Macau’s Premium Mass Gambling Segment Seen as Essential for GGR Recovery

Macau has been heavily hit by the coronavirus pandemic, and it has been suggested that the easiest way for it to recover lost revenue will be through the premium mass gambling segment. Bernstein Research claim that the premium mass gamblers are better able to boost casino activity, which is urgently needed after the government reported a drop in Macau’s GDP of roughly 64% for the third quarter.

It was the mass market that performed best in the third quarter, and it also saw an increase of 77% sequentially from the previous quarter, far more than the 51% reported for the VIP market. This is because the mass market attracts larger numbers of players, and this translates into faster profits.

The report from Bernstein Research said that some casinos, such as Wynn Resorts and Melco Resorts and Entertainment are better set up for high rollers. However, Ian Coughlan, the President of Wynn Resorts (Macau) recently told investors that they are ready to push forward and that he is encouraged by “premium mass activity” in both the Wynn Macau and Wynn Palace.

There are also signs that once the pandemic is brought under control, VIP gambling may remain in decline. China has always been a great source of VIP gamblers to Macau, but the country’s crackdown on gambling may mean that Macau’s casino operators have to switch their focus to the mass segment and to non-gambling attractions.

Macau had already begun working on diversifying its attractions before the pandemic hit. These efforts are likely to receive greater focus in the future, and it is possible that they will be combined with casino operator’s contracts in order to receive new gaming concessions. Ultimately, the aim will be to help Macau improve its GDP, which has been steadily falling.

In the second quarter of this year, Macau’s GDP was 68% lower than a year earlier. While it did improve in the third quarter, it was will down 63.8% year-on-year. Overall, across the first three quarters of 2020, the GDP was down 59.8% year-on-year.