Macau operators achieved record mass gaming revenues in 4Q23

What you missed over the holidays: everything you need to know to catch up

Newsdesk - Mon 1 Jan 2024 at 17:34
www.asgam.com/index.php/2024/01/01/what-you-missed-over-the-holidays-everything-you-need-to-know-to-catch-up/

The presents have been gifted, the New Year rung-in and the Inside Asian Gaming staff refreshed after what was a truly massive 2023 for the Asian – and global – gaming industries. The team at IAG traditionally takes a well-deserved two-week break each year in the second half of December, and in 2023 we broke up on 15 December before returning tomorrow morning, Tuesday 2 January 2024!

Most of the time, this two-week period is a relatively quiet time for our industry, although there is inevitably some news to report from time to time.

So, what happened between 16 December and 1 January? Here’s everything you need to know:

Macau’s MOP$180 billion “trigger event”

Macau Chief Executive Ho Iat Seng said on 20 December that gross gaming revenues for FY23 were likely to reach MOP$180 billion, having stated the target was unlikely just a month earlier in November.

As previously reported by Inside Asian Gaming, this represented a key “trigger event” for the industry with all six concessionaires having in December 2022 agreed to invest an additional 20% annually into non-gaming developments should annual GGR reach the MOP$180 billion milestone.

Under their original 10-year concessions, running from 1 January 2023 to 31 December 2032, the concessionaires had agreed to invest the following in non-gaming initiatives:

GEG: MOP$27.45 billion

Melco: MOP$10.008 billion

MGM: MOP$15 billion

Sands: MOP$27.8 billion

SJM: MOP$12 billion

Wynn: MOP$16.5 billion

Total: MOP$108.8 billion (US$13.6 billion)

With GGR for the first 11 months of the year having reached MOP$164.5 billion, all eyes were on the December tally to see if it would top MOP$15.5 billion and trigger the additional mandatory investment. And indeed this proved to be the case with December becoming Macau’s second biggest month of the year with GGR at MOP$18.6 billion and taking FY23 GGR to MOP$183.1 billion.

A great recovery for Macau’s casino operators in 2023 but perhaps MOP$179.9 billion might have been better!

R&F Korea

Towards the end of 2023 the promotor of a stalled integrated resort development in Incheon, South Korea, was reportedly preparing another request to postpone the deadline for completion, this time reportedly to March 2025.

R&F Korea, whose project will, if completed, become Incheon’s third IR after Paradise City and the recently launched Mohegan Inspire, has been granted four previous extensions to the opening deadline but has yet to resume construction post-pandemic.

Originally scheduled to open in 2018, the project was previously controlled by US casino giant Caesars Entertainment before the company sold its stake in February 2021. Caesars CEO Tom Reeg famously said at the time that his company had “sold it for some barbecue pork” in a moment of shockingly poor judgement.

Time will tell whether R&F Korea can find the funding and motivation it needs to finally push forward with the stalled development.

Solaire North opening in March 2024

Philippines media outlet Philippine Star reported Bloomberry Resorts Corp Chairman and CEO Enrique K Razon Jr as confirming its second Manila integrated resort, Solaire Resort North in Quezon City, will open in March 2024.

Razon, who opened Philippines market leader Solaire Resort Entertainment City in 2013, also explained that the property would undergo a test run before welcoming its first guests.

Razon had previously flagged March 2024 as the opening month some time ago, so the real news here is not so much the opening month, but that he confirmed it once again in December.

Solaire Resort North is slated to feature 13,150 square meters of gaming space plus 11 specially curated restaurants and bars, MICE space, an outdoor Olympic size swimming pool, a gym, spa and children’s play area, among others.

An artist’s impression of Solaire Resort North.

Tabcorp’s Victorian victory

Australian racing and wagering giant Tabcorp has been awarded the new 20-year Victorian wagering and betting license, beating out competition from corporate bookmakers.

The new license, commencing from August 2024, also provides for what Tabcorp describes as a “level playing field” by removing the current joint venture arrangement with the Victorian racing industry and associated funding obligations, with Tabcorp to pay wagering taxes and racing and sports product fees on the same basis as other wagering operators.

Had the new license conditions existed under the arrangement in place for 2023, the company’s FY23 Group EBITDA would have been AU$140 million (US$95 million) better off, Tabcorp explained.

Aside from a restructured funding agreement, the license is significant in that it leaves Tabcorp as the sole provider of retail betting agencies across the state.

I can imagine there being some difference in these nos., but I consider them rather big.

And just like a progressive tax system, the more you make the more government will take.

And now this...

GAMING OPS TO INCREASE INVESTMENTS AS CASINO REVENUES HIT MOP183B IN 2023
LYNZY VALLES, MDT MONDAY, JANUARY 1, 2024 - 1 DAY AGO NO COMMENTS 1,258 VIEWS
macaudailytimes.com.mo/gaming-ops-to-increase-investments-as-casino-revenues-hit-mop183b.html

Macau’s casino revenues hit MOP183.06 billion for the whole year of 2023.

Data from the Gaming Inspection and Coordination Bureau shows that gross gaming revenues in December reached MOP18.6 billion.

The result was better than the median analyst estimate of a 402% year-on-year increase, and has returned to 81.3% of 2019 levels.

Analysts from JP Morgan analysts observed that last month’s earnings was the first time it reached 80% of pre-Covid levels.

The 2023 earnings have also exceeded the Chief Executive’s expectations of MOP180 billion, which is MOP50 billion more than it expected earlier last year.

The six gaming concessionaires are required to pledged an additional 20% in their gaming investment, as stipulated in their contracts with the government.

Following winning licenses to operate late 2022, and under the city’s biggest gaming law overhaul, the six casino operators agreed to invest a total of MOP118.8 billion after being granted 10-year operating licenses, with the bulk of the money pledged to non-gaming projects.

In October last year, Fitch Ratings expected that full-year gaming revenue has been further to almost 80% of its 2019 level.

Tourist arrivals at 28 million

Macau recorded 28.23 million visitor arrivals last year – 70% of pre-pandemic levels.

Data from the Macau Government Tourism Office (MGTO) shows that the 77,000 daily average was up about 395% compared to 2022.

Meanwhile, on New Year’s Eve, Macau recorded a new post-pandemic record as arrival hit 175,030.

Correct, but that is not the point I am trying to make.
Why does Sands need to invest MOP$27.8 billion while Melco can get away with "just" MOP$10b?

I’m assuming it’s on per size that why Sands and Galaxy have to spend the most.