Macao Gross Gaming Revenue Jumps in January, Aided by Reduced Restrictions and Chinese New Year

January 2023 Macao industry gross gaming revenue, or GGR, surged to over 40% of 2019’s level (up 83% year over year) versus the midteens level seen during 2021, helped by the removal of travel restrictions on Jan. 8 ahead of the Chinese New Year holiday. The results represent the strongest month of gaming demand since January 2020 (before travel restrictions were fully implemented). This buoys our long-held view that there is a global human-ingrained desire to travel and supports our decision last month to lower the Uncertainty Rating to High from Very High for Macau exposed companies Wynn and Las Vegas Sands. That said, there are factors that could make the recovery volatile over the coming months. First, this year’s January included the New Year holiday, which was in February during 2019, making for a tougher comparison with prepandemic marks for this current month. Also, various reports indicate that the reopening of Macao to Hong Kong in January resulted in the majority of visitation during the New Year holiday coming from that region were versus the high-teens percentage the region averaged in 2019, and it remains to be seen how much of this pent-up demand can endure. Finally, there could be additional COVID-19 variants during the coming months that might impact demand. We plan to monitor gaming trends closely and maintain our forecast for 2023 industry GGR to reach around 50% of 2019’s level, or more than a 200% year-over-year increase, followed by a near full recovery in 2024.