Macau Casinos Disappoint in June, Gaming Revenue Short of Analyst Expectations

Macau casinos reported on Monday gross gaming revenue of (GGR) 17.7 billion patacas (US$2.2 billion) for June 2024. The collective haul by the six casino operators represented a 16.4% year-over-year gain, but was .

The median analyst estimate for June was 1.1% higher than what was realized. The enclave s casinos were expected to see June GGR soften from May when the Golden Week holiday was held and millions of mainlanders ventured into the Chinese Special Administrative Region (SAR).

June has historically been a slow month for the casinos after the busy May Golden Week. However, the slowdown s failure to meet analyst expectations could hint that China s upper class, which kept Macau s casinos bustling for decades, is reining in leisure spending in an uncertain economy.

A decline in spending by Chinese visitors, wary of splashing out on big-ticket items due to economic uncertainty, contributed to the slowdown, Bloomberg reported.

Macau has been forced to rely more on the mass and premium-mass markets, the latter entailing visitors willing to spend thousands of dollars per trip, but not necessarily on the casino floor.

The $2.2 billion won by the Macau casinos remained almost 26% below the June 2019 mark when the same operators won $2.96 billion. June marked the lowest monthly tally so far in 2024.

Macau counted 2.7 million visitor arrivals in May, down 20% from . June s visitation numbers will be released later this month. The disappointing visitor counts are of utmost concern for the Macau casino industry, as the world s richest gaming hub continues to pivot away from the VIP to the general public.

The casinos hand was forced by Beijing and China President Xi Jinping, who instructed the Macau government to crack down on junket groups amid the COVID-19 pandemic. Macau s junket industry the travel organizers that kept Macau s high-roller rooms humming for many years is essentially nonexistent today.

Macau casinos in recent months began dolling out an array of freebies to . Such incentives include free snacks and drinks, something that was only afforded to high rollers before the pandemic.

The Macau SAR Government recently told the casinos to scale back the handouts. The government s decision came as a result of nearby small businesses expressing frustration that their foot traffic had suffered as a result of the casino giveaways.

China is the world s largest manufacturing economy and exporter of goods, but the sector in June remained under contraction for a second consecutive month.

China s Manufacturing Purchasing Managers Index remained below 50 points at 49.5. Index ratings below 50 points suggest contraction while an index above 50 suggests manufacturing growth.

One factor weighing on exports may be the marked turn in consumer sentiment and spending in the US, still China s largest export market, in recent months. US consumer sentiment dipped to its lowest level since last November in May, according to a long-running survey from the University of Michigan, The Wall Street Journal reported.

China s real estate sector has also slowed, as has the service industry.