The gaming industry in Macau is experiencing a surprising decline in share prices, despite the reopening of borders in January. According to industry analysts, the share costs of 5 out of 6 Macau concessionaires have decreased by over 20% compared to January 1 of this year. The only concessionaire showing progress is MGM China, which has surpassed 2019 levels due to the addition of 198 new gaming tables.
The decline in share prices has puzzled industry experts, especially considering that the revenues and profits of the casinos have been steadily rising. Alidad Tash, managing director of 2NT8 Ltd, commented that the decline may be related to the fear of a slowdown in China, particularly in non-essential spending such as luxury items, gaming, and leisure.
In addition to the declining share prices, analysts at JP Morgan noted that the combined market capitalization of the 6 concessionaires has dropped to the same levels as in 2022 and is still only half of the levels prior to COVID-19.
On a positive note, it was recently reported that the Macau government collected MOP51.55 billion (US$6.42 billion) in gaming tax revenues from January to October 2023. This indicates that the gaming industry has had a significant financial impact on the government’s operations.
Despite this, the unexpected decline in gaming shares has raised concerns among industry analysts, and the reasons behind the decline remain unclear. However, it is evident that the industry’s recovery has not translated into improvements in share prices for most concessionaires, signaling potential challenges ahead.