Las Vegas and Macau are set to do battle in 2023 over which gambling center is the biggest on the planet. [Image: Shutterstock.com]
overthrow the king
In a historic moment for the American casino hub, Las Vegas has overtaken Macau in annual gaming revenue in 2022. It is the first time that Macau has lost to its American counterpart in 18 years, with Las Vegas beating Macau by nearly $200 million in 2005.
Nevada enjoyed its 22nd consecutive month of $1 billion in revenue
Both regions recently reported full-year revenue results for 2022 and paint a very different picture of the pandemic recovery. Nevada enjoyed its 22nd consecutive month of $1 billion+ in revenue in December, bringing the state’s total to an annual record of $14.8 billion. Las Vegas, the state leader, made $8.28 billion of that total, up 17% from 2021.
Meanwhile, in the Macao Special Administrative Region (SAR), things are not looking so rosy. GGR recorded $42.2 billion MOP (US$5.3 billion) in 2022, down about 51% from 2021 and the lowest one-year total since 2004. The result knocked Macau out of the top spot in the gambling hub, with its total down nearly 40%. about Las Vegas.
Las Vegas regained its title with a little help from the pandemic-related restrictions that continue to plague casino operators in Macau. We can see the dramatic rise and fall of the Asian gambling hub by following GGR from 2005 through 2022:
Casinos in Las Vegas closed in March 2020 after the onset of the pandemic and remained closed until June 2020, when they were able to reopen at reduced capacities. By the middle of 2021, most casinos are more or less back at full capacity. Visitor numbers and casino revenue rose sharply after the reopening, unlike in Macau.
In February 2020, casinos in Macau were closed for 15 days. They then remained open through the remainder of the pandemic, apart from a short period in July 2022 when cases of COVID-19 were on the rise.
Despite limited lockdowns, revenues have bottomed out as severe travel restrictions cut off the region from its key customers. Between the beginning of the epidemic and January 2023, travel restrictions meant that it was not possible for people to visit Macau to mainland China, Hong Kong, or abroad. This led to extremely low revenue numbers for the casinos, as many operators had to borrow money to boost liquidity due to mounting losses.
What does the future hold?
While Las Vegas beat GGR to a full year in Macau for the first time in 18 years, many people will be wondering if this is just an exception or if it will be the new norm. Analysts believe it was a one-off, as Macau is poised to bounce back strongly after easing travel restrictions last month.
The Macao government has estimated that its GDP in 2023 will be 130 billion US dollars (16.17 billion US dollars). In January, the region’s GDP was $11.6 billion (US$1.43 billion), so if this level of monthly GGR holds, full-year results will beat estimates, putting Macau ahead of Nevada’s 2022 GGR.
It seems unlikely that he will overtake Macau again
While analysts are optimistic that Las Vegas will be strong in 2023, it seems unlikely that it will ever overtake Macau again. Sin City will benefit from continued increases in conference visitors, but there are also concerns about a potential economic slowdown. As such, many experts believe that large double-digit growth percentages are not imminent this year in Las Vegas.