Gross gaming revenue rose 16.4% from a year earlier to 17.7 billion patacas ($2.2 billion) for the month, according to the Gaming Inspection and Coordination Bureau on Monday. That’s lower than the median analyst estimate of a 17.5% year-on-year increase. That’s also 12.4% weaker than in the previous month and still 25.7% lower than 2019, or pre-Covid, levels.

Key Insights

June is typically a slow season, with visitor numbers falling off from May’s so-called Golden Week holiday. Gaming revenue for the month in 2019 was 8% lower than the previous month.

A decline in spending by Chinese visitors, wary of splashing out on big-ticket items due to economic uncertainty, also contributed to the slowdown. Chinese tourists are Macau’s biggest visitor group.

Macau reported 2.7 million visitor arrivals in May, down around 20% from pre-pandemic levels. The city will release data for June later this month.

Macau casinos have been rolling out freebies including snacks, hotel rooms and transport tickets to attract more tourists, as the lucrative high-roller market collapsed following a crackdown by Beijing. Macau authorities recently advised operators to scale down promotions using free food and drinks after some small local businesses complained.

Most casinos have recently limited free snacks to players, possibly weighing on footfall to casinos. But this will likely have a limited impact on gaming revenue because some people who were lured to casinos for the free food and drinks were never big gamblers to begin with, Morgan Stanley analysts Praveen Choudhary and Gareth Leung said in a recent note.

The gambling hub still faces regulatory risks. China’s Ministry of Public Security in June vowed to crack down on illegal money exchanges and loan sharks in Macau to stem capital flight. While there’s no data showing the number of gamblers using these illicit services, individual money exchangers are a common sight within and outside of each casino in the city, signaling consistent demand.

Market Performance

The Bloomberg Intelligence index of Macau casino operators tumbled 9.3% in June, while the benchmark Hang Seng Index fell 2%.