Las Vegas is Recovering but The Gambling Capital of the World Lags Behind

Whenever Las Vegas and Macau are brought into a conversation, it’s hard not to think about the casino industry. These two are situated on the top spot of the list of the world’s hottest gambling places. Both cities boast of a great night and casino life that many people are willing to spend a lot on. These places have always been filled with tourists and this is why the effects of the COVID-19 pandemic were quite a shock.

At some point in 2020, both cities appeared to have been deserted. Las Vegas looked like a ghost town because the locals including businesses had to comply with strict lockdowns and protocols. Many people who would frequent casinos had to go home or quarantine themselves. They had to find alternatives to enjoy their favorite games and resort to playing at an online US casino for real money gaming.

Fortunately, the lockdowns didn’t last for a long time and both cities started to allow businesses to get back to their operations again even if it was in limited capacities. Fast-forward to today now that things are getting better and people are starting to have the confidence to travel once again. The streets of Las Vegas are starting to be lively again and gaming revenues are starting to go up. However, recent data shows that Macau which is labeled as the gambling capital of the world is lagging.

Macau Struggles

Before the pandemic, Macau has would have a bigger annual Gross Gaming Revenue (GGR) compared to Las Vegas. However, since the pandemic, Macau appears to be struggling. Bank of America Analyst, Shaun Kelley, recently revealed that Macau’s GGR is still below 70 percent compared to its 2019 GGR. Meanwhile, Las Vegas has already recovered with 30 percent more GGR from the pre-pandemic level.

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Kelley also explained that Macau has faced more troubles aside from the pandemic itself. It also didn’t help that recently, 11 people were arrested in the city for casino offenses including casino junket boss Alvin Chau. Chau and the ten other people are taken in for questioning about their group’s activities. It’s a big deal because these people are high-profile figures in the local gambling industry of Macau.

Chau head Suncity which accounts for 40 percent of the mainland Chinese high-rollers in Macau. That is a huge chunk of the VIPs and with their shares suspended for trading, that would have a toll on the local industry.

Since this arrest in the last week of November, Macau’s casino stocks tumbled. Overall, the city’s GGR has been going up for this year but it’s still below pre-pandemic levels. Kelley talked about the recent events in Macau and said, “This development, in our view, is more of a crackdown/intervention risk than the concession process from back in September, but is yet another example of the 3 C’s (COVID, crackdown and concession) risks that make Macau difficult for investors at the moment.”

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We still can say that tourism is still not lively as it was pre-pandemic in Sin City but it’s getting there. The places that are usually crowded now have foot traffic but you can still tell that it’s not quite the Las Vegas we know just yet. Many people still prefer to just play at an online casino instead of traveling to crowded places to play real money games. Still, things are getting back on track.

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Multibillion-dollar resort sales were made within the city this year. Businesses and developers are also looking forward to pushing through with their plans to build new establishments inside and outside the Strip like the chairman and CEO of Fontainebleau Development, Jeffrey Soffer.

Soffer announced in November that he aims to finally open the 67-story Fontainebleau Las Vegas in the fourth quarter of 2023. This has been a long-awaited project as it has started in the mid-2000s. However, Fontainebleau had to file for bankruptcy when the economy crashed. Since then, the company had to be managed by different people a couple of times until Soffer was able to reacquire it earlier this year.

Aside from Fontainebleau, Station Casinos is also planning to break ground next year for its resort project worth $750 million in the southwest valley. Majestic Resorts CEO also plans to do the same next year for a hotel with 720 rooms near the north Strip. Dream Las Vegas also aims to break ground next year for a 20-story hotel and casino near the south edge of the Strip.