Toppling the King

In a historic moment for the US casino hub, Las Vegas surpassed Macau in annual gaming revenue in 2022. It’s the first time that Macau has lost out to its American counterpart in 18 years, with Las Vegas last beating Macau by around $200m in 2005.

Nevada enjoyed its 22nd straight month of $1bn+ revenue

Both regions recently announced their full-year revenue results for 2022 and they paint a very different picture of pandemic recovery. Nevada enjoyed its 22nd straight month of $1bn+ revenue in December, bringing the state total to an annual record of $14.8bn. Las Vegas, the state’s leading performer, earned $8.28bn of that total, up 17% from 2021.

Meanwhile, in the Special Administrative Region (SAR) of Macau, things aren’t looking quite so rosy. It recorded GGR of MOP$42.2bn (US$5.3bn) in 2022, down around 51% from 2021 and the lowest single-year total since 2004. The result knocked Macau off the gambling hub top spot, with its total around 40% lower than Las Vegas.

Pandemic struggles

Las Vegas has regained its title with a little help from pandemic-related restrictions that continue to plague Macau’s casino operators. We can see the dramatic rise and fall of the Asian gambling hub by following its GGR from 2005 until 2022:

Comparison of full-year GGR revenue for Macau and Las Vegas 2005-2022

Casinos in Las Vegas closed in March 2020 following the onset of the pandemic and remained closed until June 2020, when they were able to reopen at reduced capacities. By mid-2021, most of the casinos were more or less back to full capacity. Visitor numbers and casino revenues rose sharply after the reopening, in contrast to what happened in Macau.

In February 2020, casinos in Macau closed for 15 days. They then remained open during the rest of the pandemic, aside from a short period in July 2022 when COVID-19 cases were on the rise.

Despite the limited closures, revenues fell to rock-bottom lows as severe travel restrictions cut off the region from its key customers. Between the start of the pandemic and January 2023, the travel limitations meant that it was not viable for people to visit Macau for mainland China, Hong Kong, or overseas. This led to very poor revenue figures for casinos, with numerous operators having to borrow money to boost liquidity due to mounting losses.

What does the future hold?

While Las Vegas beat Macau’s full-year GGR for the first time in 18 years, many people will wonder if this is just an outlier or if it will be the new norm. Analysts believe that it was just a one-off, as Macau is primed to rebound strongly following the easing of travel restrictions last month.

The Macau government has estimated that GGR in 2023 will be MOP$130bn (US$16.17bn). In January, GGR for the region was MOP$11.6bn (US$1.43bn), so if this level of monthly GGR continues, then the full-year results will surpass estimates, putting Macau ahead of Nevada’s 2022 GGR.

appears unlikely that it will surpass Macau again

While analysts are bullish that Las Vegas will have a strong 2023, it appears unlikely that it will surpass Macau again. Sin City will benefit from continuing increases in convention visitors, but concerns also exist about a potential economic slowdown. As such, many experts believe that significant double-digit growth percentages won’t be as forthcoming this year in Las Vegas.