Macau's major gambling operators, MGM China and Melco, are showing signs of recovery.
In the wake of the 2020 pandemic, the gambling haven of Macau took a significant hit, losing a chunk of investors and revenue. But fear not, as the world's biggest gambling destination didn't go down without a fight. MGM China is playing a pivotal role in Macau's resurgence, spearheading the city's recovery from the financial drought it experienced.
A Stellar Comeback for MGM China and Melco Resorts
Just a few years ago, Macau ruled the international gambling market, churning out six times the gambling revenue of Las Vegas in 2019. However, the 2020 lockdown sent shockwaves across the city, causing a dip in revenue for casino operations and shockingly, Las Vegas surpassed Macau as the largest gambling hub. But as the tides have turned, Macau is shedding its pandemic skullduggery, largely due to the efforts of two casino operators.
MGM China and Melco Resorts, the Chinese branch of the gambling behemoth and the business run by Chinese businessman and casino tycoon, Lawrence Ho respectively, have bounced back remarkably this year. Despite lackluster earnings in 2022, both companies have shown impressive recovery, with MGM China's shares escalating by a whopping 114% and Melco Resorts' shares surging by 144%. Melco International, Melco Resorts' parent company, also experienced a boost in shares by 81%.
It's only natural that Macau would show signs of revitalization, given the predictions of an overall gross gaming revenue increase by the end of the year made by a JPMorgan gaming sector analyst, DS Kim. Kim highlighted MGM China's 16% gross revenue in January as "significantly ahead of the 9% to 10% levels back in 2019." Kim further stated that the demand for the market was significantly under-appreciated.
However, the pandemic left calling cards in its wake. In a recent interview, Lawrence Ho conveyed that "The number one objective of the company for the next two to three years is to really deliver and pay down debt." Melco Resorts racked up a debt totaling more than $8 billion by the end of 2022, nearly doubling their 2019 debt of $4.4 billion.
Looking Ahead
With its economic resurgence, it seems that Macau is regaining its former brilliance. MGM China and Melco Resorts continue to stand as the primary drivers of Macau's recovery. And while it's not all sunshine and roses – with Melco Resorts still wrestling with a hefty debt – the city is making strides towards its former glory.
- Amidst the economic downturn in Macau due to the 2020 pandemic, MGM China is playing a crucial role in the city's resurgence, spearheading its recovery from the financial drought.
- Despite a dip in earnings in 2022, MGM China and Melco Resorts, the Chinese branch of the gambling behemoth and the business run by Lawrence Ho respectively, have shown impressive recovery, with MGM China's shares escalating by 114% and Melco Resorts' shares surging by 144%.
- The city of Macau, once known for its casino-and-gambling culture, is shedding its pandemic skullduggery, largely due to the combined efforts of these casino operators.
- In light of the predictions of an overall gross gaming revenue increase by the end of the year made by a JPMorgan gaming sector analyst, it's evident that Macau's casino-games industry is on the path towards rejuvenation.
- As Macau's casinos, led by MGM China and Melco Resorts, continue their recovery, the city's casino-culture, greatly influenced by personalities like Lawrence Ho, is beginning to regain its former brilliance, despite the lingering challenges posed by pandemic-related debt.
