Macau casinos recovered in the first quarter of 2023, and on Monday reported a big profit rebound after Galaxy Entertainment officially lifted COVID-19 restrictions.
Return to the status of Invincible Casino Capital:
Macau has also once again become the world’s unbeaten casino capital, beating Las Vegas in gambling gross revenues after strict pandemic policies cut off access to customers.
In a related development, Hong Kong-listed Galaxy Entertainment said, “Net sales have recovered to more than half of pre-pandemic numbers. In addition to the Galaxy and Starworld casinos in Macau, it also holds a stake in rival Win Resorts and appears to be better adapted to its current environment with a focus on the mass market.”
“These results confirm that the Galaxy is our top choice in Macau gaming alongside Sands China,” JPMorgan’s DS Kim said on Monday, citing late Sheldon Adelson’s business in Las Vegas Sands. He also focused on casual players instead of high-end players.
Unexpected Recovery:
Following a crackdown on gambling in which major promoters who supplied VIP players who raised money were arrested, the comeback was a surprise to analysts. However, even the VIP sector is showing signs of a rebound.
In a related development, Ben Lee, casino analyst at IgamiX, said, “We all expected the VIP sector to slump considerably compared to the past, but the stronger-than-expected rebound surprised us all.” In addition, Galaxy’s earnings before interest, taxes, depreciation and amortization were higher than the consensus estimate of HK$1.7 billion. Net income was HK$7 billion, compared with HK$13 billion in the same quarter of 2019, before the pandemic.
In a related development, Kim said, “Galaxy reported HK$1.91 billion ($240 million) in EBITDA, meaning it recovered 48% compared to pre-COVID-19 levels. That’s in line with our peers’ average 46% recovery in the first quarter. The gains came from solid bulk performance.”
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