Macau casino groups have enjoyed a rebound in the first quarter, with Galaxy Entertainment on Monday becoming the latest to report a big recovery in revenues after the lifting of Covid-19 restrictions. The Chinese territory regained its long-held status as the world’s casino capital in the first quarter when it overtook Las Vegas in terms of gross gambling revenue, having fallen behind after strict pandemic policies shut the territory off from its customers. Hong Kong-listed Galaxy Entertainment said net revenue had recovered to more than half its pre-pandemic figures. Apart from its Galaxy and StarWorld casinos on Macau, the group has a shareholding in rival Wynn Resorts and is seen as better adapted to the current environment where the focus is on the mass market. “[The results affirm Galaxy as] our top pick in the Macau gaming sector alongside Sands China,” JPMorgan’s DS Kim said on Monday, referring to the late Sheldon Adelson’s Las Vegas Sands’ Macau business, which has also been focusing on ordinary players instead of high rollers. The strength of the rebound has been surprising for analysts, considering a crackdown on gambling that included the arrest of big promoters who had been shipping in high-spending “VIP” players. That has led to the shift in focus to attracting mass-market players, but even the VIP segment has been showing signs of recovery. Ben Lee, a casino analyst at IGamiX, said: “We all expected the VIP segment would be quite depressed [compared] to what it had been in the past, but the stronger than expected rebound . . . has surprised us all.” Galaxy’s earnings before interest, tax, depreciation and amortisation was higher than a consensus estimate of HK$1.7bn. Net revenue reached HK$7bn, compared with HK$13bn in the same quarter in 2019 before the pandemic. “Galaxy reported ebitda of HK$1.91bn ($240mn), implying a 48 per cent recovery versus pre-Covid-19 levels. This is in line with its peers’ 46 per cent recovery on average in quarter one. The upside came from . . . solid mass performance,” said Kim. Sands China, the Macau unit that has five main properties in the Chinese city, had previously reported net revenue of US$1.27bn for the first quarter, compared with US$2.33bn in the same quarter of 2019 before the pandemic. Since selling out of Las Vegas in 2021, Las Vegas Sands now depends almost entirely on its Macau and Singaporean casinos for its earnings. However, its recovery has been held back by a severe labour shortage, with just two-thirds of Sands’ hotel rooms available in the first three months, a situation management has said has since improved. The Chinese city’s government had implemented a series of policies that drove away foreign hires, many of whom work in the hospitality sector. At one point, authorities banned overseas workers from re-entering Macau after leaving, as part of Covid prevention measures.
