Macau Gaming Revenue Continues Streak, Gaining 58% Year-Over-Year In March

Casino companies operating in Macau edged higher on Thursday after it was reported that gaming revenue in the region jumped nearly 58% year-over-year last month. Publicly traded companies in the Macau gaming space include Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN), and Melco Resorts (MLCO).

GAMING DATA:  Macau's Gaming Inspection and Coordination Bureau said gross revenue from games of fortune in the region increased 58% to 8.31B patacas in March compared to the same month of last year, the highest monthly total of 2021. This compares to a 135.6% year-over-year increase in February to 7.31B patacas and a 63.7% year-over-year decrease in January to 8.02B patacas. The aggregate gross gaming revenue, or GGR, in the three months to March 31 was up about 8% from the fourth quarter of 2020.

WHAT'S NOTABLE: February's results included the Chinese New Year, which was weaker-than-expected amid stay-in-place orders in parts of mainland China. Visitation to Macau declined 65.3% during the Chinese New Year. In the year-ago period, all Macau casinos had at least a 15-day pause as a COVID-19 countermeasure.

Travel to Macau remains difficult amid a new variant strain of COVID-19 that recently emerged in the UK and has now been detected in Japan. The new strain has also showed up in parts of mainland China and authorities were warning against unnecessary travel in the lead-up to the Chinese New Year. On February 23, Macau authorities announced that no city in mainland China was any longer considered by the Macau authorities to be "medium risk" for transmission of COVID-19 infection.

The region last week reported its highest single day and weekly visitor arrival totals since the beginning of the COVID-19 pandemic. According to figures from the Macao Government Tourism Office, approximately 190,000 visitors arrived between March 20-26, with 32,016 arriving on March 20 and 32,647 arriving on March 26.

ANALYST COMMENTARY: JP Morgan analyst DS Kim said that March's daily run-rate was "in fact, the best monthly print since COVID-19 and showed a consistent sequential recovery." The analyst added that "This reflects improving travel sentiment and pent-up demand... as well as modest relaxation of local restrictions in Macau."

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