HONG KONG Reuters-Macau posted a 82.5% increase in gambling revenue to 11.6 billion patacas $1.4 billion in January, after the world's biggest gambling hub had nearly half a million visitors over the week-long Lunar New Year holiday.
The biggest crowds in more than three years, but January's revenue was still less than half of the Lunar New Year period in 2019 prior to the COVID- 19 outbreak, according to data released by Macau's government on Wednesday.
The shares in Macao casinos went up between 3% and 5%, while executives and analysts said it was an encouraging sign of a solid recovery to come.
Since January 8th, Macau has seen a rebound in tourism from the mainland, Hong Kong and Taiwan, after the territory has dropped all COVID 19 testing requirements for inbound travelers from mainland, Hong Kong and Taiwan.
Hundreds of thousands of tourists poured into Macau's casinos and picturesque cobbled streets over the Lunar New Year holiday from Jan. 21, a stark contrast to the lack of visitors into the former Portuguese colony since 2020.
Macau is the only place in the country where gambling in casinos is legal. It had closely followed China's zero-COVID strategy since 2019 and reopened alongside the mainland.
In January, the revenues for Sands China, Wynn Macau, MGM China, Galaxy Entertainment, MGM China and SJM Holdings were the first to be made under new 10 year contracts.
The casinos had launched under 20 year contracts in 2002, raking in billions of dollars and turning a sleepy fishing village into a glitzy boomtown.
The contracts, with more government oversight and control, were struck after COVID 19 restrictions decimated Macau's gambling revenues and sent net debt spiralling. In 2022, the industry had its worst revenue performance on record.
The city's once lucrative VIP industry has collapsed after several arrests in Macau's junket industry. On Jan. 18 a Macau court sentenced Alvin Chau, one of the city's most well-known figures, to 18 years in prison.
Casinos have committed to investing a total of $15 billion in the next decade, of which 90% must be spent on developing non-gaming plans that include an indoor waterpark, health and wellness centres, art exhibitions and a large garden attraction by Sands, similar to Singapore's Gardens by the Bay.
The stakes are high as to whether they can deliver on a government mandate to increase non-gaming revenues to more than 30% versus the total versus an average of 5% pre-COVID.
Nearly 50% of revenues are non-gaming in Las Vegas.
Since the lifting of COVID restrictions, the company is seeing a very strong recovery in Macau, said Rob Goldstein, chairman and chief executive of Las Vegas Sands, majority owner of Sands China.
He said last week that we're just thrilled to be open and making money and seeing demand like we're seeing.
As resorts and retail stores rush to increase staff to keep up with demand, labour shortages are becoming apparent, and a Sands executive said it was not operating some hotels at full capacity as a result.