jinping's direction, Macau increased scrutiny on junket groups, which had historically catered to high-rolling mainland Chinese gamblers. With stricter financial monitoring and regulatory constraints, many of these junket operators have left Macau for more favorable markets in Asia.

To adapt, the six casino operators have invested billions in diversifying their offerings, adding family-friendly attractions, non-gaming amenities, and cultural events. However, analysts remain skeptical about whether these changes will attract enough premium mass market visitors to offset the decline in VIP revenue.

Brokerages, including CreditSights and Citigroup, have adjusted their 2025 GGR growth forecasts downward. Citigroup, in particular, revised its growth estimate from 7% to 3%, predicting a total GGR of approximately MOP233.58 billion (US$29.2 billion) for the year, just 80% of 2019 levels.

The evolving regulatory environment in Macau has prompted some casino giants to explore new markets. Thailand, expected to legalize five casino resorts this year in Bangkok, Pattaya, Phuket, and Chiang Mai, has drawn interest from major operators including Sands, Wynn, MGM, and Melco.

Sands President and CFO Patrick Dumont described Thailand as an "unbelievable tourism destination," stating the potential appeal of a market less restricted by the regulatory challenges faced in Macau.