Macau’s Mass Market Segment on the Path to a Faster Recovery than VIP

Image by Nathan John
Article by : Helen Feb 1, 2021

The Macanese gambling regulator, the Gaming Inspection and Coordination Bureau, published the quarterly results for the final three months of 2020. They are in line with the Morgan Stanley projections that the mass-market segment will recover twice as fast as the VIP one.

VIP Baccarat didn’t even manage to bring in more revenues than mass-market baccarat in 2020: the former one pulled in MOP26.28 billion ($3.29 million), while the latter scored a bit more, MOP26.94 billion ($3.37 million) – an unprecedented flip that happened for the first time since 2015 (the earliest data available on the regulator’s website).

The reversal of roles happened mostly thanks to the last quarter of 2020. Mass-market baccarat revenues went up a whopping 530%, from MOP1.88 billion in 3Q2020 to MOP11.85 billion in the fourth quarter. At the same time, the VIP segment didn’t show such a skyrocketing trend: its revenues went up from MOP2.34 billion to MOP7.63 billion (although it’s still an impressive 226% quarter-on-quarter increase). These stats support Morgan Stanley’s projections that the VIP segment will recover only to 40% of 2019 levels, while the mass market is expected to bounce back to 80% of its revenues collected in the year before the pandemic.

Overall, 4Q2020 ended with far better results for the enclave’s casino industry than 2Q2020 and 3Q2020. Games of chance generated MOP21.84 billion (approximately $2.74 million) in gross revenues, which accounted for a third of Macau’s total gaming revenues in 2020 (MOP60.44 billion, or roughly $7.57 billion).

It is a significant rebound considering that the six months before 4Q2020 brought casino operators only MOP8.12 billion in revenues (roughly $1.02 million).

While the overall rebound trend is positive, Macau’s casino industry still has a long way to go to return to the 2019 levels of the gross gaming revenue (which amounted to MOP292.46 billion, or roughly $36.63 billion, in the year before the pandemic). Recent amendments in China’s Criminal Law regarding prosecuting overseas gambling are likely to be another blow for Macau’s casino industry. Passed at the end of December 2020, they introduce harsher penalties for those who organize overseas gambling activities for mainland Chinese nationals. The amendments will enter into force on March 1, 2021, and they have already made junket operators (businesses that facilitate VIP gamblers trips to locales where casino operations are legal) wary of the consequences.

For instance, Suncity Group is planning to “diversify its customer base from China to Korea,” as laid out in the Goldman Sachs Gaming & Conglomerates Corporate Day Takeaways published on the junket operator’s website. The company has also “started to contemplate diversifying away from its junket business model” and switching to their own IRs.

Suncity Group also closed its Parisian VIP rooms in Macau, as well as others in Australia and Korea, “in response to the soft [VIP] market conditions.” The Chinese New Year doesn’t seem to be catnip for VIP gamblers to come to Macau as the pre-booking levels remain “relatively light,” while the company’s VIP revenues bounced back to a mere 20% of the pre-pandemic levels in December 2020.

  1. Macau Vaccines Come Too Late To Save It From Another Bummer
  2. Tak Chun to Open Its VIP Gaming Club at Revamped Londoner Macau
  3. Macau Casinos’ January Revenues Are in Line with the Slow Rebound Expectations
  4. Macau’s December Hotel Occupancy at Its Highest Since January 2020
  5. The Londoner Macau Opens for Chinese New Year
  6. Sanford Bernstein Forecasts Macau Recovery In Late 2021, Rebound in 2022
  7. Four Macau Casino Operators Please Their Employees With Early Year Bonuses
  8. Macau Is Ready To Open Its Casinos And Is Positive On Increasing Tourist Arrivals
  9. Morgan Stanley Does Not Share Enthusiasm Over Macau’s GGR Recovery
  10. Macau Casino Industry to Continue Its Recovery in 2021, But It Might Take Years to Bounce Back
  11. Macau Poised to Post 80 Percent Revenue Reduction
  12. The Londoner Macau to Partly Open in February
  13. Macquarie: Macau Is Likely to Extend Existing Concessions Beyond Mid-2022
  14. Macau Government Expects a 71% Year-on-Year Drop in Gaming Tax Revenues in 2020
  15. When Macau Gets The Vaccine And How The Gaming Stocks Respond To This News
  16. Macau & Digital Yuan: Could It Be the Dawn of a New Era for Macanese Casinos?
  17. The Londoner Hotel in Macau May Start Welcoming Guests in February 2021
  18. With the Casino Industry in a Crisis Mode, Macau’s Gaming-Related Crime Is in Decline, Too
  19. Bernstein Research: Premium Mass Gamblers Could Be the Key to Macau’s Casino Industry Recovery
  20. Macau Legend Development Sold A Chunk Of Holdings To Tak Chun Group
  21. What Should Be Done Before New Macau Gambling Law Adoption
  22. Macau Is About To Focus On International Sports
  23. How Covid-19 Impacts Macau’s Revenues
  24. The Implications Of The American Choice On Macau
  25. Pandemic Forces Macau Gaming To Pivot Or Suffer
  26. Macau 2022 Tenders Raise Uncertainty As Former Advisors Chime On The Deadline
  27. Macau: SJM Holdings to Emerge As Market Leader Post-COVID
  28. Macau's The 13 Leaps Out Of The Frying-Pan Into The Fire
  29. Macau Faced Some Mixed Blessing: Casinos On, Revenue Off
  30. Unnerving Forecast: Macau And Singapore Expect Staff Cuts
  31. Macau Casino Unemployment Rate Rises Sharply
  32. Macau Casinos are Bleeding and Seeking Hopium as COVID-19 Takes Its Toll
  33. Macau SAR China

Helen

Chief Editor

SlotsUp - Free Slots Universe at FacebookSlotsUp slot games at PinterestSlotsUp at TwitterSlotsUp's Slot Games video reviews at Youtube