Macau to reach 95% of pre-pandemic levels in 2024 – JP Morgan

DS Kim, an analyst with JP Morgan, says Macau will start to see a market recovery as early as the first few months of 2023.

Macau.- DS Kim, an analyst with JP Morgan, has predicted that Macau’s gaming industry could reach 95 per cent of pre-pandemic levels in two years’ time. Kim says the recovery will be driven by pent-up demand from an expanding mass market.

DS Kim cited two reasons for the optimistic outlook: Macau’s policy allowing the government to lower taxes by up to 5 percentage points for operators that attract more foreign tourists and an increase in the market-wide cap on gaming tables to 6,000 from January (around 4,000 tables were directly operated by casinos in 2019).

The government has set the minimum annual gaming revenue expected from each gaming table at MOP7m (US$875,000), and the minimum from each machine at MOP300,000. Machine numbers are limited to 12,000.

Kim forecast that EBITDA will start to recover in the first quarter of 2023 as mass market demand returns to around 35 per cent of pre-Covid levels, before hitting around 50 per cent over the next two quarters. Normal ass demand will not fully return until 2024.

Macau’s GGR for the first eleven months of 2022 combined stands at MOP38.7bn, down 50.9 per cent year-on-year.

Vote on Macau junket bill to take place on December 15

 The Legislative Assembly is expected to vote on Macau’s new junket law on December 15. The bill would allow junket operators to each work with only one casino operator. Individuals will no longer be licensed as intermediaries; only companies incorporated in Macau. 

All junket applications will be decided by the Minister of Commerce and Finance rather than the gaming regulator, the DICJ. Junket operators and agents must open accounts with gaming franchises to deposit cash and chips related to gaming. The funds must be owned by an intermediary or agent.

Another proposed licensing condition is that junkets must hold MOP10m (US$1.24m) in share capital in addition to a bank guarantee.