Macau casino recovery slows in 2024 due to decline in junket promoters

Macau's casino market recovery has slowed in 2024, partly due to a decrease in the number of junket promoters, according to CreditSights under Fitch Group. The financial researcher anticipates “flattening trends” for the rest of the year as the gaming recovery matures.

Data from Macau's gaming regulator shows that last year’s gross gaming revenue (GGR) recovered to 63% of the pre-pandemic 2019 level. The recovery continued into 2024 but at a reduced speed, reaching 77% of the 2019 level in the second quarter, up slightly from 75% in the previous quarter, Macau Business reported.

“We attribute this to the near extinction of junket-promoters which has meaningfully impacted the recovery for VIP GGR,” analyst David Bussey wrote in a recent note.

Macau authorities have maintained a cap of 50 junket companies for 2025, unchanged from this year. However, as of June, only 22 are registered with the gaming regulator.

Visitation is also slowing, with year-to-date figures up to May tracking at 82% of 2019 levels. From April to May, visitation reached 79% of 2019 levels, down from 86% in the first quarter.

CreditSights analysis indicates that baccarat games are the largest contributor to GGR, accounting for about 85% of the total. In the first quarter of 2024, mass baccarat revenue reached 116% of 2019 levels, while VIP baccarat revenue was only at 39%.

“While the loss of junkets will likely hinder a full recovery to pre-pandemic GGR (at least in the near-to-medium term), it has benefited margins. For junket-sourced VIP players, casino operators pay a commission to the junkets in addition to covering the operating costs for VIP rooms (labor, utility, etc.). This has historically made mass-market players a higher-margin demographic,” Bussey was quoted as saying in the report.

Despite the reduced number of high-stake rollers, spending per visitor has consistently rebounded. In 2023, GGR per visitor was approximately $805, about 88% of the 2019 level of USD 920. The year-to-date figure up to May is around $841, marking a 93% recovery compared to 2019.